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Relative Cost of Retirement Benefit Options

If I am entitled to $1,000/month under the normal form of Life Guaranteed 5 years, how much does that translate into for all the different options?

The amount under the different options will vary based on your age and your spouse’s age. Here is an example for someone age 65 with a spouse of a similar age:

For Life options:

  • Life Only: $1,005
  • Life Guaranteed 5 Years: $1,000
  • Life Guaranteed 10 Years: $984
  • Life Guaranteed 15 Years: $957

For Joint & Survivor options

  • Joint & 50% Survivor: $932
  • Joint & 50% Survivor Guaranteed 10 Years: $921
  • Joint & 60% Survivor: $919
  • Joint & 60% Survivor Guaranteed 10 Years: $910
  • Joint & 100% Survivor: $869
  • Joint & 100% Survivor Guaranteed 10 Years: $868

The Rule of 60 + 10

Currently there is an option for full pension upon retirement at 60 as long as you have at least 10 years of service at SFU. Will this still be an option?

No, the proposed amended plan does not provide for the “Rule of 60+10” for an unreduced pension.   As we’ve stated, one of the primary guiding principles that the EJPC took into negotiations with the University was that if plan members were going to become co-sponsors, that all plan members had to be treated as equitably as reasonably possible.  The Rule of 60 + 10 is simply a specific case of a Rule of 70.   We could not justify having a Rule of 70 for some plan members and a Rule of 80 for others.

In the Event of Death Before Retirement

What happens if you die before you even retire?  What happens to the pension that the employee has contributed to?

The provisions found in the current pension plan text regarding death benefits would remain unchanged under the amended plan.  That is, pension benefits earned by the plan member up to the time of death before retirement are vested.  This means the benefits earned belong to the plan member.  Upon death, those benefits would be payable to the member’s beneficiary or estate.
For the full details, please see Section 12 of the current plan text which deals with this situation.  This is available by going to:
and clicking on Resources and then scrolling down and clicking on Current Pension Plan.

Votes Required to Pass Referendum

What is the voting breakdown to pass the pension changes.  Majority in each of the labour groups (50% + 1) or something else?

Yes, to pass the referendum, each of the three employee groups (APSA, CUPE 3338 and the Poly Party) need to attain a simple majority vote (50% + 1 of those casting their votes).    So, if 200 people voted in one employee group, it would req 101 “yes” votes to pass.

Benefit Options for Pension Guarantee and Spousal Component

With the change in normal form to a life guaranteed 5 years, are there still other guarantee period options and options for continuing my pension payments to my spouse if I die first?

Yes, in addition to the normal form, you will be able to elect any of the following optional forms:

  • Life Only: pension ending upon your death;
  • Life Guaranteed 10 years: pension ending upon your death, but providing for at least 10 years of payment should you die before 10 years;
  • Life Guaranteed 15 years: pension ending upon your death, but providing for at least 15 years of payment should you die before 15 years;
  • Joint and 50% Survivor: pension where 50% of your payment continues to your spouse upon your death;
  •  Joint and 50% Survivor Guaranteed 10 years: pension where 50% of your payment continues to your spouse upon your death, and providing for at least 10 years of payment should you and your spouse die before 10 years;
  • Joint and 60% Survivor: pension where 60% of your payment continues to your spouse upon your death;
  • Joint and 60% Survivor Guaranteed 10 years: pension where 60% of your payment continues to your spouse upon your death, and providing for at least 10 years of payment should you and your spouse die before 10 years;
  • Joint and 100% Survivor: pension where 100% of your payment continues to your spouse upon your death; and
  • Joint and 100% Survivor Guaranteed 10 years: pension where 100% of your payment continues to your spouse upon your death, and providing for at least 10 years of payment should you and your spouse die before 10 years.

As you can see, you would still have the option to elect a pension that continues to your spouse after your death. However, for any of the optional forms, the amount of your monthly pension would be determined on an actuarial equivalent basis (in essence, cost-neutral). Compared to the normal form of a Life Guaranteed 5 years, this would generally translate into a small increase should you elect the Life Only option and a slight decrease should you elect any of the other options to account for the probability that your pension may be paid for a longer period of time. 

What happens to my contributions if there is an financial meltdown?

If there is a financial meltdown or any major crisis, how would this impact my contributions?

First of all, the University would continue to be 100% responsible for all costs in respect of pre-January 1, 2020 service, including future deficits emerging that are attributable to pre-January 1, 2020 service.

Second, on January 1, 2020 your contribution rate, offset by your wage increase, would be 6.33% of pay, regardless of the financial situation of the plan at that time.  Members take on no risk at all until 2024 (i.e. your contributions would not be affected by the financial position of the plan before that time).  Moreover, Plan members start off as co-sponsors with a clean “balance sheet” (i.e. on January 1, 2020, the assets and liabilities under the joint responsibility are restarted to zero).

Third, going forward, the contributions would be set with a margin, or “buffer” in mind so that the Plan would be able to weather the normal ups and downs of the market. However, a significant economic crisis would most likely lead to an increase in contributions and that increase would be split between the University and the Plan members in the 60/40 proportion (after the transition period) described in the Cost and Risk Sharing section of The Amendments page.  By the same token, with an improvement in the economy the University and the Plan members would most likely see a contribution decrease.

Last Day to Take Commuted Value

What is the last day to work to take the Commuted Value pay out?  I know it’s the end of December 2019 but would accumulated holidays affect that day?

Your date of termination of employment (i.e. after all holidays are accounted for) must be before January 1, 2020 in order to take advantage of the commuted value option if you are older than 55.

Tax on Commuted Value

I know it states a portion of the Commuted Value payout is taxable, is that true even if the total lump sum goes directly to a locked-in RSP retirement annuity of some kind? 

Yes, typically a portion of the commuted value goes into a locked-in RSP and a portion is taxable. Not all of the commuted value can go directly into a locked-in RSP because of some rules of the Income Tax Act. With the taxable portion, you can put it into an RRSP (not locked-in) if you have sufficient RRSP room to accommodate it.