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April 12, 2012 USW – Local 1998 Toronto, Ont Alex D. McKinnon.

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Presentation on theme: "April 12, 2012 USW – Local 1998 Toronto, Ont Alex D. McKinnon."— Presentation transcript:

1 April 12, 2012 USW – Local 1998 Toronto, Ont Alex D. McKinnon

2 Agenda Outline –Federal Budget 2012 – OAS Changes –Ontario Budget – Proposed Pension Changes in the Broader Public Sector –University of Toronto – Pension Update –Questions

3 Federal Budget - 2012 Old Age Security Payable at age 65 2012 Maximum Benefit is $540.12 a month Based on a residency requirement Require 40 years residency for full credit Financed from general tax revenue Clawed back when income rises above $69,562 (15% of excess)

4 Federal Budget - 2012 OAS – Proposed Changes -Phase in starts April 1, 2023 -Fully Implemented by January 2029 -Eligibility for survivor benefits also increase as does the GIS (Guaranteed Income Supplement) -Affects on those individuals born after March 1958

5 Federal Budget - 2012 OAS – Proposed Changes -Starting with those individuals born April or May 1958, 1 additional month is added to OAS eligibility -Every two (2) months, eligibility is extended by 1 month -Those born February 1962 or after will have to reach age 67 before becoming eligible

6 Federal Budget - 2012 OAS – Proposed Changes -Effective July 2013, an individual can delay commencing OAS for a period of up to 5 years -Depending on the amount of time deferred, the pension will be actuarially increased -From 2013 to 2016 improving the proactive enrollment services

7 Federal Budget - 2012 OAS – Proposed Changes -Conservatives will adjust other programs such Veterans Affairs and Aboriginal Affairs to align with the new OAS rules

8 Ontario Budget 2012 The recent Ontario budget sets out significant changes to the bargaining, design and investment management of public and broader public sector pension plans Government focus is to control expenditure at the expense of plan members Budget makes a number of changes to public- sector pension plans Budget also addresses some provisions of Bill 236

9 Ontario Budget 2012 The budget measures fall into three categories: 1.Jointly-sponsored pension plans 2.Single employer pension plans: and 3.Improving efficiencies in pension fund management

10 Ontario Budget 2012 JSPPs: 1.Must move to a 50-50 co share; 2.Plans in deficit must reduce future or ancillary benefits before employers share increases 3.Benefit reductions to future service only 4.Will have an upper limit on reductions before contributions must go up 5.Will provide a new third party dispute process 6.Expect parties to negotiate or will be legislated

11 Ontario Budget 2012 Single Employer Plans (Universities) 1.Must move to a 50-50 co share within five years 2.Temporary solvency measures will be adjusted to encourage the changes 3.Will support efforts to convert to a JSPP 4.Expect parties to negotiate but no word on whether they will legislate required action

12 Ontario Budget 2012 Investment Efficiencies 1.Budget states that investments held by the provinces smaller public sector pension plans should be consolidated into an existing larger public sector plan or pooled into a new entity. 2.The legislative framework will be developed by an advisor appointed by the province working with the stakeholders 3.Government identified the pension plans of Ontarios 20 Universities as an example of plans that lack scale to optimize return

13 Ontario Budget 2012 Budget also proclaims certain parts of Bill 236 into law as of July 2012: 1.Eliminates partial wind-ups 2.Implements immediate vesting 3.Allowing MEPPS and JSPPs to opt out of grow in benefits 4.Extends grow in benefits to terminated members – other than for cause

14 U of T – Pension Issues Stage 1 Solvency relief application filed in December 2011 Was recently accepted by regulators July 1, 2011 Actuarial Valuation accepted by Pension Committee and filed Also approved were the 2011 Audited Financial Statements and the Pension Fund Master Statement of Investment Policies and Goals Effective June 2012, Professor Luste (labour) assumes the Chair of the Pension Committee

15 Budget-Pension Update Questions??

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