Nova Scotia Pension Services Corporation 2015 Public Service Superannuation Plan NOT COMPLETE WITHOUT COMMENTARY

Nova Scotia Pension Services Corporation 2015

Public Service Superannuation Plan

NOT COMPLETE WITHOUT COMMENTARY


Public Service Superannuation Plan

The Public Service Superannuation Plan (PSSP)

is a defined benefit registered pension plan that

provides benefits to eligible public servants and

their families upon attainment of 2 years of eligible

service.

Participation is mandatory, to a maximum of 35 years


Common Terms

Pensionable Service

Service on which contributions have been made to the plan, including Purchases and Reciprocal Transfers into the Plan

HAS Highest Average Salary

Calculated as the average salary of the best 5 years, ie. the sum of the highest 130.5 biweekly pays divided by 5

Maximum Age Pension payment must begin no later than December of the year in which age 71 is attained


Unreduced Pension Benefit

Provided you meet one of the following sets of criteria:

• Age 60 + 2 yrs eligible service

• Age (minimum age 50) + yrs of eligible service = 80

• Age (minimum age 55) + yrs of eligible service = 85 (*applies if employed on or after April 6, 2010)


Reduced Pension Benefit

• Age at least 55 + at least 2 yrs eligible service

• Pension is reduced by 0.5% for each month prior to unreduced date (6% per annum)

• For example – 3 years early is an 18% reduction


Pension Contribution Rates

Salary < $53,600 Salary > $53,600

Contribution Rate 8.40% 10.90%

CPP Contribution Yes No

Benefit Payable pre Age 65 (1.3% + 0.7%) = 2% 2% on excess

Benefit Payable at Age 65 1.3% 2% on excess

Benefit Formula Salary

• The plan is integrated with CPP• Contributions increase over the YMPE ($53,600)• A Bridge Benefit is paid until age 65


Unreduced Pension - Example 1

At Age 60 At Age 65

1.3% x 35 yrs x $40,000 (lifetime) $18,200.00 $18,200.00

0.7% x 35 yrs x $40,000 (up to age 65) $9,800.00 $0.00

ANNUAL PENSION $28,000.00 $18,200.00

MONTHLY PENSION $2,333.33 $1,516.67

DIFFERENCE $816.66

Benefit Formula

Assume HAS $40,000 and Average YMPE $47,360


Unreduced Pension - Example 2

At Age 60 At Age 65

1.3% x 30 yrs x $47,360 (lifetime) $18,470.40 $18,470.40

0.7% x 30 yrs x $47,360 (up to age 65) $9,945.60 $0.00

2.0% x 30 yrs x $7,640 (lifetime) $4,584.00 $4,584.00

ANNUAL PENSION $33,000.00 $23,054.40

MONTHLY PENSION $2,750.00 $1,921.20

DIFFERENCE $828.80

Benefit Formula

Assume HAS $55,000 and Average YMPE $47,360- $7,640 above YMPE


Pension Splits

• Occur as a result of marriage breakdown

• Member is considered legally married until divorced. Require a copy of a Corollary Relief or Court Order

• Former spouse is entitled to up to 50% of member’s pension earned from the date of marriage/cohabitation to the date of separation

• Former spouse’s pension goes into pay when the members retires or when the member reaches age 65


Pension Split Payments

• Pension to former spouse is paid monthly

• Former spouse may also be entitled to receive payment of the commuted value of their share of the pension when the member becomes entitled, even if the member does not elect to do so


Purchases

• Full-time casual service, of a minimum of 6 months continuous service

• Outside service, from a recognized public authority. Please contact us for further information

• Prior refunded service

• Acting pay, for a period of at least 6 months in the acting position. Can purchase acting pay at the earliest of the end of the acting position or retirement


Purchases

• Must purchase the full service; cannot purchase partial acting service


Additional Pension Benefits

Canada Pension Plan

Maximum monthly benefit at age 65 $1,065.00

Average at Age 65 $594.19

Old Age Security

Maximum monthly benefit at age 65 $569.95Restrictions apply, depending on total net income

