ICBC PENSION PLAN FOR MANAGEMENT AND ... - COPE 378

COPE 378 / ICBC PENSION PLAN
PLAN SUMMARY
DECEMBER 2011

Contents
Introduction ......................................................................................... 3
Your Pension Plan ................................................................................. 4
Accessing More Information about the Plan .............................................. 5
Membership ......................................................................................... 6
When do I enrol in the Plan? ..................................................................................................................... 6
Can I transfer service or credits from another pension plan? .................................................................. 6
What happens to any prior service I had with this Plan? .......................................................................... 6
Contributions ....................................................................................... 7
Service ................................................................................................ 8
What is pensionable service? .................................................................................................................... 8
Retirement .......................................................................................... 9
What can I do to prepare for retirement? ................................................................................................ 9
When can I retire? ..................................................................................................................................... 9
Early Retirement Date ............................................................................................................................... 9
What if I continue to work past age 65? ................................................................................................... 9
What if I return to work after I retire? ...................................................................................................... 9
When is my pension paid? ........................................................................................................................ 9
Your Pension and the CPP ....................................................................................................................... 10
Retirement at Age 65 or Later ................................................................................................................. 10
How is my pension benefit calculated? ................................................................................................... 10
Early Retirement Pension ..................................................................... 11
How does the bridge benefit work? ........................................................................................................ 11
Early Retirement Reductions ................................................................................................................... 11
Unreduced early retirement pension .................................................................................................................. 11
Reduced early retirement pension ...................................................................................................................... 11
Inflation Protection ............................................................................. 13
How is my pension protected against inflation? ..................................................................................... 13
Disability Benefits ............................................................................... 14
1

What if I become disabled? ..................................................................................................................... 14
Leaving Employment ........................................................................... 15
What are my options? ............................................................................................................................. 15
When does my pension benefit become ‘locked-in’?............................................................................. 15
Transfer to Management ..................................................................... 16
Survivor Benefits ................................................................................ 17
What happens if I die before retirement? .............................................................................................. 17
What happens if I die after retirement? ................................................................................................. 17
Your Pension Plan and Tax ................................................................... 19
Your contributions to the Plan ................................................................................................................ 19
Does membership in the Plan affect my RRSP contribution room? ....................................................... 19
Division of Pension Benefits on Marriage Breakdown ............................... 20
Non-Assignability and Non-Commutability of Benefits .............................. 21
Glossary ............................................................................................ 22
Contact Information ............................................................................ 23
2

Introduction
The COPE 378 / ICBC Pension Plan (the “Plan”) is a jointly trusteed defined benefit pension
plan. It is governed by the joint trust agreement and Agreement in Principle signed in 2001
by the Plan partners, COPE Local 378 and ICBC. As a negotiated cost pension plan, the Plan
partners must agree on the contributions to be made to the Plan. The Plan partners are
also responsible for appointing the Plan’s board of trustees.
The board of trustees is responsible for managing the Plan. The trustees may change Plan
rules if they are directed to do so by the Plan partners. The board of trustees is responsible
for the interpretation of the Plan provisions and administration of the Plan terms.
Board of Trustees
The appointees as of December 2011 are:
Bruce Farmer
Alison Gould
Phil Leong
Lori Mayhew
Yasmin Carroll
Jeff Gillies
Phil Headley
Susan Lucas
Len Posyniak
John Gilfoyle (independent chair)
The purpose of the Plan is to provide lifetime retirement income for the members of the Plan
at a reasonable cost.
This handbook is a summary of the Plan. The information in this handbook provides a
summary of the terms of the Plan at the time of publication. From time to time the Plan
text may be amended by COPE Local 378 and ICBC. If there is any discrepancy between
this information and the Plan text, the Plan text will govern.
Benefits payable from the Plan cannot be assigned.
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Your Pension Plan
The COPE 378 / ICBC Pension Plan is a jointly trusteed defined benefit pension plan funded
by contributions made by Plan members and ICBC, and investment earnings of the Plan.
The Plan provides:
• a guaranteed stream of income for life based on your earnings and years of Plan
membership
• protection against inflation
• survivor benefits
• a contribution waiver during periods of disability
• early retirement options
• a ‘bridge’ benefit when you retire (payable until you reach age 65)
• options on termination of employment
The Plan pays a monthly pension based on a formula. The formula takes into account your
years of service and your earnings.
Plan members and ICBC equally share the cost of the Plan. ICBC provides certain
administrative services to the Plan at no cost.
4

