Window on Your Pension and Benefits – Fall 2016

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Window on Your Pension and Benefits – Fall 2016 2017-02-09T10:49:23+00:00

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Fall 2016

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Message from the Pension and Benefits Board

The Pension and Benefits Board continues to monitor options to address the issue of solvency funding relief and the long term sustainability of the pension plan. While we wait to see what the best course of action is, the church continues to make special payments in the amount of $67,453 per month. These payments are in addition to the contributions made by active members and congregational employers.

Some financial support may be garnered as a result of a recent General Assembly decision. The 2016 General Assembly adopted a recommendation to adjust the formula of allocating capital from dissolved congregations to the pension fund by allowing 50% of proceeds to go to pension plan solvency, up to a maximum of $2 million.

The Ontario Ministry of Finance is reviewing its solvency funding regulations for single employer defined benefit plans like ours. Most underfunded defined benefit pension plans feel pressure to meet continued regulatory requirements regarding solvency funding, including our own. The Board recognizes that this strain can affect the ability of the Church to fund important parts of its work and mission. Together with other plan sponsors, there is a collective effort to turn this pressure back to the province to propose a solution regarding reforming the current solvency funding framework.

In July of this year the Ontario Government issued a consultative paper entitled “Review of Ontario’s Solvency Funding Framework for Defined Benefits Pension Plans” and invited responses from stakeholders.

Seizing the opportunity to respond directly to the Ontario government regarding this critical issue, a detailed response was issued on behalf of the church. This response outlined the current state of our pension plan in relation to solvency payments, and “urge

[d] the government to complete its Fall 2016 review and implement a more suitable solvency funding framework as quickly as possible.”

Our response was sent in September 2016 and we are awaiting the reply from the Ontario government.

 

Special Committee Re Pension report - iconSolvency Funding Update

The General Assembly Special Committee re Solvency Funding met on several occasions over the past year and is also taking steps to address the issues of solvency deficit. In addition to the response to the Ontario government consultation paper outlined above, an additional document was sent to the Ministry of Finance requesting exemption from solvency funding under the current framework.

 

Understanding your Annual Pension Statement
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One of the most frequent questions we get asked by members is what their pension will be when they retire. We certainly understand the need for this information as it can impact decision making regarding your retirement plans and savings outside your PCC pension plan.

The best way to find this information is to look at your Annual Pension Statement, which provides you with an estimate every year. This document will outline what you have earned to date based on the years you’ve contributed to the pension plan, as well as an estimate of what your pension will be assuming you stay in the plan until you retire.

Defined Benefit vs Defined Contribution
To understand how these calculations are made it is important to understand the type of plan that we offer.

The PCC offers its clergy and employees a ‘defined benefit’ plan. “Defined Benefit” means that the amount that you will receive at retirement is predetermined by using a formula. Funds are managed by your employer and as a member you have little involvement with the funds.

Another common type of pension plan is a “Defined Contribution” plan. With a Defined Contribution plan your pension at retirement is not predetermined and is dependent on your individual retirement portfolio. The employer makes contributions according to a formula, and in some cases members match these contributions. The member then selects how these contributions are invested. This means that similar to an RRSP, the pension at retirement depends on the performance of those investments.

The predictability of plans such as ours makes it easier for you to plan for your retirement and make financial choices that will best compliment your PCC pension.

Pension Formula
Our pension formula uses your salary or stipend, pensionable service and income ratio, all figures that are fixed for a given period of time. Using this formula, a value is calculated and reported on your Annual Pension Statement stating the amount earned towards your pension that calendar year.

DIY Calculations
Your maximum qualifying income (MQI)
For ordained/diaconal: Stipend + 60% (Housing)
For other employees: Salary + 4,308 (Health and Dental)

Your MQI cannot exceed the annual limit on Maximum Qualifying Income approved by the General Assembly (currently $69,900). If the calculation above is greater than the MQI limit, then the limit value should be used.

Your Income Ratio
If your MQI is equal to or greater than the MQI limit approved by General Assembly, then your income ratio = 1
If your MQI is lower than the limit:
(Your MQI) ÷ (MQI Limit) = Your income ratio

Your Pensionable Service
The percentage of time you work in a year
Full Time = 100% = 1
Half Time =50% = 0.5
Part time at 4 days a week = 80% = 0.8

Pension Earned – Let’s do the math!
So, how does the pension formula calculate an earned pension? Using the figures above, you can calculate what your pension earned will be for the year.