Source: www.servicecanada.gc.ca (July 2015)


Termination Benefits If you terminate employment after attaining 2 years of

eligible service and are not eligible for immediate

unreduced pension. You will be entitled to one of the

following:

• A deferred pension payable at the earlier of age 60 or when (minimum ) age 50 + years of eligible service = 80 (minimum age 55 + service = 85 for members first employed on or after April 6, 2010)

• A reduced pension payable as early as age 55

• Transfer Commuted Value (the present value of your

pension) to a Locked-In RRSP (ITA Rules)


Definitions

Spouse • Either of two persons who are married to each other or,

• If not married to each other, are registered domestic partners or,

• Are cohabiting in a conjugal relationship and cohabited in that conjugal relationship for at least three years immediately preceding the relevant time (one year if neither of them is married)


Definitions

Child The natural or adopted child of a member or former member; or a person for whom a deceased member/former member stood in loco parentis at the time of the death of the member/former member. Includes legal guardians

Dependent The father, mother, grandfather, grandmother, brother, sister, child or grandchild of an employee who, at the date of the death of the employee, is byreason of mental or physical disability, dependent on the employee for support.


Death Benefits

Having accrued 2 years’ eligible service:

Spouse (pre retirement death)For 5 years, 100% (Guarantee) of member’s pension less children’s benefits. After the Guarantee, 66.67% or 60% for life with post-1991 bridging removed

Spouse (post retirement death)Remainder of 5 year guarantee then, 66.67% or 60% for life with post-1991 bridging removed at age 65


Child(ren):

Payable to age 18 or age 25 with annual proof of Full-Time attendance at a recognized educational institution:

• 10% of member’s pension each (maximum 3 children)

• proportionate share of 33.33% of member’s pension when greater than 3 children

• if no spouse, eligible children split 66.67% or 60% in place of the children’s benefit

Death Benefits


Death Benefits

Dependent (no spouse or children)66.67% or 60% of member’s pension for life

Designated Beneficiary or EstateIf no eligible survivors, a refund of member contributions with interest will be paid to the member’s designated beneficiary or estate


Pension Indexing• Indexing is set in five-year blocks and is created in January of

each year

• Indexing until the end of 2015 is 1.25%. Indexing for January 1, 2016 to December 31, 2020 has been set at 0.85% each year

• Future indexing is dependent on the funded ratio of the Pension Plan as at December 31 at the end of each 5-year cycle. If the plan is less than 100% funded, no indexing will be credited

• Indexing is pro-rated for the first calendar year of a newly established pension


Retirement Package

Birth certificate/ Passport (photocopies), self and spouse if applicable

Spouse’s full name Social insurance numbers, self and spouse if applicable Copy of Proof of Marriage Document if applicable Home address with postal code TD1 Income Tax Form Direct Deposit Enrollment Form or Void Cheque

Please contact your HR department at least 2 months in advance !


Nova Scotia Pension Services Corporation1949 Upper Water Street4th Floor, Purdy’s LandingHalifax NS B3J 3N3

Tel. Toll free in NS: 1 800 774 5070Tel. Local: 424 5070Fax: 902 424 0662Email: [email protected]

www.novascotiapension.ca

Contact Us


Additional Benefits

• Public Service Award

• Group Insurance Plan

• Retired Employees Health Plan

These are not administered by NS Pension Services Corporation


Public Service Award (PSA) PaymentsCalculation-

• Equal to one week of gross salary for each year of service to a maximum of 26 years (a partial year will be prorated)

• The salary used in the calculation will be the greater of the salary the employee was receiving at the time of retirement or the 5 year average salary used in the employee’s pension calculation

• Payable to those who will be receiving an immediate pension benefit and who do not receive a severance benefit


Public Service Award (PSA) Payments

Payment Options-

• Cash to the Employee (less withholding taxes)

