UNIVERSITY OF OTTAWA PENSION PLAN SUPPORT STAFF

UNIVERSITY OF OTTAWA PENSION

PLAN

SUPPORT STAFFApril 28, 2009

Last update: April 16 2009

Biography ofLuc Lauzière, BA, BCOMUniversity of Ottawa

Luc has been employed by the University of Ottawa since 1998 and is currently the Manager of the Pension Sector. Luc is perfectly bilingual.

Education and TrainingLuc is a University of Ottawa Graduate in Administration (1986) and in Commerce with a Major in Human Resourcesand a Minor in Accounting (1987). Since, Luc has acquired other training certifications in Human Resources, Pensionand Benefits.

Professional ExperienceSince 1986 Luc has acquired work experience in Human Resources specifically in Pension and Benefits both in theprivate and public sectors.

• University of Ottawa Manager, Pension April 2005 Present• University of Ottawa Pension Officer March 1998 March 2005• LOEB Inc. (Provigo) Benefits Advisor February 1997 February 1998

LOEB I (P i ) B fit S i J 1992 J 1997• LOEB Inc. (Provigo) Benefits Supervisor June 1992 January 1997

Main Functions, Pension SectorAs the Pension Manager, Luc is responsible for all aspects related to the University of Ottawa Pension Plans, whichare the University of Ottawa Defined Benefit Pension Plan and Part Time Teachers Defined Contribution PensionPlan He is ad ising the Uni ersit of Otta a emplo ees is s per ising the Pension Sector Team is pro idingPlan. He is advising the University of Ottawa employees, is supervising the Pension Sector Team, is providingmultiple pension calculations, and is assisting employees of the Faculties/Services with various requests. The mainaspects of his work is to maintain good communications with the pension members, maintain computerized systems,provide retirement sessions and provide explanations regarding official documents.

Manager, Pension

Preparing for retirementDay 1

Physical Activity and Ageing

Personal Finances: Cash Flow, RRSPs, RRIFs, Annuities

Day 2

Dynamics of Retirement : Psychological Preparation

The Legal Aspects of Retirement

Alumni Relations and the SSRA

Descriptive

AGENDAPension

Defined Benefit Pension PlanPension Governance StructureNon compulsory retirementRequired contributions (employee/employer)Benefit formulaD t f ti tDate of retirementExamples of calculation(6)Voluntary contributionsPension indexationSurvivor benefit optionspPension beneficiaries

Retiring allowanceCalculation University of Ottawa Policy 53Examples (4)Notice

Group benefitsInsurance coverageOther benefits

Summary of retirement benefitsWorking Tools

Reference to your personal pension statement and Annual ReportFinancial plannerp

Agenda

RETIREMENT INCOME

Canada/Québec Pension Plan (CPP/QPP)Old Age Security (OAS)Other employer pension plan(RPP)p y p p ( )Registered Retirement Savings Plan(RRSP)Retirement AllowancePersonal SavingsTax Free Savings Accounts (TFSA)Tax-Free Savings Accounts (TFSA)Investment IncomePersonal AssetsSpouse’s IncomeFiscal ImpactEmployment/Business IncomeOther Plans

Retirement Income

PENSION PLAN

The University of Ottawa Pension Plan is a defined-benefit plan. This means that, at the time of your retirement, you will receive a pension based on a formula that takes into account the average salary of your best 60 months offormula that takes into account the average salary of your best 60 months of earnings and the number of years of credited service you have in the Plan.

-Average Salary -Contributions-Pension Service Employee and-Pension Formula Employerp y

= =Pension Payable (Retirement) Required Funds

XXActuarial Factors

=Commuted Value (Death)

Defined Benefit Pension Plan

Organizational Chart of responsibilities and reporting relationships

Board of Governors Plan Sponsor and Administrator:- Governance structure

Executive Committee

Pension Plan Pension Fund Administrative

- Policies (investment; funding)- Plan terms and provisions

Pension Plan Committee Investment

CommitteePresident

Director, Pension Fund

Administrative Committee

V-P Resources

Pension Fund Assistant Director

Associate V-P Human Resources

Assistant Director Total Compensation

Pension Fund Investment:- Policy recommendations

Investment manager selection

Pension Plan Administration:- Member entitlements- Member communications-Pension administration system

