Highest Average Pensionable Earnings

Report the pay the member received during the first year for the days in the relevant months only. If the first pay period includes days from the previous month, the pay will be broken down by days.

For example:

• For a member retiring on June 30, 2011, report the pay in the first year of the final 5 year period from July 1, 2006 until the end of the year. If the first pay of July 2006 is for the pay period of June 25 to July 8, then prorate the pay for that payroll period as follows:

Bi-weekly pay:	$2,800
Days in pay period (depends on payroll frequency):	14
Days in first pay period of first month of final 5 years:	8
Pay to be used in first pay period of July:	$2,800  x (8 / 14) = $1,600

• Report the actual pay received for the rest of the year up to and including the last complete pay period of the year even if that final pay period does not include the final days of December. The pay for the final days of December will be included in the final 5 year period as it will be part of the pay period of the following year.

For Other Than Regular Full-Time members, please report this additional information for the first year of the final 5 year period:

• Actual hours worked that correspond to the earnings reported for those months
• Full-time equivalent hours for the months included in the first year of the final 5 year period.

Report service and contributory earnings for the months of service in the first year of the final 5 year period of the member’s employment.

For the purposes of this change, we are assuming that the HAPE years are the final 5 years of membership. Where they are not, we will analyze the earnings information already on file pertaining to the employee’s entire pension membership to determine what the HAPE will be. We are making this change to ensure better compliance with the Plan Text.

This change has allowed us to replace the 3-page TRD form with 3 separate forms, each specific to an event:

• a Pension Application form,
• a Termination Benefit Application form, and
• a Death Benefit Application form.

Each form will contain a new section in which we will ask you to report the earnings and service details for the first year of the member’s final 5 year period of employment.

For example, on the Pension Application form for a member who retires on June 30, 2011, you will provide us with their total actual earnings for the last 6 months of 2006 (July 1 to December 31, 2006). When we calculate the HAPE, we will add this amount to the member’s current year earnings (January 1 to June 30, 2011 for this example), which you will continue to report on the form as usual. For the 4 full years in between, we will refer to the earnings that you have previously reported to us during the annual data collection process.

The earnings for the 2006 year of the HAPE period are the greater of:

1. the prorated 2006 earnings which include the purchased earnings, and
2. the actual 2006 earnings in respect of the months of the HAPE period only

If the final 60 months are the member’s highest 60 months, the strike purchase will no longer have an impact on the calculation, therefore, there is no further reason for affected members to purchase the 2006 strike period.

We are undertaking a comprehensive review of past pension calculations to see if any remediation is necessary. The results of this review are expected later this year.

For now, we will continue to collect member data on an annual basis. This review of our HAPE calculation is part of our overall review of all our procedures. Our goal is to ensure compliance with the Plan text, consistency across our processes and where possible to also increase efficiency. We expect further changes to practices will arise, and we will do our utmost to minimize the impact these changes will have on plan administration. If you have any questions regarding this or any other issue please be sure to contact us.