Accessing More Information about the Plan
Internet:
View your pension information online, including your annual member statement, and use
the calculators in My Tools to obtain estimates of your retirement income.
Visit the ICBC Pension Centre at https://www.tractusweb.com/memberportal/ICBC/login.tpz
You will need your ICBC employee ID to register with the site and access your account.
Phone:
Obtain assistance with accessing the website, or ask questions about your estimates or
account.
Call the ICBC Pension Service Centre at 1-866-598-5614. They are available Monday to
Friday from 8:00 a.m. to 5:00 p.m.
For information about other benefit programs at ICBC, contact Employee Benefits at 604-
982-2702 or 604-982-6011.
Mail:
ICBC Pension Service Centre
Suite 900, 550 Burrard Street
Vancouver, BC V6C 3S8
5

Membership
When do I enrol in the Plan?
You have the option to enrol on the first of the month coincident with or next following your
date of hire while a member of COPE Local 378. If you elect not to enrol immediately, you
may enrol on the first of any month prior to completing two years of consecutive
employment service. After completing two years of consecutive employment service, you
will automatically be enrolled in the Plan.
Once you become a member of the Plan you remain a member until you terminate your
employment or retire from ICBC or are no longer a member of COPE Local 378.
If you were a member of the ICBC Pension Plan for Management & Confidential Employees
(the “Management Plan”) and are hired into a COPE Local 378 position at ICBC, you will
automatically be enrolled in this Plan.
Can I transfer service or credits from another pension plan?
No, currently you cannot transfer service or credits from another pension plan. If you move
from a Management Group position at ICBC to a COPE Local 378 position, your pension
benefit will not transfer to this Plan but you will retain your benefit under the Management
Plan.
What happens to any prior service I had with this Plan?
If you previously participated in this Plan and have not started your benefit as a retirement
income or transferred the value out of the Plan, your pensionable service will be combined
to provide one pension benefit.
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Contributions
You and ICBC contribute to the Plan. Your contributions are based on eligible pensionable
earnings.
Eligible pensionable earnings include:
• regular base pay
• eligible shift premiums (afternoon, evening, weekend)
• extended hours premiums
Excluded from pensionable earnings are:
• overtime
• gainsharing payments
• vacation payouts
• any other allowances
Employee and ICBC contribution rates for 2012
7.74% On earnings up to the YMPE of $50,100
10.32% On earnings above the YMPE of $50,100
Both you and ICBC pay lower contributions on earnings up to the year’s maximum
pensionable earnings (YMPE) and higher contributions on earnings over the YMPE. The
YMPE is also the Canada Pension Plan (“CPP”) earnings limit – you and ICBC make CPP
contributions on earnings up to this limit. The COPE Plan contribution rate is lower for
earnings up to this limit because CPP and the COPE Plan are designed to work together to
provide a combined pension benefit at an affordable cost.
Contribution rates may fluctuate from year to year based on the Plan’s financial position and
funding requirements. A valuation is performed at least once every three years to assess
and establish contribution requirements.
The contributions made by employees and ICBC help fund the pensions paid by the Plan.
The benefit you receive from the Plan is based on your earnings and service.
7

Service
What is pensionable service?
Pensionable service is the number of years and months you were making contributions to
the Plan. Your total pensionable service is used to calculate your pension benefit on
termination, death or retirement.
Pensionable service includes periods of time for which:
• you contributed to the Plan and have not had a refund of contributions
• you earned pension while on an approved disability plan
You accrue pensionable service for each day that you contribute to the Plan.
You cannot purchase pensionable service for periods of employment when you were not a
member of the Plan or did not make contributions. You also cannot transfer service from
another pension plan.
8

