Public Service Pension Plan Changes to Take Effect April 1
The Public Service Pension Plan (PSPP) board has voted in favour of proposed changes to the pension plan, designed to modernize the plan and make it more equitable for a significant number of their members.
The majority of plan members of the public service pension earn less than $55,900 (2018), which is the year's maximum pensionable earnings (YMPE) used to calculate a lifetime pension. For these plan members, the effect of these changes is a higher lifetime pension, ensuring that they receive an appropriate benefit for their contributions regardless of retirement age chosen, earnings, or employment. However, for higher-income earners, including registered nurses, the changes are inequitable - especially for those planning to retire within the next decade.
The key changes to the administration of the plan, effective April 1, 2018, include:
- the move to a flat accrual rate of 1.85% on future service and flat contribution rate of 8.35% for all members for service earned on and after April 1, 2018
- the bridge benefit will no longer apply to service accrued on or after April 1, 2018
- the rule of 85 (unreduced early retirement if your age plus years of contributory service equal at least 85) will be removed. Instead, members will receive an unreduced pension after 35 years of contributory service.
Who is affected?
- Members who are working now, and planning for their retirement, those who are currently retired and for those who are inactive but not yet retired
Resources available
BCNU strongly recommends that PSPP members go to https://pspp.pensionsbc.ca to learn more about this decision to change the pension formula, or call them at 1-800-665-3554.
Important links: