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Analysis

The Plan has two (2) components – one for past service credits and another for future service. Please note that the rules for past service benefits were changed for members employed by employers who joined the Plan on or after January 1, 2012.

Past service benefits are provided, to specified limits, for employment prior to the workplace joining the Pension Plan. They are paid in the form of a ‘flat' target benefit. This simply means that the benefit is a flat amount, for each year of eligible service for employees with eligible past service who retire after completing the minimum period of service. The past service part of the Plan disregards varying earnings levels of members. That is, all participants get the same flat benefit per year of service if their contribution rate, employer and employee is 8 % or more in the last 12 months of employment. Where the contribution rate is less than 8% in the last 12 months of employment the past service credits will be prorated.

The future service portion of the Plan is a ‘career average' target benefit. It is based on contributions throughout one's participation in the Pension Plan.

Participants will become eligible to become members of the plan in accordance with the eligibility rules in their collective agreement. All members of the bargaining unit join the Plan once they become eligible.

A Target Benefit Plan uses a formula to determine the retirement benefit to be received. However in the event that the Pension Fund is unable to meet all of its obligations, target benefits may be reduced. If the Plan is in surplus, on the other hand, benefits may be increased.

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