Retirement
What can I do to prepare for retirement?
• Visit https://www.tractusweb.com/memberportal/ICBC/login.tpz for information on
retirement planning to help you prepare for life after work.
• If you have registered with the ICBC Pension Centre website above, try the pension
calculator tools under My Tools to obtain an estimate of your pension income and
options.
• Visit http://www.servicecanada.gc.ca/eng/isp/common/cricinfo.shtml for information on
the government benefits available.
When can I retire?
The normal retirement date from the Plan is the first of the month following the month in
which you attain at age 65. Many Plan members may wish to retire prior to that date.
Early Retirement Date
You can retire any time once you reach age 55. This means you can begin receiving your
pension benefit from the Plan as early as age 55 regardless of how much pensionable
service you have.
What if I continue to work past age 65?
If you continue to work past age 65 without a break in service, your active membership in
the Plan will continue. However you must start receiving your pension no later than
December 1 st of the year in which you attain age 71. At that time your pension will
commence whether or not you are still working and you will no longer make contributions to
the Plan.
What if I return to work after I retire?
Some Plan members return to work after they have commenced receiving their pension
from the Plan.
If you return to work you will have the option of either re-enrolling in the Plan and
suspending your monthly pension benefit, or waiving your option to enrol in the Plan and
continuing to receive your monthly pension benefit.
If you re-enrol in the Plan you will make contributions and be credited with pensionable
service until the earlier of the following:
• November 30 th in the year in which you attain age 71; or
• the day on which you subsequently retire.
When you subsequently retire, your pensionable service and earnings will be combined to
recalculate your pension benefit.
When is my pension paid?
The pension benefit you receive is paid monthly on the last banking day of the month.
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Your Pension and the CPP
Your pension is designed to work with the Canada Pension Plan (“CPP”) to provide you with
stable, combined retirement income at a reasonable cost.
While you work, you pay lower contribution rates on the portion of your earnings up to the
earnings on which you contribute to the CPP. This reduces the combined cost of your COPE
Plan and CPP contributions.
When you retire, your COPE Plan and CPP pensions provide you with retirement income.
Retirement at Age 65 or Later
The Plan provides a lifetime pension regardless of when you chose to retire.
How is my pension benefit calculated?
Your COPE Plan lifetime benefit from age 65 or later is calculated as:
1.3% x
“best five” earnings up
to the YMPE in year
prior to retirement
x
pensionable service
plus
2.0% x
“best five” earnings
above YMPE in year
prior to retirement
x
pensionable service
equals your COPE Plan lifetime pension benefit from age 65
based on the normal form (prior to any adjustments for
inflation protection)
“best five” earnings - this is the annual average of 60 months during which your earnings
were at their highest. It does not include any overtime pay, vacation payouts or Gainshare
pay.
Your monthly earnings are calculated by dividing your annual reported pensionable earnings
by your total months of pensionable service in the year.
pensionable service - this is the number of years of service you have credited in the Plan.
YMPE – this is the Year’s Maximum Pensionable Earnings for the calendar year prior to your
year of retirement.
normal form – is a pension payable for your life with a minimum of 5 years (60 months) of
payments. When you die, if you have not received the minimum of 5 years of payments the
remaining minimum payments will continue to your beneficiary. Other options are available
to you on retirement and will provide an actuarially equivalent pension benefit. See What
Happens if I Die After Retirement.
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Early Retirement Pension
You can retire early from the Plan if you are 55 years of age or older.
If you retire before age 65, you will also receive a bridge benefit payable until age 65.
How does the bridge benefit work?
This temporary benefit supplements your lifetime pension benefit until age 65 when it is
expected that your CPP pension will take over.
The bridge benefit:
• will not necessarily be the same as your CPP benefit;
• continues to be paid to age 65 even if you commence receiving your CPP benefit
early (from age 60)
The bridge benefit is payable to age 65 and is calculated as follows:
0.7% x
“best five” earnings up
to the YMPE in year
prior to retirement
x
pensionable service
Early Retirement Reductions
There are two types of early retirement pensions: unreduced and reduced.
Unreduced early retirement pension
You qualify for an unreduced pension if you retire and:
• you are 60 years of age or older; or
• your age plus total employment service equals at least 85 (“rule of 85”).
An unreduced pension means that your early retirement pension is calculated without a
reduction.
To determine if you are eligible for an unreduced pension, the Plan considers your
employment service since your latest date of hire plus your age at the time you commence
your pension.
Reduced early retirement pension
If you don’t qualify for an unreduced pension you may still retire early (from age 55 on)
with a reduced pension.
In this case the Plan considers how close you are to age 60, your years of employment
service, and the Rule of 85.
If your employment service is 10 years or greater, the early retirement reduction factor is
3% per year (prorated for partial years).
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If your employment service is less than 10 years, the early retirement reduction factor is
5% per year (prorated for partial years).
The early retirement reduction factor is applied to reflect that it is expected that you will be
receiving the pension benefit for a longer period of time than if you retired at age 60.
Your COPE 378 / ICBC Pension is reduced by the appropriate early retirement reduction
factor above multiplied by the lesser of:
• 60 minus age at which you retire; or
• 85 minus your current age plus employment service.
The reduction factor is prorated for partial years.
For example:
Age at retirement
Employment
service at
retirement
Points toward
Rule of 85
Reduction
57 24 81 9%
58 8 N/A 10%
55 33 88 0%
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Inflation Protection
How is my pension protected against inflation?
Every calendar quarter the pensions in payment from the Plan are adjusted to reflect
changes in the average Consumer Price Index. These adjustments reflect only positive
changes; there is no adjustment down if the average CPI decreases over the measurement
period.
Positive percentage adjustments to pensions will be made equal to the percentage
difference between the average CPI for the quarter ending three months prior to the
adjustment date and the average CPI for the quarter ending six months prior to the
adjustment date.
Should there be a decrease in the average CPI at any time, the pension benefit will remain
the same until such time as the average CPI exceeds the previous high at which the last
increase was calculated.
13

