YUFA
Retirement
Pensions and Mortality Table Changes
5 Feb 08 - There will be new mortality tables used in the calculation of pensions. Over a period of two years, this will result in a decrease in money purchase pensions (3.5% in 2009 and 3.0% in 2010). For those on minimum guarantee, whose pensions do not depend on mortality tables, there will be no change. For people already drawing pensions there will be not change. However, for many members nearing retirement, the dollar figure will definitely be noticeable.
It is important that members know why this has happened. Over the last two decades, experience in our plan (and other similar university plans) show that people are living longer, and pensions are being paid for a longer period. By federal law, pensions which are calculated based on assets in a money purchase account must be based on these amounts and assumptions on mortality, interest rates, etc. At this time, money purchase pensions are still based on an assumption of long term rates of 6%, as they have been for decades.
Members can consult their most recent pension statements to determine whether their pension is based on money purchase calculations or on the minimum guarantee formula. Members receive whichever of these amounts is larger at time of retirement.
We encourage you, if you have any questions about your pension, to contact your Pensions and Benefits Counselor. For further general information about the plan click here.
If you are planning to retire within a few years, you are encouraged to contact the pensions and benefits office to receive a more precise written estimate, to investigate available options, and to receive additional information.
Please note Article 14.07 of the YUFA Collective Agreement: The Employer agrees to provide funds sufficient to ensure that employees eligible to retire will have made available to them, through the Retirement Planning Centre, individual financial counseling, to a maximum cumulative expense of $850 per employee.
Walter Whiteley and Arthur Hilliker