Q1. I appreciate QUFA’s efforts to keep members informed on developments with the proposed changes to the pension plan. I was reading through the UPP website and had a question about the implications of the proposed changes with respect to the “Early Unreduced Retirement Date”.
From the materials: “Early Unreduced Retirement Date (EURD) – a member will be able to retire early with an unreduced pension under the UPP upon reaching age 60, provided that the sum of the member’s age plus years of continuous service (including service under a predecessor pension plan) equals 80 or more”
I want to be sure that I’m understanding this correctly. If the proposed plan is accepted, does this mean that all current Queen’s employees (under the existing plan) would be eligible for early retirement at age 60 with an unreduced pension, provided their years of service (which would include years of service under our current plan) and their age was greater than or equal to 80? I am pleased to see that Queen’s will be coming into alignment with other universities regarding this policy, but wanted to ensure that existing employees would have their current years of service recognized in these calculations.
Can you help me to confirm if my understanding is accurate?
A: Queen’s does not currently have an unreduced pension option on the QPP. The rules governing the QPP will apply to your pensionable years under that plan. The UPP will have an unreduced pension at age 60 80 factor. At Queen’s this will only apply to that part of your overall pension generated after the start of the UPP plan – seen as July 2021 at his point. The sum of your years in the QPP and UPP will make up the 80 factor.
Q2. I have read the document titled “Summary of Key Features of the Proposed UPP” found at http://www.universitypension.ca/. I am wondering what if any options might be available to a member who’s age and years of service exceed 80 before the age of 62.
A related question is what will be the Normal Retirement Date under the UPP? Will it be 62 for someone who already exceeds the 80 factor or 65 regardless of the factor?
A: Currently there is no reduced retirement with full pension at Queen’s. If the new UPP is adopted then individuals will have pension credits for the years in the QPP and going forward credits in the new UPP. The sum of the QPP and UPP years of service will be the 80 factor. However, for years in the QPP the pension calculation will be done based on the QPP rules (no unreduced full pension prior to age 65); for years in the UPP, age 62 and 80 factor will give an unreduced pension at that point. The two calculations will add together for the full pension. If you have 80 factor but want to retire before 62 then there is a penalty from age 65 to say age 60 of 5% a year in the new plan. For each individual, the proportion of credits in the old and new systems will change over time. There are still some active discussions about some aspects of this at Queen’s.
Q3. If I understand correctly, two different ‘normal retirement dates’ will apply; 65 for the QPP portion and 62 (with 80 factor) for the UPP portion. Right? So if I remained at Queen’s until 62, only the QPP portion would be reduced and that reduction would be by 15% (5% * 3 years).
A: Yes for the UPP; QPP reduction is 3 or 4% – so less of a hit
Q4: I realize that I would need to meet with someone or access a program to provide the precise values of the final pension based on different scenarios but I just want to make sure I understand the workings of this proposal.
I realize that the option to retire at 62 is a plus and the need to attach a reasonable minimum age to the 80 factor but it seems that there is something amiss when I see that someone who starts working at Queen’s under the new UPP could retire with a full pension after only 18 years of service if they joined Queen’s at age 44. I have been at Queen’s since 1989 (29 years of service) yet my pension would be considerably reduced if I retired early (I have already passed the 80 factor and I am not yet 55!). Maybe I am an anomaly but something to consider as negotiations proceed if it has not already been discussed.
A: If you join QUEENS’s at 44 then you have 18 yrs in plan at 62 and 18 years of service.
It is not a full pension in sense of maximum possible. It is an Unreduced pension – 18 year’s times 2%, 36% of your best 4 year’s salary.