About the Municipal Retiree Benefit Trust
Learn more about the trust and its management of group health benefits.
The Municipal Retiree Benefit Trust (MRBT) was created on October 1, 2021, and became effective January 1, 2022. The trust aims to provide current and future retired members of the Municipal Pension Plan with access to group health and dental benefits.
Before the MRBT, group benefits were managed by the Municipal Pension Board of Trustees.
How the trust works
The MRBT is an employee life and health trust (ELHT). ELHTs are a tax-efficient way to fund secure life, health and dental benefits for plan members.
The MRBT is an independent benefits trust. Funds contributed to it pay expenses (to run the trust) and claims. Funds also earn investment income over time.
Why the trust was created
The Municipal Pension Plan partners created the MRBT as part of the plan design changes that took effect January 1, 2022. The plan partners are:
- The provincial government and Union of British Columbia Municipalities (the employer partner)
- The Municipal Employees’ Pension Committee (the member partner)
Before January 1, 2022, funding for retiree group health benefits came from two sources:
- Employer contributions
- Premiums paid by retired members who choose the coverage
Employer contributions had to be used in the same year. That meant they couldn’t carry over to future years and they couldn’t earn investment income.
The MRBT provides more flexibility in funding retiree group benefits. The contributions to the MRBT are used to pay for retirement benefits and expenses. Any excess contributions can accumulate and earn investment income. This improves the sustainability of the group benefit program.
How the trust is funded
Funding for the trust comes from three sources:
- A one-time transfer of $100 million from employer contributions in 2021
- Ongoing employer contributions of 0.6 per cent of salary
- Premiums paid by retired members
The money in the trust accumulates and earns investment income over time. Funds are invested by British Columbia Investment Management Corporation (BCI) under the guidance of MRBT trustees.
How the trust is governed
The trust is governed by its Joint Trust Agreement (JTA). Joint trusteeship is the shared governance of the trust. The two plan partners each appoint four trustees to the Municipal Retiree Benefit Board of Trustees. A minimum of two of these trustees are retired members of the Municipal Pension Plan and a minimum of two trustees are active members of the Municipal Pension Plan.
The MRBT board is responsible for managing the Retiree Benefit Plan and the Retiree Benefit Fund. The trustees oversee plan administration, manage assets and appoint professional advisors, if needed.
As an ELHT, the MRBT must follow certain rules and regulations. These include rules set by the federal government Department of Finance, Canada Revenue Agency and the Income Tax Act.
The MRBT board is responsible for the financial stability of the trust. That includes providing direction to the BC Pension Corporation and BCI.
Role of Pacific Blue Cross
Pacific Blue Cross and the MRBT provide health and dental coverage.
Pacific Blue Cross is responsible for:
- Administering the extended health care and dental plans
- Providing membership identification to participants
- Processing claims
- Providing online and phone support to participants
- Providing reports to the board
Role of British Columbia Pension Corporation
Pension Corporation provides benefit administration services, including:
- Processing group benefit applications and cancellations
- Managing changes to dependants and beneficiaries
- Deducting premiums
- Providing services to the board
Role of BCI
BCI provides investment management services as an agent of the board. As one of Canada’s largest investment managers, it administers $199.6 billion in assets on behalf of public sector pension plans, the provincial government, public trusts and insurance funds.