P ib d filiPension Fund Analyst

& Information

Manager, Pension

- Investment manager selection - Performance objectives- Asset custody

Key Advisors: Actuary; trustee/custodian; i t t

-- Prescribed filings

Key Advisors: Actuary; trustee/custodian; regulatory authorities

Pension Officer

Pension Officer

investment managers; consultants

Pension Governance Structure

STATISTICS

University of Ottawa Pension Plan Statistics as at December 31 2008:University of Ottawa Pension Plan Statistics as at December 31, 2008:Fund Value 1,033,353,666 $Pension Benefits Paid 43,644,359 $Withdrawal/Transfers 6,693,685 $Employee Contributions Remitted 10,948,109 $Employer Contributions Remitted 28,481,431 $Transfer Value in the Plan 1,257,559 $Buy-Back Value in the Plan 472,003 $

Number of Retiree 1 608Number of Retiree 1,608Number of Active Member 3,143Number of Deferred Member 732

Plan Activities as at December 31, 2008:,New Members 336New Retirees (active and deferred members) 96Deceased Retirees 44Terminated Members 166 Deceased Active Members 3Amortized Buy-Back 107 Withdrawals/Transfers 60

Statistics

NON-COMPULSORY RETIREMENTBill 211Bill 211

• In June 2005, the Ontario Minister of Labour introduced Bill 211, An Act to amend the Human Rights Code and certain other Acts to endto amend the Human Rights Code and certain other Acts to end mandatory retirement. The Act received Royal Assent on December 12, 2006, to take effect one year after this date.

• Mandatory retirement ended on December 12, 2006. • Ending mandatory retirement will not have an impact on pension

benefits already earned. • Employees can continue membership in pension plans and accrue

b fit t 65 bj t t i t ib tibenefits past age 65 subject to service or contribution caps.• You can contribute to the pension plan up to November 30th in the

calendar year in which you attain the age of 71. Please note that your pension benefit is payable effective the month of December of thatpension benefit is payable effective the month of December of that same calendar year.

Non-Compulsory Retirement

CONTRIBUTIONS

A Required employee contributionsA. Required employee contributionsReform Post-reform(Pre-2004) (Post-2003)

Up to the Y.M.P.E.* 3.40% 4.25%Above the Y.M.P.E. 5.24% 6.55%

B. Employer contributions8.50% 12.52%

*Y.M.P.E. = YEARLY MAXIMUM PENSIONABLE EARNINGS DETERMINED BY THE UNIVERSITY OF OTTAWA PENSION PLAN.

Reform Post reformReform Post-reform(Pre-2004) (Post-2003)

Current UO Y.M.P.E. $31,790 $34,595

(Currently set at $46,300 for 2009 by the Canada/Québec Pension Plan)

Required Contributions (Employee / Employer)

PENSION BENEFIT FORMULA

A. Pension calculation formula (following the reform)• Average salary = 60 best months• For the Pre-2004 service the Y.M.P.E. is set at $31,790For the Pre 2004 service the Y.M.P.E. is set at $31,790

Please note that there is no maximum pensionable service in the pension plan

Service to December 31, 2003 (Pre-2004)

i) $31,790 X 1.3% X pension part. = a) $ , p pii) (Average salary - $31,790) X 2% X pension part. = b

Total annual pension pre-2004 (a + b) = cp p ( )

Benefit Formula

B. Pension calculation formula (post reform)

• Average salary = 60 best months (Total pension service)• Pre-2004 set Y.M.P.E. indexed annually at a rate of 55 % of the

increase in the Y.M.P.E.

Service Post -2003

i) $34 595 X 1 3% X pension part ai) $34,595 X 1.3% X pension part. = aii) (Average salary - $34,595) X 2% X pension part. = bTotal annual pension post-2003 (a + b) = dTotal Annual Pension UO (c + d)Total Annual Pension UO (c + d)

MINIMUM PENSION TESTAs part of the pension plan reform, a participant to the University pension plan i titl d t i i i l t 1 5% f h i (Ais entitled to a minimum pension equal to 1.5% for each pension year. (Average Salary X 1.5% X pension part.)

