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Queen's University Pension Plan Information Session - March 20, 2019

Learn about the details of the University Pension Plan (UPP) at Queen's University, including contribution rates, offset policies, and the consent process. Discover the benefits of the Jointly Sponsored Pension Plan (JSPP) and the impact on retirement benefits. Understand the governance structure of UPP and the transparency of decision-making. Find out about the contribution rates and offsets for UPP and the agreements for different employee groups. Get informed about the consent process and timing for UPP implementation.

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Queen's University Pension Plan Information Session - March 20, 2019

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  1. Queen’s University Information SessionUniversity Pension Plan (UPP) March 20, 2019

  2. Agenda • Introduction • University Pension Plan Details • Contribution Rates and Offsets • Consent Process and Timing March 20, 2019

  3. University Pension Plan (UPP) Details March 20, 2019

  4. Jointly Sponsored Pension Plan (JSPP) • Pension plan with defined benefits; jointly sponsored, governed, and funded by employers and plan members • Member’s retirement benefit based on pre-set formula; reference to years of pensionable service and earnings • Large Ontario JSPPs • Ontario Teachers’ Pension Plan • OPSEU Pension Plan (public service) • HOOPP (healthcare) • OMERS (municipal) • Long history, reputation and ability to provide secure pensions March 20, 2019

  5. Current Plan and UPP Joint Sponsorship and Governance March 20, 2019

  6. Pension Benefits March 20, 2019

  7. Pension Benefits March 20, 2019

  8. Pension Benefits March 20, 2019

  9. Example - Current Early Retirement Reduction March 20, 2019

  10. Example - Elimination of Early Retirement Reduction March 20, 2019

  11. Pension Benefits March 20, 2019

  12. Pension Benefits March 20, 2019

  13. Examples March 20, 2019

  14. Impact on Benefits 1 Assumes retirement at age 65 with spouse 2 years younger. March 20, 2019

  15. Impact on Benefits Service earned under UPP: greater of Money Purchase Benefit and Minimum Guarantee Benefit replaced by defined benefit provisions • Higher benefit formula • Approx. 12% increase in benefit not affected by Income Tax Act maximum pension • Subsidized survivor pension • Approx. 5% increase in retiree’s pension with 60% survivor benefit coverage • Unreduced early retirement • Unreduced pension at age 60 with 80 or more points vs. 15% reduction • Better indexation • Contribution rates targeted to fund 75% of CPI indexation; pension fund not required to earn over 6% to provide indexation March 20, 2019

  16. Governance and Transparency March 20, 2019

  17. Plan Governance UPP will be a “two” Sponsor model – employers as one Sponsor; employees as other Sponsor. March 20, 2019

  18. Plan Governance UPP Joint Sponsors • Set benefits, contributions and funding policies for UPP • Equal representation of participating universities on one hand, and faculty associations and unions representing UPP members on the other hand • Will appoint Administrator (Board of Trustees) • Representatives of non-unionized employees will have access to information from Sponsors and will meet with them annually March 20, 2019

  19. Plan Governance (cont’d) UPP Board of Trustees • Legal Administrator of UPP responsible for administrative decisions (preparation of actuarial valuations, compliance, investment of UPP assets, pension benefits payments) • 6 Board members appointed by universities; 6 Board members appointed by faculty associations and unions; and 1 Board member appointed by non-unionized employees (without a tie breaking vote) • Independent Chair of Board of Trustees to be appointed jointly by Sponsors (first seven years) • 14 Board members (first seven years) • Board of Trustees anticipated to be in place by January 1, 2020, together with Sponsors, to ensure UPP implementation, effective July 1, 2021 March 20, 2019

  20. Contribution Rates and Offsets March 20, 2019

  21. UPP Contribution Rates • Effective on UPP implementation – expected to be July 1, 2021 • Contribution will be shared equally between employees and university • Contribution rates • Below YMPE – increase from 7.0% to 9.2% of salary • Above the YMPE – increase from 9.0% to 11.5% of salary* *Up to UPP pensionable salary cap March 20, 2019

  22. USW Agreement • 1.5% increase to the salary grid • New salary grid with fewer steps • 1.8% of base salary as one-time lump sum payment for those at maximum step of their grade • Unreduced early retirement factor applicable to minimum guarantee of QPP • Applicable at age 60 with 80 age plus continuous service points • Effective on UPP implementation (expected July 1, 2021) • Conditional on UPP being implemented March 20, 2019

  23. Non-Union Confidential, R, G & C Grades 2-9 • 1.5% increase to the salary grid • New salary grid with fewer steps • 1.8% of base salary as one-time lump sum payment for those at maximum step of their grade • Unreduced early retirement factor applicable to minimum guarantee of the QPP • Applicable at age 60 with 80 age plus continuous service points • Effective on the UPP implementation (expected July 1, 2021) • Conditional on UPP being implemented March 20, 2019

  24. QMPG and Senior Leadership Group • 1.5% base salary adjustment • Up to UPP pensionable salary max • For pension plan members only • Unreduced early retirement factor applicable to minimum guarantee of QPP • Applicable at age 60 with 80 age plus continuous service points • Effective on UPP implementation (expected July 1, 2021) • Conditional on UPP being implemented March 20, 2019

  25. Consent Process and Timing March 20, 2019

  26. All Members Will Have a Say in the Process A consent/objection process • At least 2/3 (two-thirds) of all active members of current Plan must give their consent • No more than 1/3 (one-third) of retired members, former members and other persons entitled to benefits under current Plan (inactive members), as a group, object • Conversion also requires prior approval of Superintendent of Financial Services (the “Superintendent”) March 20, 2019

  27. Unionized Members of the Plan • Your union must determine whether to consent on your behalf • QUFA and USW will consent on behalf of their members • Ratification vote: 96.2% of QUFA and 96.4% of USW voted in favour respectively • Discussions are ongoing with CUPE and PSAC • Discussions will be held with other unions March 20, 2019

  28. What are Other Universities Doing? • UofT Faculty Association (UTFA), UofT USW and most of their CUPE members are consenting to the transition to UPP • Ratification vote: 93.8% of UTFA and 89.3% of U of T USW voted in favour respectively • UofT has reached its 2/3 threshold • Guelph Faculty Association (UGFA), Guelph USW and some of their other unions are consenting • Ratification vote: 98.6% of UGFA and 95.3% of Guelph USW voted in favour respectively March 20, 2019

  29. Non-Unionized Members of the Plan • If you are non-unionized, you will have an individual right to consent to the conversion • Your consent will be added to all of the deemed consents by unionized members to determine the total • You must send in your consent ballot if you support the UPP conversion • If you do not return your ballot, this counts as a vote against the UPP March 20, 2019

  30. Timing • Notices will be mailed out on March 25, 2019 • Consent ballots should be returned no later than June 28, 2019 • Application process to register the UPP begins July 1, 2019 • New JSPP registered January 1, 2020 • Contributions under UPP would only start after regulatory approval for transfer of existing Plan assets to JSPP, anticipated to be July 1, 2021 March 20, 2019

  31. Timeline March 20, 2019

  32. More Information • Information about the proposed pension plan is available on the UPP website at www.universitypension.ca. Sign up to receive updates and submit questions • Contact Bob Weisnagel, Director of Pension Services at bob.weisnagel@queensu.ca March 20, 2019

  33. Questions? March 20, 2019

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