Employer Updates are monthly webinars for CAAT Pension Plan administrators. If you’re a Human Resources or Payroll representative with pension administration duties, you won’t want to miss these important sessions.
Employer Update webinar - April 23, 2019
Q&As for this session
Q. When can contribution rates be reduced?
A. Decisions about contribution rates, benefits, and building reserves are made by the Plan governors, guided by the Funding Policy. Under the Funding Policy, Plan governors can apply any combination of building additional reserves, prefunding conditional inflation protection, and reducing contributions. For the past two years, Plan governors determined that allocating additional reserves to further strengthen benefit security and contribution stability is the most prudent option at this time. Reserves are available as a cushion against unexpected investment market declines or liability growth.
By the time the Plan reaches Funding Level 5, stability contribution rates (under DBprime) will have been reduced by at least 1%. Our website provides a useful graphic that illustrates the Plan’s position in the Funding Policy. Visit the Valuation 2019 page.
Q. What happens in Funding Level 5?
A. The Funding page on our website explains the options available at each level of the Funding Policy.
Our annual report contains a chart that provides a simplified visual of the options at each of the levels. You can find it on page 47 of the report, which is available to view or print on the Annual Report page.
Q. Right now the Plan is 120% funded; at what funding percentage will we reach Level 5?
There is not a precise, preset funded status at which the Plan will reach Level 5 in the Funding Policy. Rather the threshold funded status between each level in the Funding Policy is determined every year, relative to the annual actuarial valuation approved by the Plan governors. The graphic on the valuation page shows the funded position of the Plan in the context of the Funding Policy levels.
The annual report shows the funded position in the context of the Funding Policy over time. Download the PDF and go to page 17 of the report.
I highly encourage you to register for the May 2 webinar, and encourage your Plan members in DBprime and DBplus to register as well. Derek Dobson, the Plan’s CEO will talk about the Plan’s performance and funded status. If the webinar date has passed, the session will be available on demand on our website in a couple of weeks.
Q. Will you consider having two pension run dates in June?
A. Yes, we typical schedule two pension run dates in the summer to accommodate the increased June retirement starts. We’ll communicate the additional date in the next Employer News.
Q. Can employers receive copies of option documents so we can follow up with members?
A. We’ve been sending member documents using a “direct to member” approach for several years. If you need to review documents for specific members, contact your Employer PA.
Employer Update webinar - December 4, 2018
Download the slides (PDF)
Employer Update webinar - DBplus member communication overview - September 27, 2018
Download the slides (PDF)
Watch the recorded session
Employer Update webinar - Preview of roll out of DBplus to members - June 20, 2018
Q&As from this session
How will the new DB Plus affect service purchases for OTRFT?
Service purchases and transfers will still be possible under DBplus and those provisions have been written into the plan text. The DBplus implementation team is currently working on the administration process and the calculation methodology. We’ll provide more information in the next few months.
When an OTRFT employee is on pregnancy/parental leave, will contributions still be based on deemed earnings as they will not have any taxable earnings?
It will be similar to the current process when someone goes on pregnancy/parental/adoption leave, they are able to contribute on deemed earnings. We’ll provide you with some examples on upcoming webinars.
Can you explain why OTRFT members are getting AIW enhancements that Full-Time members aren't getting? There may be some concern about equity.
A preliminary explanation is, in the current plan design, all members are accruing a benefit based on Highest Average Pensionable Earnings. Those earnings can increase as people continue in their career, and reflect the earnings throughout their membership period. In DBplus, members will accrue a pension in each year. That amount is preserved, and the AIW enhancements each year similarly reflect the advancement of earnings.
Your member preview referred to something called DBpremier. What is that?
DBpremier refers to the original plan design. DBplus is the plan name for OTRFT members. Note that the name DBpremier has not been finalized.
You mentioned that member communications have been sent out. Were these sent by Canada Post or email?
The communications to members were sent out by email. On Monday, all My Pension NewsLink subscribers received it. On Tuesday it was sent to those employers who are direct to member subscribers, and to “passalong” employers to forward to their members.
Could you confirm that Full-Time members who move to a permanent OTRFT switch to DBplus?
A member whose employment is part-time, or has a defined end date is considered OTRFT. We can talk about specific employment situations at a later date.
I think DBplus will be very attractive to Full-Time members, especially those who intend to retire at or after age 65. What do we tell Full-Time members?
Full-Time members accrue a valuable pension based on best 60 months of highest earnings throughout their career, multiplied by their service. It provides a really good benefit, and is suited for people who work full-time. It also provides ancillary benefits like LTD protection, which isn’t available to OTRFT members. DBplus has a benefit that is based on contributions, and is designed to match the types of employment patterns we see for members who work part-time.
Can information that is sent directly to members also be sent to all colleges for reference for when the employees contact us?
Yes. The information sent to members is also posted on our website on the News page for members.
What do we tell part-time employees who are thinking of joining? Should they join now or wait for the launch of DBplus next year?
There is always value in saving for retirement early. Part-time employees can choose to join now and start accruing a pension under the current plan design, then, next January, when they are switched to DBplus, so will the pension they’ve already accrued. Going forward, the pension they accrue this year will receive AIW enhancements.
Just as an aside, we will be asking you to suspend enrolments during the month of December, due to unique way OTRFT employees are paid in arrears. We’ll have more information for you about that in coming sessions.
Will you outline the options of lump-sum vs lifetime pension options, or mention that it is still an option that will stay the same?
There’s no change to the benefit options a member will have at termination/retirement. The same rules that apply now will be there under DBplus. What changes is the pension formula that determines how the pension is earned.
On what date can we expect to receive the finalized plan design and details for implementation?
We’re going to be having various Employer Education sessions over the summer to explain various parts of the plan, and we’ll be adding information to the website. We have a staggered roll out of information, and the DBplus communication road map will let you know when we’re putting the information out there. You can also contact your employer PA.
Employer Update webinar - April 24, 2018
Check with your employer PA for webinar slides.