Disability Benefits
What if I become disabled?
If you are totally disabled you continue to earn pensionable service without having to make
contributions to the Plan. As well, the Plan will adjust your annual base earnings to reflect
changes in the Consumer Price Index.
This provision continues until:
• you are no longer considered to be totally disabled;
• you elect to receive a termination benefit;
• you return to work other than under a rehabilitation program sponsored by the long
term disability carrier;
• you reach your normal retirement date;
• you retire; or
• you die.
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Leaving Employment
The reality is that people change jobs during their work life. If you leave ICBC prior to
reaching retirement age, the Plan provides options for your future retirement pension.
What are my options?
If you leave employment and are not yet eligible for a retirement pension (i.e. not age 55 or
older), you will receive an information package from the ICBC Pension Service Centre that
will outline your options. This may include some or all of the options described below.
1. Keep your pension benefit with the COPE Plan as a deferred pension
This gives you a future stream of pension income for life. Your pension benefit is
inflation protected and provides early retirement options and survivor benefits. On
early retirement your benefit is subject to reductions.
If you had more than 10 years of employment service at your date of termination
and were age 50 or greater, the early retirement reduction is 5% for each year that
your pension commences prior to age 60.
If you had less than 10 years of employment service at your date of termination or
were under age 50, the early retirement reduction is 5% for each year that your
pension commences prior to age 65.
2. Transfer your commuted value out of the COPE Plan
The commuted value is the estimated lump sum amount your pension is currently
worth today, based on prescribed actuarial assumptions.
You may choose to transfer your commuted value to:
• a locked-in retirement account (LIRA) – this is done through a lump sum
payment to your financial institution;
• an insurance company to purchase an annuity (providing regular income
payments to you upon retirement); or
• another registered pension plan in Canada that can accept the transfer.
In some cases a portion of the commuted value may be required to be received in
cash, less withholding tax.
3. Elect a cash refund (if your benefit is not locked-in)
If your benefit is not locked-in, you may elect a cash refund of your contributions
plus interest. You may also be able to transfer the cash refund to your RRSP.
When does my pension benefit become ‘locked-in’?
Your pension benefit becomes locked-in once you are vested in the Plan. This occurs when
you have 2 years (24 months) of Plan membership (including Management Plan
membership) or 5 years of employment service. Under BC pension law, a pension benefit
that is locked-in must be used to provide retirement income; it cannot be cashed out.
15