• Transfer to an RRSP tax free

• Transfer to purchase prior service under the Public Service Superannuation Plan


Tax Free Transfer of PSA• As per 60(j) of the income tax act, transfer eligibility is

equal to $2,000 for each year of service prior to 1996 (transfer does not decrease personal RRSP room)

• Part of a year prior to 1996 is deemed to be a full year

• PSA benefits greater than what is permitted under 60(j) are eligible to be transferred to the employee’s RRSP if there is room available

Reminder – Any outstanding PSA Advances are deducted from PSA amounts and are TAXABLE. You may wish to consider arranging repayment from sources other than your PSA to avoid negative tax consequences.


PSA Transfer Examples

Employee

PSA entitlement: $25,000.00 Service Prior to Jan 1,1996 = 10 years $20,000.00 Transfer eligibility under 60(j) $20,000.00

Non eligible $ 5,000.00


Group Life Insurance

&

Health Plan



• If retiring prior to age 65, coverage will continue to age 65

• If retiring at age 65 or after, coverage will continue for 3 months past the date of retirement

• Pensioner is responsible for 100% of the premium cost for Basic and Optional insurance coverage

• Basic premium rate is $0.238 cents / $1,000 of coverage

• Optional premium rate is based on age



• Coverage is not available if you defer your pension

• Pensioner can reduce or cancel coverage at any time; but once coverage is reduced or cancelled, it cannot be re-instated in the plan at a later date

• Existing designated beneficiary on file at the PSC is still valid after retirement. However, the pensioner may change the designated beneficiary at any time by completing a Beneficiary Nomination Form


Group Life InsuranceConversion Privilege:

• A pensioner who has maintained coverage during retirement, will have the option to convert this coverage to an individual policy at age 65. The PSC will contact the pensioner prior to their termination date to explain the details of their of their group life insurance conversion

• The insurer does not require medical evidence if the coverage is converted within 31 days of the termination date

• The premium for the individual policy will not be the same as under the group policy


Health Plan• Coverage under the Employees Health/Dental/Travel

plan will continue for 28 days following the retirement date

• Blue Cross identification number and claims history are automatically transferred to the Pensioners Health plan

• The Pensioners Health plan has different plan maximums for the covered services and is not similar to the Employees Health plan

• Dispensing fee co-pay changes to a co-pay of $5.00 per prescription


Health Plan• Coverage for prescription drugs will continue to age 65. • Extended health benefits will continue after age 65.• If your spouse is under 65, their drugs are covered until

their 65th birthday.• Pensioners who require drug coverage after age 65 can

purchase drug coverage through the Seniors or Families Pharmacare Programs.

• The PSC must be notified of any of the following changes:

• Addition/deletion of dependent/s• Dependents in university who are between ages 21-25 Overage dependent form required each school year• Change Forms are available on PSC website• Changes to your name or address are to be forwarded to the

NSPSC; Blue Cross will be updated automatically


Monthly Health Plan Costs For 2014 – 15

Group 6000

Under Age 65

Pensioner Employer Total

Single $29.90 $55.53 $85.43

Family $66.34 $123.20 $189.54

Group 6500

Over Age 65

Pensioner Employer Total

Single $15.89 $29.50 $45.39

Family $31.87 $59.18 $91.04

Health booklet & costs are on the PSC website www.gov.ns.ca/psc

•Premium cost share remains the same: Employer 65%; Pensioner 35%


For pensioners covered under the Public Service Superannuation Plan contact:

Nova Scotia Public Service CommissionBenefitsP.O. Box 943Halifax NS B3J 2V9

Phone: 902-424-3240 E-mail Address: [email protected] Fax: 902-424-0756

Contacts for Retired Employees Group Life & Health Insurance Plan

Documents

Nova Scotia Pension Services Corporation 2015 Public Service Superannuation Plan NOT COMPLETE WITHOUT COMMENTARY