Re: I voted for the DB plan and here's why

[Tamon Stephen <tamon@sfu.ca>]

Hi Carla and others,

Thanks for further interesting posts.  It's great to hear that many people are contributing to their RRSP's despite the various challenges we have in living in Vancouver.  More power to you.

About the public service and people not leaving, DB plans do have the unfortunate side effect of punishing mobility, they are certainly best for people who work 30+ years at the same place.

About Ontario ... if only we could have Ottawa's housing market without giving up the mountains and the sea and mild climate.  My friends in Ottawa may be mild amused to find that I am not forced to put as much into my pension as they are, but they are scandalized by the price of housing here.

I think it worthwhile to check out some of the DB plans in Ontario.  I looked at 3 just now, starting with Carleton.  None of them matches BCCPP's 10.15% forced contribution rate.  So our friends in Ontario may still be laughing uncomfortably at us next year.  (We'll still have Doug Ford to hold over them.)  Interestingly, all 3 have a reduced contribution rate for people with lower incomes, which would be a great thing for BCCPP to consider (not that we'll have any influence over it). 

Carleton: 4.37% below YMPE*, 6% above: <http://cuasa.ca/member-resources/career-information/benefits-information/>
U of T: 6.8% before YMPE, 8.4% above: <http://pension.hrandequity.utoronto.ca/#about> (Big jumps noted in 2012-13 due to a delayed 2008 effect??)
Waterloo: 6.26% before YMPE, 8.95% between YMPE and 2xYMPE, 9.95% above that: <https://uwaterloo.ca/human-resources/support-employees/pension/joining-plan#contributions>

For the first two, I had to browse the linked handbooks.  p. 34 for Carleton, p. 19 (numbered 13) for U of T.

Best regards,

Tamon

* YMPE = Yearly Maximum Pensionable Earnings, a number set annual by the government which also affects your CPP contributions.  Details here: <https://www.canada.ca/en/revenue-agency/services/tax/registered-plans-administrators/pspa/mp-rrsp-dpsp-tfsa-limits-ympe.html>.  It's $57,400 for 2019.  As I understand it, the percentages are all pre-tax figures.

________________________________________
From: Carla Graebner <cgraebne@sfu.ca>
Sent: November 26, 2018 11:33 AM
To: 'academic-discussion@sfu.ca'
Subject: I voted for the DB plan and here's why

Hello,

As soon as the survey went live, I voted yes—without hesitation.

Prior to coming to SFU, I worked for the Public Service which, as you may know, has a Defined Benefit pension. There is a singular reason why people don’t leave the public service and why many are attracted to it: the Defined Benefit pension. When I was hired at SFU, I was told we “had a very good pension” which was not really true. It would not have prevented me from joining the SFU community but would have made think a little harder about my decision. I have colleagues who have retired from the public service at age 58 who receive as a pension an amount very close to my current salary. Many of our academic colleagues in Ontario also enjoy being part of a Defined Benefit plan—which they will not bargain away.  I had a conversation recently with a former instructor of mine from Carleton and who, like me, was actively involved in his association. We discussed retirement benefits and when I told him about ours, he laughed (a little uncomfortably, I thought) and suggested I get a position at a different university. He’s quite comfortably retired now, not at all worried about his finances, while my partner jokingly suggests I do what I can to join the ‘cat-food avoidance plan.’

Carla

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Carla Graebner
Librarian for Research Data Services and Government Information
W.A.C. Bennett Library, Simon Fraser University
8888 University Drive, Burnaby, B.C. V5A 1S6 Canada
Email: cgraebne@sfu.ca
Tel: 778.782.6881
Fax: 778.782.6926

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