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University of Windsor New Faculty Outline of Benefits 2006

University of Windsor New Faculty Outline of Benefits 2006. July, 2006. Presentation Overview. Types of Pension Plans Faculty Pension Plan Life as an Active Member Joining the Pension Plan Retirement Survivor Options Terminating Membership Past Service Pension Adjustments

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University of Windsor New Faculty Outline of Benefits 2006

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  1. University of Windsor New Faculty Outline of Benefits 2006 July, 2006

  2. Presentation Overview • Types of Pension Plans • Faculty Pension Plan • Life as an Active Member • Joining the Pension Plan • Retirement • Survivor Options • Terminating Membership • Past Service Pension Adjustments • Monthly Pension Indexing • Overview of Health, Dental, Life and additional benefits

  3. Types of Pension Plans • Defined Benefit Plans (DB) • Benefit is defined by a formula • Pension at retirement is always known • Most often the employer assumes the investment risks / rewards • Defined Contribution Plans (DC) • Contributions are defined by a formula • Pension at retirement is unknown • Most often the employee assumes the investment risks / rewards • Hybrid Plan – a combination of DB and DC • Attempts to provide the best of both worlds

  4. Faculty Pension Plan • Hybrid Pension – Two Components • Money Purchase (MPP) (Defined Contribution) AND • Minimum Guarantee (MGP) (Defined Benefit)

  5. Faculty Pension Plan • Money Purchase (Defined Contribution) • 6% Member Contribution PLUS 6% University Contribution credited to individual member accounts along with fund rate of return • Money Purchase Pension (MPP), payable monthly at retirement • MPP = Total MPC Account at Retirement Actuarial Annuity Factor • Actuarial assumptions include mortality, retirement age, and spousal age.

  6. Faculty Pension Plan • Minimum Guarantee (Defined Benefit) • 1.5% of Best Average Earnings (BAE) up to Final Average YMPE (FYMPE) PLUS • 2 % of BAE above FYMPE Multiplied by • Years (and part years) of Pensionable Service in the plan

  7. Plan Definitions • BAE = 12 X average of Members monthly earnings in the 48 months of highest earnings, (not necessarily consecutive) prior to retirement. • Earnings = Member’s basic nominal salary, excludes overload, allowances, bonuses or stipends etc. • YMPE = Year’s Maximum Pensionable Earnings in effect under the Canada Pension Plan. • (2006 = $42,100) (2005 = $41, 100) (2004 = $40,500) (2003 = $39,900) • FYMPE = Average of YMPE during same period used to determine your BAE.

  8. Life as an Active Member • Contributions – 6% of nominal salary, with matching University contribution, subject to CCRA contribution limits. This includes nominal salary paid in the form of a Research Grant. Special rules for certain types of leaves such as sabbaticals, education leaves. • Once an enrolled active member you may not opt out. • Pensionable earnings, service and contributions captured monthly • Immediate Vesting – ownership of pension benefits • Pension Adjustment – T4 - deemed value of one year plan participation – reduces personal RRSP room • Annual Pension Statement – within 6 months of plan year end • Plan Year runs from July 1st to June 30th of each year

  9. Faculty Pension Plan – Joining the Plan • Full Time, Permanent Faculty Compulsory membership coincident with or next following Employment Date. • Limited Term Appointments Voluntary participation coincident with or next following Employment Date. • Sessional Instructors and Part Time Employees Voluntary participation coincident with or next following the completion of 24 months of Continuous Service provided you have: (1) earned at least 35% of the CPP Year’s Maximum Pensionable Earnings or (2) worked at least 700 hours in each of the two (2) immediately preceding calendar years.

  10. Faculty Pension Plan – Retirement • Normal Retirement Date - July 1st following the last day of the contract year in which the member attains age 65 - minimum age 65 to receive an unreduced pension • Early Retirement Date - anytime after age 55 - MPP pension is account balance annuity - MGP subject to actuarial reduction - upon mutual consent

  11. Example of Annual Pension Payable • Date of retirement = September 1, 2006 • Pensionable Service = 35 years • Best average earnings = $90,000 • Final average YMPE = $40,900 • MPC Account Balance = $500,000 • Actuarial annuity factor = 10.2203 • MPP = $500,000/10.2203 = $48,922.24 per year • MGP = [35] x [0.015 x $40,900 + 0.02 x ($90,000 - $40,900)] = $55,842.50 per year • Basic Benefit payable at retirement = $55,842.50 per year

