Changes to the College Pension Plan

Changes to the College Pension Plan

Update, January 13, 2015

After further research with the College Pension Plan and discussions with BCIT, the FSA has determined that BCIT is proceeding in an appropriate way that is compliant with the plan’s requirements.  BCIT will have to review all CPP contributions for 2014.  FSA members in the CPP may get a refund or be required to make additional payments as a result of these adjustments.  We will continue to meet with BCIT to ensure that these adjustments are administered as fairly and reasonably as possible.

BCIT did consider the option of not remitting CPP contributions on PTS earnings for full-time employees.  Had they done so, FSA members would have to pay pension adjustments at the end of every year that they were not fully employed.  Remitting contributions on all PTS contracts allows the CPP to calculate the best salary for the year more reliably and without requiring additional payments from members with lower incomes from part-time employment at BCIT.  This option will result in some PTS salary being deferred (with interest) for FSA members who are otherwise fully employed at BCIT.

Posted, January 7, 2015

Just before Christmas, BCIT announced that it will be changing how it administers College Pension Plan (CPP) contributions on Part-Time Studies (PTS) instructional contracts.  As of January 2015, regular full time BCIT employees, who also hold an Auxiliary contract, will see contributions to the College Pension Plan deducted from their PTS employment income.  If the employee maintains full time regular employment over the course of the year, those contributions will be returned to them.  If the employee has a gap in their full time regular employment in that year, those contributions may be applied to their pensionable service.

PTS contracts are pensionable service, like regular and temporary employment contracts. The CPP does not allow anyone to accrue more than one year of service in any calendar year, so a member doesn’t earn additional service by working PTS contracts on top of a full time position.  When the CPP determines that someone has contributed more than the equivalent of a full time position at their best salary, the plan refunds the excess contributions.  The CPP’s intention is that each plan member’s FTE will reflect the maximum earned service and salary from all sources.  A full time employee’s pension entitlements should not be decreased by taking on additional contracts at a lower rate of pay, but the entitlements (and contributions) may be increased by taking on additional work at a higher rate of pay.

BCIT has had the option not to deduct CPP contributions from additional compensation earned by full time employees.  The CPP did make changes a year ago meant to ensure that the contributions of all plan members reflect their maximum entitlements under the plan.  BCIT’s announcement appears to be an attempt to be compliant with the plan’s requirements.

The FSA is still investigating whether the change was necessary.  The CPP employee contribution rate is between 9.6% and 10.35% (employers contribute slightly more).  If contributions on PTS employment are not required for some members, the change amounts to a forced deferral of 10% of a member’s PTS income.  That’s a big bite for many of our members.  The very short notice from BCIT might make that deferral even harder to manage for some.

We will update this post provide an update here when we have more information.  Members are strongly encouraged to contact the pension corporation for questions about their own account with any pension plan.  Access to your account log in and to advisors with the pension corporation can be found on the College Pension Plan web site.