Transfer to Management
If you transfer from a COPE Local 378 position to a Management position at ICBC, you will
automatically be enrolled in the Management Plan and retain your benefit under the COPE
Plan.
16

Survivor Benefits
In the event of your death, the Plan provides options for survivor benefits for your spouse
or beneficiaries.
When you die, survivor benefits are paid according to provisions of both the Plan and the BC
Pension Benefits Standards Act. Your will cannot change the order shown below, but it does
help us to direct any benefit to your beneficiary or estate, if you do not have a spouse.
What happens if I die before retirement?
Relationship to You
1. your eligible spouse is
first in line for survivor
benefits
2. if you do not have an
eligible spouse, or your
spouse has signed a valid
spousal waiver of preretirement
benefits, your
beneficiary on file with
the Plan will be entitled
to survivor benefits
3. if you have no
beneficiary on file with
the Plan
Type of Benefit
Spousal options are:
• Lump sum payment or transfer to a locked-in
RRSP of an amount equivalent to 100% of the
commuted value of the benefit accrued as of
the date of death
• Immediate spousal pension equivalent to the
lifetime pension accrued as of the date of
death payable for your surviving spouse’s life.
This pension benefit is indexed to inflation.
Your named beneficiary will receive a lump sum
payment (minus income tax) of an amount equivalent
to 100% of the commuted value of the benefit
accrued as of the date of death
Your estate will receive a lump sum payment (minus
income tax) of an amount equivalent to 100% of the
commuted value of the benefit accrued as of the date
of death
What happens if I die after retirement?
When you retire you will be required to select an option for pension payment. Any option
you elect will provide a pension payable to you for life. The option you elect will determine
what payments (if any) may continue following your death. Your pension payments will be
adjusted so that they are actuarially equivalent in value to your pension payable in the
normal form (life guaranteed 60 months). You can go to the ICBC Pension Centre website
to estimate the size of your monthly pension under various options.
If you have a spouse when you retire you must elect an option which provides a lifetime
pension to your spouse of at least 60%, unless your spouse elects to waive his or her right.
Pension Option
Life Only
Description
Provides a pension payable for your life. If you die prior to
receiving a total of payments equivalent to your contributions
plus interest, the balance will be paid to your beneficiary.
17

