Guide for plan members

Municipal Pension Plan is committed to helping you make the most of your pension. This guide is a provincial requirement. Please use the links at right to explore the topics most relevant to you.

Cost-of-living adjustments

Your monthly pension payment may increase because of an annual cost-of-living adjustment (COLA). Providing COLAs that are sustainable over the long term and within the plan's long-term funding capacity is the second priority of BC's Municipal Pension Board of Trustees (after providing lifetime pension benefits).

This adjustment may be added to your pension to help it keep pace with increases in the cost of living. The COLAs are based on:

• The change in the Canadian consumer price index (CPI) from September to September
• A COLA cap that may be set by the board
• The funds available in the plan's inflation adjustment account

COLAs are funded from the plan’s inflation adjustment account. This account holds a portion of member and employer pension contributions, and it earns investment income. It may also grow through future surpluses according to guidelines in the plan’s Joint Trust Agreement.

If the board decides to provide a COLA, it will take effect in January. Increases are applied to the lifetime portion of your pension. The COLA is also applied to the bridge benefit and the temporary annuity portion of your pension while you are receiving them.

The board follows specific rules when deciding to provide a COLA for the year within three limits:

• The adjustment cannot be greater than the September-to-September increase in the CPI
• The adjustment cannot be higher than the COLA cap, when it applies
• The cost of the adjustment cannot exceed the funding set aside to pay for the COLA

For example, if the change in CPI from September to September is 6.0 per cent, the board can provide a COLA of a maximum of 6.0 per cent. If the change in CPI is higher than any COLA cap in place at the time, the board can only provide a COLA up to the amount of the cap.

Although future COLAs are not guaranteed, once you have received an adjustment, it becomes part of your basic lifetime pension.

In your first year of retirement, your COLA is pro-rated according to the number of months you’ve received your pension.

For example, if you started your pension in July, you will have received six pension payments in that calendar year. That means you’ll get half (6/12ths) of the COLA amount provided the following January. You’ll receive the full COLA amount once you’ve received 12 pension payments in a calendar year.

View the most-recent winter issue of Pension Life to find out if a COLA will be provided and, if so, its percentage. You can check the pension statement you receive in January to see the impact of the COLA on your monthly pension payment for the coming year.

Questions about cost-of-living adjustments are common for members getting ready to retire. The Cost-of-living infosheet, found under related documents, helps explain how COLA works.

Cost-of-living adjustment history

Health care and dental coverage

When you retire, the extended health care and dental coverage you may have been receiving through your employer will stop. The Municipal Retiree Benefit Trust has partnered with Pacific Blue Cross to offer you access to coverage when you retire. If you choose, you can also include your spouse and/or eligible dependant(s).

As a retired plan member, you can apply for the following coverage:

Extended health care
This supplemental plan extends your medical coverage beyond what is covered by the Medical Services Plan (MSP) of BC and other provincial health plans. It includes coverage for prescription drugs and other expenses such as medical aids and supplies, as well as the cost of some services. The extended health care plan is currently partly subsidized based on your years of service, however the subsidy is not guaranteed and can be changed or eliminated at any time.

Dental care
You can choose from two unsubsidized plans to help cover dental costs.

Enrolment
Enrolling is entirely optional, however the advantage of joining these extended health care and dental plans is that you will receive the Municipal Retiree Benefit Trust's group premium rate. This means your cost is often better than what you could get from an individual plan.

If you do not enrol when you retire and apply for your pension, you can only enrol later on if you have been continuously covered in an extended health care plan and/or dental plan since your retirement date and apply within 60 days of ending that coverage.

How premiums are paid

You must pay premiums to receive these extended health care and dental plans. Premiums are deducted from your pension payments.

The extended health care and dental plans offered by the Municipal Retiree Benefit Trust are not guaranteed benefits, and coverage may change. This means that your coverage, premiums and deductibles may increase, decrease or be eliminated.

Returning to work after retirement

You may decide to return to work after you retire and are receiving a pension from BC's Municipal Pension Plan. If this is the case, you will continue to receive your pension.

After your pension effective date (the first day of the month you begin receiving your pension)

If you start working for an employer that participates in the Municipal Pension Plan, please inform your employer that you are a retired member of the plan. This will ensure that your employer does not re-enrol you in the plan.

Before your pension effective date

If you start working for another employer that participates in the Municipal Pension Plan, you will remain an active member of the plan until you end your employment with both employers. If you applied for your pension prior to starting your new job, you may be able to continue with your retirement application. Contact the plan for more information.

If your new employer does not participate in the Municipal Pension Plan, you may be eligible to contribute to your new employer’s pension plan, if it has one. Talk to your new employer for details.

Death and your pension

The type and amount of any death benefit depends on:

• Your age when you die
• Whom you named as beneficiaries
• Whether you die before or after starting your pension

Shortened life expectancy

If you are an active member of the plan and have a shortened life expectancy, you may be able to access your pension early. Contact the plan for more information.

If you die after you start receiving your pension

The pension option you chose when you retired determines what happens next. The type and amount of a death benefit depends on whether you:

• Chose a single-life or joint-life pension option
• Chose a guarantee period
• Died before or after a guarantee period

Examples:

• If you chose a single life pension with a guarantee period, and you die before that period expires, your monthly pension will continue to be paid to your beneficiaries until the end of the guarantee period. Alternatively, your beneficiaries may choose to receive a lump-sum payment.
• If you chose a joint life pension with a guarantee period, and you die before the guarantee period expires, your full monthly pension will be paid to your spouse until the end of the guarantee period, after which the joint life percentage you selected will be paid to your spouse for their lifetime.

If your beneficiary is an organization, any remaining monthly pension payments will be paid to the organization as a lump sum.

Your spouse and dependent children may be eligible for extended health care and dental coverage through the plan after your death. Certain conditions apply, and coverage is not guaranteed.

If you die before you start receiving your pension

If you die before you retire, your beneficiaries will be paid a death benefit.

Your spouse is automatically your beneficiary unless they waived their right to a pre-retirement death benefit. If your spouse is your beneficiary, their options depend on your age when you die:

• If you die before your earliest retirement age (under 55 for most members or 50 for police officers and firefighters), your spouse may choose:
  • an immediate monthly pension, payable for their lifetime
  • a lump-sum payment equal to the value of your contributions with interest, or the lump-sum commuted value of your pension, whichever is greater
    The commuted value of your pension is the amount of money the pension plan would need to put aside today, at current interest rates, to pay for your future pension at retirement.
• If you die after your earliest retirement age, your spouse is only eligible to receive an immediate monthly pension, payable for their lifetime

If you do not have a spouse or your spouse has waived their right to a pre-retirement death benefit, your beneficiaries will receive a lump-sum death benefit equal to the greater of:

• Your contributions with interest
• The lump-sum commuted value of your pension
  The commuted value of your pension is the amount of money the pension plan would need to put aside today, at current interest rates, to pay for your future pension at retirement.

If you do not have a spouse and have not named a beneficiary through the plan or in your will, the benefit is paid to your estate.

When paying death benefits to a former spouse, we follow the terms in your signed separation agreement or registered court order.