Dear QUFA Members,
You recently received a notice package explaining your current pension status and comparing the Queen’s plan with the University Pension Plan under development. Many people have inquired about the difference in the value of their pension reported in these packages with the value projected in our annual pension statements. We asked Bob Weisnagel to explain this difference and he responded as follows:
“The notice packages (which are prescribed by government regulations) only capture the defined benefit pension accrued to September 30th, 2018 and were intended to show that the minimum guarantee value under the QPP accrued as at that date (Schedule 1) will still be available under the UPP after conversion (Schedule 2) – in other words, no change to the defined benefit that you have accrued and payable on an unreduced basis at normal retirement if the UPP gets consent from its members and eventually goes live. In comparison, however, your annual statement provides a projection of your pension (both money purchase and the minimum guarantee) to your normal retirement date and so includes additional years of service/accrual, hence the higher projected values. Additionally, please note that the hybrid treatment of your Queen’s benefit (“greater of” money purchase vs. minimum guarantee) will continue post conversion.”
The difference can be quite significant depending on how far you are from the normal retirement date. In any case, we hope Bob’s explanation helps allay some concerns.