  12. Faculty Pension Plan – Survivor Options • Death while active – Greater of MPP account or MGP value • Lump sum or Spousal Monthly Pension • Death after Retirement – based on option chosen at retirement • If single at retirement or with spousal waiver • Life Only, Life 5, 10 or 15 • If legal spouse at retirement or no spousal waiver on file • Joint and Survivor 60, 66 2/3(Guar 5), 75 or 100% • Basic pension reduced 10% to 20% to provide spousal benefit • Spouse and member can waive 60% option • In ALL cases, options are permanent on 1st date of retirement

  13. Faculty Pension Plan – Terminating before Retirement • Termination Benefit is the Greater of: • Money Purchase Component Account balance to-date • Commuted value of Minimum Guaranteed Pension earned to-date • Transfer Options: • Transfer termination benefit to a locked-in vehicle if employed > 24 months • Transfer termination benefit to a non locked-in vehicle if employed < 24 months • Leave benefit in plan for deferred pension at a future retirement date • Transfer to a new employer, if allowed • At Retirement - In Lieu of Pension, Members MAY transfer entitlements from plan • Considered a termination, not a retirement • Forfeit Minimum Guarantee Pension, lifetime pension indexing rights • Higher investment fees, potentially greater investment risk to member • Forfeit rights to Benefits, Tuition Remission, H.K. memberships etc. • Forfeit future Surplus sharing

  14. Past Service Pension Adjustments • What are they? • Adjustments most often created by retroactive pension plan improvements • Example: MGP formula change from 1.45%/2% to 1.5% / 2% • University must calculate value of retroactive improvement and report this to Canada Customs and Revenue Agency (T215) • Further reduces personal RRSP room and sometimes forces RRSP withdrawals

  15. Faculty Pension Plan – Indexing Monthly Pension • Both the MPP and MGP adjusted every July 1 • MPP adjusted by the fund rate of return in excess of 6% and an additional adjustment for mortality experience – can increase or decrease • MGP increase based on the increase in the Consumer Price Index • After the MPP and MGP have been adjusted (plus or minus), we compare the two, the larger amount becomes the new pension payable starting at July 1st • Indexing rights passes to those with a Survivor pension

  16. Faculty Plan – Health Insurance Overview • Benefits are effective with your date of employment. • Green Shield Canada provides single or family coverage. • Coverage includes: • Drugs • Semi-private and Private hospitalization • Extended health services, including • Registered Massage therapy - $600 per calendar year • Physiotherapist – no maximum • Chiropractic - $450 per calendar year • Speech therapy - $800 per calendar year • Psychologist – 15 visits per calendar year paid at 50% of the fee schedule • Out of Province/Country coverage – referral / emergency 180 days per visit • Vision - $350 every 24 months • Eye exams - $75 every 24 months • Audio – hearing test $75 every 5 years, hearing aid $1,500 every 5 years • Annual $10/$20 deductible • Health benefit premiums are paid by the University

  17. Faculty Plan – Dental Insurance Overview • Benefits are effective with your date of employment. • Green Shield provides single or family coverage. • Coverage includes: • 80% coverage for Basic & Comprehensive Services • 80% coverage for Major Restorative Services • 50% for Orthodontic Services - $3,000 individual lifetime maximum • Basic services cover recalls every 9 months • Paid at the current year O.D.A. rates • Dental services may be subject to limitations • Dental benefit premiums are paid by the University

  18. Faculty Plan – Group Insurance Overview • Benefits are effective with your date of employment. • Short Term Disability program (Employer Insured) • Provides 105 days fully paid salary • Long Term Disability insured by Great West Life • Provides pro-rated benefit to a maximum of $10,000 monthly indexed • LTD premium is Employee paid – LTD benefit is Non Taxable • Basic Life Insurance (Sun Life) A.D.&D. (Chubb) • Insurance benefit of three (3) times annual salary, rounded to the next highest $1,000 – to a maximum of $350,000 • University paid Premiums • Optional Life, Dependant Life and A.D.&D. available • Employee paid Premiums

  19. Faculty Plan – Additional Faculty Benefits • Benefits are effective with your date of employment. • Employee Assistance Program (EAP) • Full Time Faculty , their dependants (to age 21) and spouse eligible for EAP. • Provided by Warren Scheppell, a leader in EAP programs • Provides confidential assistance and counseling with issues such as marital or family relations, elder / child care, stress management, substance abuse, some legal assistance etc. • Tuition Remission (taxable benefit) • Full Time Faculty , their dependants and spouse eligible for free tuition. • Sessional Instructors entitled to one tuition credit course per year in a year the Instructor teaches one (1) or more courses. • Some limitations apply to this benefit. Contact Human Resources. • St. Denis Centre – Fitness Facility (non taxable benefit) • Full Time Faculty, their dependants and spouse entitled to free basic membership. • Sessional Instructors are provided with membership during the semesters in which they are teaching. • Some limitations apply to this benefit. Does not include access to the Forge. Contact the St. Denis Centre for more information.

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