||Volume 19, Number 3, Nov./Dec. 2006
Teachers' pension plan
by Carolyn Prellwitz
Important information for teachers considering retirement
If you are considering retiring soon, you will be interested in this important information about retiree dental benefits.
Projections have shown that costs for the non-pension benefits will exceed the funding available by the middle of 2007. As a result, the existing subsidized dental plan for retired Teachers’ Pension Plan members will end on July 31, 2007, and a new, unsubsidized voluntary dental plan will take its place on August 1, 2007. Retirees and beneficiaries receiving a pension will pay full premiums under the new plan for coverage for themselves, their spouses, and their dependants.
This change to the plan reflects the need for the Teachers’ Pension Plan to achieve a balance between the rising costs of non-pension benefits (extended health, dental, and inflation protection) and the limited funds available to pay for these benefits. The new group dental plan will be less costly for the pension plan because it will not be subsidized. At the same time, it will provide coverage at a group rate not available to individuals.
Before July 1, 2007
If you start your pension before July 1, 2007, and want dental coverage, you must apply for both the existing dental plan and the new voluntary dental plan. You must apply for the voluntary dental plan by May 31, 2007 (or as soon as you start receiving your pension, if this is after May 31) otherwise coverage under this plan will not be available to you unless you can provide proof of continuous coverage under another dental plan.
After July 1, 2007
If you start your pension July 1, 2007, and your employer does not provide dental coverage for July, you can have coverage for one month under the subsidized dental plan by submitting a cheque for the July premiums. If you want coverage under the new plan starting in August 2007, you must also submit the completed voluntary dental plan application at the same time as your pension application. If you do not apply for coverage under the voluntary dental plan when you start receiving your pension, coverage will not be available to you unless you can provide proof of continuous coverage under another dental plan.
The voluntary dental plan will offer, at the member’s choice, an "Essential" plan covering basic and restorative services and an "Enhanced" plan covering basic and restorative services and major restorative services. The monthly rates for each for the period August 1, 2007 to January 31, 2008 are as follows:
• Essential Plan: $18.73 single, $35.61 couple, $60.01 family
• Enhanced Plan: $41.51 single, $78.82 couple, $111.35 family.
The Teacher’s Pension Plan Board of Trustees will continue to monitor available funding so the pension plan can offer subsidized extended health coverage for as long as possible. At some point in the not-so-distant future, it is likely that all retirees will have to pay some or all of the EHB premiums.
Your basic pension is guaranteed. Post-retirement group benefits and pension inflation protection are not guaranteed by the pension plan, but are provided only as long as adequate funding is available.
TPP: Don’t miss the deadline
You may be able to increase your future pension benefit by:
- purchasing service for a leave of absence, i.e., maternity leave, parental leave, adoption leave, or general leave that ended before April 1, 2002.
- purchasing service for arrears, for which you received notice before April 1, 2002. (Arrears is a period of time when you were eligible to make contributions but your employer did not begin deducting those contributions.)
- purchasing service when you worked for a TPP employer but did not contribute to the plan prior to joining the plan, i.e., less than half-time or teacher-on-call employment.
- reinstating a refund taken from the BC Teachers’ Pension Plan.
- reinstating a refund taken from one of the family of BC public-sector pension plans, i.e., College Pension Plan, Municipal Pension Plan, and/or Public Service Pension Plan.
By purchasing service, reinstating service and/or transferring service, you increase the number of years that count toward your pension. This could get you closer to an unreduced pension and increase the amount of your benefit at retirement.
If you are an active member of the TPP, you have until March 31, 2007, or termination with your current employer, whichever is earlier, to purchase service or reinstate service that occurred prior to April 1, 2002. March 31, 2007 is also the deadline for reinstating a refund taken from one of the family of BC public-sector pension plans.
For service after April 1, 2002, the deadline is five years from the end of the period of service you are applying to purchase or until your current employment ends, whichever is earlier.
In the case of a reinstatement for service prior to December 31, 1995: If you became an active plan member on or after April 1, 2002, you must apply to reinstate the refund within five years from the time you recommenced contributions to the plan or before you terminate your current employment, whichever comes first.
Visit the TPP web site at tpp.pensionsbc.ca and download the applicable forms required from the Forms section in the left-hand side navigation bar on the home page (Purchase of Service Application Package, Pension Transfer Application, Reinstatement of a Refund Request for Cost).
The TPP web site also has a Purchase Cost Estimator to help determine the cost of purchasing a leave of absence. You can then use your Personalized Pension Estimator to determine how much the purchase will increase your pension.
BCTF staff are available to assist with all of the above. Telephone 1-800-663-1921 or e-mail directly to firstname.lastname@example.org or email@example.com.
Responsible investing and the TPP
The Teachers’ Pension Board of Trustees has been very progressive in expanding its emphasis on using responsible investing criteria in managing the assets of the Teachers’ Pension Plan. The Board’s investment agent, bcIMC, has developed, at the request of the board, a pooled investment portfolio designed to replicate the risk and return characteristics of the Domini 400 Social Index. Approval to participate in this new investment portfolio was given by the board at its October 2006 meeting.
The Domini 400 Social Index is a US index that is loosely modeled on the S&P 500 Index but incorporates responsible investment principles in the construction of the index. This includes negative screens to exclude companies that have significant exposure to tobacco, weapons, alcohol, gambling, and nuclear power, as well as incorporating positive qualitative screens to include companies that exhibit desirable social traits such as strong community relations, workforce diversity, good employee relations, and sustainable environmental practices. The trustees believe that participation in this new pooled investment fund will be consistent with the trustees’ fiduciary duty to manage the plan in the best financial interest of plan members.
The board has also agreed to enhance its Statement of Investment Policies and Procedures to describe better its recognition of responsible investment factors in making investment decisions.
The Teachers’ Pension Board of Trustees, through the bcIMC, continues to vote its proxies and to engage companies by encouraging them to use high standards when considering responsible investing issues. It is the board’s belief that well-governed companies that meet the environmental and social expectations of their stakeholders are better positioned to deliver sustainable investment results that contribute to the long-term financial success of the pension plan. A summary of bcIMC’s activity in this area on behalf of the board is available at www.bcimc.com.
Finally, Responsible Investing Reports from the TPP can now be found on both the web sites of the TPP and the BCTF. The first report was posted June 2006.
Access pension information online
Teachers’ Pension Plan (TPP) web site at tpp.pensionsbc.ca
Click on "My Account" on the right side of the TPP home page. Enter in the username and temporary password provided for you on your 2005 TPP members’ benefit statement. Your password is above your name and social insurance number in section 1 of the statement. If you have misplaced your statement, phone the TPP to have a new one mailed to you. Toll-free 1-800-665-6770, Vancouver 604-660-4088, Victoria 250-953-3022.
Your personal profile, your pension service history, and your personalized pension estimator.
Choosing the right options
Undecided about your Joint Life option? Choosing the right options: Your BC public sector pension and the joint life question, 2006 Edition by Ken Smith is available from the BCTF Lesson Aids Department (see p. 12 for ordering instructions)—$15.
An interactive Excel CD version ($30) is available from Ken Smith, 5120 Ewart Street, Burnaby, BC V5J 2W2.
Carolyn Prellwitz is an assistant director in BCTF’s Income Security Division.