Below you will find questions we have received at Queen’s, the UPP group has also created an FAQ that you may find useful here: http://www.universitypension.ca/Questions.
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. This will apply to the QPP and the UPP plan after inception, 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. Following inception the age 62 and 80 factor will apply to both the QPP and UPP portions of your pension and will give an unreduced pension at that point. If you have 80 factor but want to retire before 60 then there is a penalty from age 65 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.
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: Both the QPP and the UPP portions are covered under the age 60, factor 80, early non-reduced pension rules.
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.
Q5: Is there is going to be a set period of time before people can avail themselves of the
provisions around early retirement. In other words – could people retire under the new plan as soon as it
comes into being? I have talked to a number of people who will be 60, 61 or 62 when the
new plan starts and would love to take the early retirement option as
soon as possible. Me too. Will there be a waiting period?
A: At the point where the new plan starts (inception), your accrued pension benefits are all within the Queens PP and dictated by the existing provisions of the Queens PP. The QPP does not have an early retirement provision without penalty. After inception your accrued benefits will within the QPP and the UPP will be subject to the factor 80 age 60 early retirement provision. Years spent in the QPP will contribute to the calculation of the factor 80.