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If you have any questions regarding this calculation, your Annual Pension Statement or the content of this newsletter, contact us at pension [at] presbyterian [dot] ca

stop - iconGroup Benefits Plan News

The PCC Baby Boom!
Did you know that our PCC family is experiencing a baby boom? So far in 2016 there have been six children welcomed into members’ homes. In 2015 there were ten bundles of joy brought into our members’ homes. Our Maternity and Parental leave policy provides:
• Top up salary for Maternity leave to 95% for up to 17 weeks (including the two week waiting period for EI benefits)
• Top up salary for Parental leave to 95% for up to 10 weeks.
• Choice to parent regarding pension plan payments (parents can choose to continue to pay into the pension plan or take a break from pensionable service while on leave.)
• Choice to parent regarding group insurance (can continue to pay Group Insurance premiums or take a break from payments and coverage while on leave).
• Full Health and Dental benefits for the whole family while the parent is on leave

Are you planning a maternity or parental leave?
There is certainly a lot to plan for before the new family member arrives. We have put together a helpful checklist as you prepare for your maternity or parental leave.

Before Baby Arrives
• Inform your employer of your intent to take maternity or parental leave by giving 2 weeks notice. Two weeks is the minimum notice allowed – the more notice you can provide the better.
• Apply for EI benefits online – http://www.esdc.gc.ca. Note: the wait time for EI to start has been reduced from two weeks to one week and that your employer will top up your salary to 95% while you wait for EI payments to begin.
• We suggest using your vacation time before you start your leave.
• Decide if you want to continue to pay into your pension plan during leave and complete the appropriate form (found here bit.ly/MatPat1). Return the completed form (with all necessary signatures) to the Pension and Benefits office.
• Decide if you want to continue to pay group insurance premiums during your leave and complete the appropriate form (found here bit.ly/MatPat1). If you opt out while on leave, you will not have group insurance coverage during your leave. Return the completed form (with all necessary signatures) to the Pension and Benefits office.

After Baby Arrives
• Contact the Pension and Benefits office to update your Health and Dental plan information with baby’s name and date of birth so that the whole family is covered. You can also update your Pension beneficiary information at this time if you wish.
• During your leave set a date of return with your employer.

If you have any questions regarding Maternity or Parental leaves, please contact the Pension and Benefits office at pension [at] presbyterian [dot] ca

Member Group Insurance

The rates for Member Group Life Insurance will be increasing slightly for 2017 from 0.55% to 0.6% of qualifying income. This premium will continue to be deducted by employers from monthly stipends and salaries.
Our Group Life Insurance includes member life insurance, dependent life insurance, Accidental Death and Dismemberment, and Long-Term Disability.

Our insurer requires that contributions must be current and up to date. Any benefits paid out from Group Insurance is tax deductible. The details of the Group Insurance can be found in our SunLife Financial Group Benefits Booklet.

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We are conducting a short survey of our active members and want to hear from you.
Let us know what we can do to make this Newsletter a useful resource for you and take a moment to complete our short survey. All answers are anonymous.

Take the survey now by following the URL below
bit.ly/windowsurvey16

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Coverage for Orthotics
Please be advised that orthotic claims are time sensitive. One pair of orthotics can be claimed every 24 months for adults (18 and up) and one pair ever 12 months for children (under 18) from the last date of purchase.

Has your address changed?
Make sure that you tell us (so that we can update your pension file) as well as Sun Life (so that they can update your group benefit file).
Pension and Benefits Board
The Presbyterian Church in Canada
50 Wynford Drive, Toronto ON, M3C 1J7
416-441-1111 or 1-800-619-7301
pension [at] presbyterian [dot] ca

Sun Life
227 King Street South
PO Box 1601 Stn Waterloo
Waterloo, ON N2J 4C5
Customer Care Centre at 1-877-786-5433 (1-877-SUN-LIFE)
mysunlife.ca

Next Board Meeting
The next Pension and Benefits Board Meeting is scheduled for March March 13-14, 2017

Pension and Benefits Board Webpage
Stay informed: visit the Pension and Benefits Board webpage for resources, newsletters, forms, board updates and information:
www.presbyterian.ca/pensionandbenefits

About this newsletter
This newsletter provides summary information about The Presbyterian Church in Canada’s pension and benefits plans. It is not intended to be complete or comprehensive, or to provide legal or medical advice. If there are any discrepancies between this bulletin and the wording in the legal documents that govern the plans, the legal documents will apply in all cases.

For more information, contact Pension and Benefits by email or call 416-441-1111 or 1-800-619-7301 ext. 287.

Looking for more information about your pension and benefit plans?

Visit the Pension and Benefits web page for forms, newsletters, booklets, worksheets and latest news.

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