Benefit Formula

DATE OF RETIREMENTYour normal retirement date as per the plan text is the 1st day of the month coincident with ou o a et e e t date as pe t e p a te t s t e st day o t e o t co c de t tor next following your 65th anniversary. However, you may retire earlier. In that case:

Factor 90 applies ----------------------------->

55 years 60 years 65 yearsEarly Optional Normal

10 000$ 15 000$ 20 000$

Pension Benefit-Factor 90

PENSION CALCULATION -Service to December 31, 2008

AGE: 60 years AVERAGE SALARY: $40,000ySERVICE: 25 years AVERAGE Y.M.P.E.: $31,790 / $34,595

1) SERVICE PRE-2004i) $31 790 X 1 3% X 20 $8 265 40i) $31,790 X 1.3% X 20 = $8,265.40ii) $8,210 X 2% X 20 = $3,284.00 $11,549.40

2) SERVICE POST-2003)i) $34,595 X 1.3% X 5 = $2,248.68 ii) $5,405 X 2% X 5 = $540.50 $2,789.18

Total pension UO 1 + 2 $14,338.58

MINIMUM PENSION TEST ($ 40,000 X 1.5% X 25) =

3) CPP/QPP maximum reduced pension = $7,633.56

Total UO + CPP/QPP = $22,633.56

Benefit Calculation-Example 1




2) SERVICE POST-2003)i) $34,595 X 1.3% X 5 = $2,248.68 ii) $25,405 X 2% X 5 = $2,540.50 $4,789.18

Total pension UO 1 + 2

MINIMUM PENSION TEST ($ 60,000 X 1.5% X 25) = $22,500.00



Benefit CalculationBenefit Calculation-Example 2









Benefit CalculationBenefit CalculationBenefit Calculation-Example 3









Benefit CalculationBenefit CalculationBenefit Calculation-Example 4









Benefit CalculationBenefit CalculationBenefit CalculationBenefit Calculation-Example 5



1) SERVICE PRE-2004i) $31 790 X 1 3% X 5 $2 066 35i) $31,790 X 1.3% X 5 = $2,066.35ii) $8,210 X 2% X 5 = $821.00 $2,887.35

2) SERVICE POST-2003)i) $34,595 X 1.3% X 5 = $2,248.68 ii) $5,405 X 2% X 5 = $540.50 $2,789.18

Total pension UO 1 + 2 $5,676.53

MINIMUM PENSION TEST ($ 40,000 X 1.5% X 10) =



Benefit CalculationBenefit Calculation-Example 6

VOLUNTARY CONTRIBUTIONS

• For pre-1988 service, $200 per year of pensionable earning prior to 1988• Payable at termination, death, retirement or for pension service buy-back• RRSP transfer or cash/taxable option RRSP transfer or cash/taxable option

Estimated value of voluntary contributions

• 25 years of service at December 31, 2008: $ 4,829.43-Initial amount of $800

• 30 years of service at December 31 2008: $10 866 24 30 years of service at December 31, 2008: $10,866.24-Initial amount of $1,800

• 35 years of service at December 31, 2008: $16,903.04-Initial amount of $2 800Initial amount of $2,800

Voluntary Contributions

PENSION INDEXATION

A) Three steps indexation formula based on inflation from previous year(Consumer Price Index (CPI)-September to October)

1 Full indexation if inflation is less than 2%1. Full indexation if inflation is less than 2%

2. 2% automatic indexation if inflation is between 2% and 3%

3. Inflation minus 1% if inflation is between 3% and 8%

B) Special Ad hoc indexation

Annual revisits of percentage not accorded in 2 & 3

Pension Indexation

SURVIVOR PENSION BENEFIT TO THE SPOUSEAND GUARANTEE PERIODS

1. Standard Option5 years guarantee / 60% Survivor benefit to the spouse

2. Optional Options 0 years guarantee / 60% Survivor benefit 10 years guarantee / 60% Survivor benefit 15 years guarantee / 60% Survivor benefit 100% lifetime with 0-5-10-15 years guarantee periods

R d ti f 15% f th 100% i b fit-Reduction of approx. 15% for the 100% survivor benefit-Reduction of approx. 2% for a 10 years guarantee period-Reduction of approx. 5% for a 15 years guarantee period

Note: There is only one choice at retirement

Survivor Pension Benefit

PENSION BENEFICIARIES

Pre-retirement (Pension Benefit Value payable): 1) Spouse

The person married to you by a religious or civil ceremony or with whom you have been living in a relationship that resembles a marriage for at least one year and whom you havein a relationship that resembles a marriage for at least one year and whom you have designated in writing to the University as your spouse. Based on pension plan text, waiver of spousal benefit allowed before retirement.

