Board Communique: July 14, 2023

Changes to pension option tables may affect some members with a special agreement balance who retire on or after April 1, 2024

Following the report from the last actuarial valuation, the Municipal Pension Board of Trustees decided to change the actuarial assumptions used in pension option tables to reflect current pension costs. These changes will take effect April 1, 2024.

What are option tables, and why are they changing?

Option tables are used to calculate optional forms of pension. If a member chooses an optional form of pension—or chooses to convert a special agreement balance to an additional monthly pension—the option tables determine the pension amount.

The factors in the option tables are based on economic and demographic assumptions used in the plan’s actuarial valuation. When those assumptions change, we consider whether the option tables must also change.

Normal forms of pension provided by the plan are not affected by option tables.

How are members with special agreements affected?

Changes to the option tables affect members with a special agreement balance who choose to:

• retire on or after April 1, 2024
• convert a special agreement balance to an additional monthly pension at retirement

There is no impact to members who choose to take their special agreement balance as a lump sum.

If a member converts a special agreement balance to an additional pension, the pension amount purchased with the special agreement balance may be lower on or after April 1, 2024.

These changes will not be reflected in online pension estimates or paper estimates until April 1, 2024. Members with a special agreement balance who are considering retiring can contact the plan for more information and estimates.

Examples

Here are two examples to show how the change may affect your special agreement pension amount:

Retiring at age 55

Retiring at age 60

Check the related content in the right column for more information about special agreements.