2) Designation or Estate

Post-retirement (Survivor Benefit payable based on choice):1) Spouse

Same as above. Based on pension plan text, no waiver of spousal benefit allowed at retirement.

2) Children Your eligible dependent children as per the provisions of the plan are your natural or adopted children under 19 whom you support and/or is under age 27 and a full time student in a y pp grecognized education institution and/or is physically or mentally disabled.

Pension Beneficiaries

RETIRING ALLOWANCE

A) Less than 60 years of age without factor 90

2003 Std l l t ti t X 004 X UO i X 5 i2003 Std salary class at retirement X .004 X UO service X 5 maximum

B) 60 years of age or less with factor 90

2003 Std salary class at retirement X .006 X UO service X 5 maximum

C) Or based on your collective agreement

Revenue Canada Agency tax sheltering policy (Under paragraph 60(j.1) of the Income Tax Act)

$ 2,000 for each year of service (pre-1996) may be transferred to an RRSP plus$1,500 for each non-contributory year of service

Retiring Allowance

EXAMPLES: 35 hours per week May 1st, 2003Class Age/service/ratio factor Non-Taxable TaxableC ass ge/se ce/ at o acto o a ab e a ab e

4 58/25 (30,595*.004*25*5)= $15,297 $ 15,297 $060/25 (30,595*.006*25*5)= $22,946 $ 22,946 $0( )62/25 (30,595*.006*25*3)= $13,768 $ 13,768 $0

6 58/25 (36,435*.004*25*5)= $18,217 $ 18,217 $060/25 (36,435*.006*25*5)= $27,326 $ 26,000 $1,326( )62/25 (36,435*.006*25*3)= $16,396 $ 16,396 $0

8 58/25 (43,891*.004*25*5)= $21,945 $ 21,945 $060/25 (43,891*.006*25*5)= $32,918 $ 26,000 $6,918( , ) , , ,62/25 (43,891*.006*25*3)= $19,751 $ 19,751 $0

10 58/25 (54,768*.004*25*5)= $27,384 $ 26,000 $1,38460/25 (54,768*.006*25*5)= $41,076 $ 26,000 $15,076( , ) $ , $ , $ ,62/25 (54,768*.006*25*3)= $24,646 $ 24,646 $0

Retiring Allowance

NOTICE

Retiring Allowance

GROUP BENEFITS

A) Group Insurance (monthly premium May 1st, 2008 before the provincial tax)

Single FamilySingle Family• Hospital insurance (Semi-private) 6.46$ 12.22$• Drug plan (to age 65) 66.32$ 171.34$• Dental insurance (to age 65) 19.66$ 59.28$( g ) $ $

The monthly premiums are paid by the retiree

After 65 of age, the following programs are available (Booklets are available) :• MROO, (Municipal Retirees Organization of Ontario)• Follow-me (Manulife Financial)• RTIP OTIP (Retired Teachers Insurance Plan of Ontario)• RTIP-OTIP (Retired Teachers Insurance Plan of Ontario)

Group Benefits

GROUP BENEFITSB) Life Insurance

Employee became insured:

• Prior to May 1, 1971 50% of salary at retirement (Max $100,000 of coverage)

• On or after May 1, 1971 but prior to July 1, 1976 2.5% of salary at retirement per year of service max 20 years (Min $2,000 Max $100,000)

• On or after July 1, 197610 i l $2 00010 years service or less = $2,000 more than 10 years of service = 10% of salary at retirement (Min $2,000 Max $5,000)

-The monthly premiums to maintain the life insurance coverage are at the University’s cost and is a taxable benefit for the retiree a T4A slip will be issuedtaxable benefit for the retiree, a T4A slip will be issued.-Any transfer of pension service is not recognized under the hire date

C) Health Care Spending Account (Manulife Financial in effect since May 1st, 2002)

• Annual Health Care Spending Account of $96 (Contract 84447)• Or based on your collective agreement

Group Benefits

OTHER BENEFITS

1) Tuition fee exemption for employees and eligible dependants untilretiree’s 70th birthday

2) Library services

3) Sports services

4) E-mail services

Other Benefits

SUMMARY OF BENEFITS AT RETIREMENTSUMMARY OF BENEFITS AT RETIREMENT

Pension payable from the University of Ottawa Pension PlanPension payable from the Canada/Québec Pension PlanVoluntary contributionsRetiring allowanceLife insuranceMedical insurance health/dental/hospitalizationHealth Care Spending AccountOther benefits

Summary of retirement benefits

THE UNIVERSITY OF OTTAWA RETIREMENT PENSION PLAN PROJECTED OPTIONAL RETIREMENT Estimation of projected retirement benefits

- 2 -

Life Insurance - premium paid by UO - taxable benefit to member

$5,000.00

Supplementary Health Insurance At member's expense: premiums are deducted

Family coverage

Name: Retiree Employee Number: 100000000 Projected Retirement Date: 2009 Age at Retirement Date: 60.0000 years old Date of Employment: 1985 Seniority Date: 1985 Current Salary: $55,000.00 Credited service for Pension: 18.0000 years (includes buyback of past service)

At member's expense: premiums are deducted from monthly pension Current monthly rate: End Date: This option is available only if you are covered for Supplementary Health Insurance on your retirement

$185.05 per month May 1, 2014

Dental Insurance Terms/Grants/GFT are not eligible At b ' i d d t d

Family coverage $64 02 th B iEmployment Service: 22.0000 years

Estimated projected monthly pension from UO pension plan, before statutory deductions

$1,100.00

The calculation of your pension is based on the pension formula in force at January 1, 2004. The projection shown above assumes that you will participate in the pension plan at 100% until your Projected Retirement Date. This projection is based on your current salary and does not take into account any future salary increases. For service credited since January 1, 2004, the calculations are based on the current Yearly Maximum Pensionable Earnings (YMPE) under Canada Pension Plan (CPP). The current actuarial factors have been used to determine the actuarial reduction if applicable The actuarial factors are subject to

At member's expense: premiums are deducted from monthly pension Current monthly rate: End Date: This option is available only if you are covered for Dental Insurance on your retirement

$64.02 per month - Basic $42.62 per month - Optional May 1, 2014

Hospital Room Insurance At member's expense: premiums are deducted

Family coverage

current actuarial factors have been used to determine the actuarial reduction, if applicable. The actuarial factors are subject to change monthly.

Estimated monthly benefit from Canada Pension Plan Current Maximum benefit at age 65 is $908.75/mth for 2009 Current Maximum benefit at age 60 is $636.13/mth for 2009

$636.13

For more information on CPP benefit, you may contact Human Resources Development Canada, Income Security Programs at 1-800-277-9914 or visit the website at www.hrsdc.gc.ca. Registration: http://www.servicecanada.gc.ca/en/online/mysca.shtml

from monthly pension Current monthly rate: This option is available only if you are covered for Hospital Room Insurance on your retirement

$21.49 per month - Private room $13.20 per month - Semi-private room End date not applicable

Health Care Spending Account (HCSA) Terms/Grants/GFT are not eligible This benefit is prorated for first year of retirement

i i i C

$96.00 per year

Early Retirement Allowance - Lump sum Formula: $49,013.00 * 0.006 * 22.0000 * 5.0000 As per Policy 53 or your Collective Agreement; http://www.hr.uottawa.ca/

$28,000.00 transferable to an RRSP under paragraph 60(j.1) of the Income Tax Act (ITA) $4,348.58 excess retirement allowance, subject to income tax $32,348.58 total retirement allowance

The early retirement allowance has been calculated based on the provision in effect at the time of calculation.

Eligible Medical Expenses as per Canada Revenue Agency http://www.cra-arc.gc.ca/tax/individuals/topics/income-tax/return/completing/deductions/lines300-350/330/allowable-e.html

PLEASE NOTE THAT ALL INSURANCE RATES ARE SUBJECT TO CHANGE AS THE PREMIUMS ARE REVIEWED EVERY YEAR.

Other Benefits available to you: Voluntary Contributions - Lump sum

$1,000.00

The interest rate for the current year has been used to project the value of your voluntary contributions at retirement.

.../2

y• Tuition Fee Exemption: For you, your spouse and your eligible dependents under the age of 26,

until you reach the age of 70 • Use of Libraries • Access to Sports Services • Email account

01 April 2009

Example of Summary

Personal Statement and Annual Report

HR Web Site: www.hr.uottawa.ca/pension

Fact Sheet Series

Financial Planner

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UNIVERSITY OF OTTAWA PENSION PLAN SUPPORT STAFF