Life Guaranteed
5 Year (60
months)
Normal Form
Life Guaranteed
10 Year (120
months)
Joint and
Survivor Pension
Joint and
Survivor
Reducing to 66%
Joint and
Survivor
Reducing to 60%
Joint and
Survivor
Reducing to 50%
Provides a pension payable for your life. If you die prior to
receiving total of payments equivalent to your contributions plus
interest or at least 60 months of payments, the balance will be
paid to your beneficiary.
Provides a pension payable for your life. If you die prior to
receiving total of payments equivalent to your contributions plus
interest or at least 120 months of payments, the balance will be
paid to your beneficiary.
Provides a pension payable for your life. If you pre-decease your
spouse, your spouse will receive a lifetime pension equivalent to
your pension (without the bridge). If you and your spouse die
prior to receiving a total of payments equivalent to your
contributions plus interest, the balance will be paid to your
beneficiary.
Provides a pension payable for your life. If you pre-decease your
spouse, your spouse will receive a lifetime pension equivalent to
66% of your pension (without the bridge). If you and your
spouse die prior to receiving a total of payments equivalent to
your contributions plus interest, the balance will be paid to your
beneficiary.
Provides a pension payable for your life. If you pre-decease your
spouse, your spouse will receive a lifetime pension equivalent to
60% of your pension (without the bridge). If you and your
spouse die prior to receiving a total of payments equivalent to
your contributions plus interest, the balance will be paid to your
beneficiary.
Provides a pension payable for your life. If you pre-decease your
spouse, your spouse will receive a lifetime pension equivalent to
50% of your pension (without the bridge). If you and your
spouse die prior to receiving a total of payments equivalent to
your contributions plus interest, the balance will be paid to your
beneficiary.
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Your Pension Plan and Tax
Your contributions to the Plan
Your contributions to the Plan lower your taxable income. ICBC reports your contributions
to the Plan to Canada Revenue Agency (CRA) on your T4 slip each year.
Does membership in the Plan affect my RRSP contribution room?
Yes. A pension adjustment (PA) reflects the deemed pension benefit earned you earned in
the year as a member of the Plan. ICBC reports this PA to Canada Revenue Agency (CRA)
in box 52 of your T4 slip.
CRA uses your PA in their formula to calculate your new RRSP contribution room for the
current tax year.
18% x
Previous year’s income
(up to a maximum)
-
Previous year’s PA (up to a
maximum)
After you file your tax return, CRA sends you a Notice of Assessment which includes a
statement of your available RRSP contribution room for the year. You may make an RRSP
contribution up to this amount, or carry it forward, within limits, for use in a future year.
19

Division of Pension Benefits on Marriage
Breakdown
Pension benefits are considered an asset during marriage breakdown.
If, in your separation or divorce agreement, you have agreed to divide your pension benefit,
the Plan provides that your former spouse may be designated as a limited member under
the Plan. Upon being designated as a limited member, your former spouse will not be able
to participate in the Plan, but he/she will have a benefit entitlement available to him/her
when you terminate your employment or first become eligible to retire. Your benefit will be
reduced by your former spouse’s entitlement.
There is a charge of $500 for administration costs to set up your former spouse as a limited
member.
If you are entering into discussions about separation or divorce, please ask your legal
counsel about Division of Pension (Part 6) of the Family Relations Act or contact the ICBC
Pension Service Centre.
20

Non-Assignability and Non-Commutability of
Benefits
In no event shall benefits payable from the Plan confer upon any member, or any other
person, any right or interest which is capable of being surrendered or commuted except as
specifically provided by the Plan.
21

Glossary
“Best Five” Earnings - For years of pensionable service earned prior to 2010, this is the
annual average of 60 months during which your earnings were at their highest. It does not
include any overtime pay, vacation payouts or gainshare pay.
Your monthly earnings are calculated by dividing your annual reported pensionable earnings
by your total months of pensionable service in the year.
Bridge Benefit – A temporary monthly pension benefit payable from the Plan to
supplement retirement income to age 65.
Early Retirement Date – The date when you become eligible to commence your pension
benefit from the Plan regardless of how much service you have. You reach this date when
you are age 55.
Locked-in – Under British Columbia pension law, when your pension benefit is locked-in
you must use it as future retirement income. You cannot cash it out, except in vary rare
cases. Your pension benefit becomes locked-in once you have completed 2 years of Plan
membership.
Maximum Pension – The Income Tax Act limits the amount of pension that can be paid
from a registered pension plan. In 2011, this is $2,552.22 per year of credited service.
Normal Form – is a life pension with a 5 year (60 months) guarantee. Other options are
available to you on retirement and will provide an actuarially equivalent pension benefit.
See What Happens if I Die After Retirement.
Normal Retirement Date – The last day of the month in which you attain age 65.
Pensionable Service – The number of days, months and years you have been a member
of the Plan making contributions, or when you were a Plan member and on an approved
disability claim.
Small Pension Benefit – On retirement, termination or death, if the pension benefit is
sufficiently small based on applicable legislation, the member or surviving spouse may elect
or be required to take a commuted value payout instead of receiving a lifetime pension
benefit.
Spouse – The legal or common-law spouse of the member.
Legal spouse – the person who is legally married to the Plan member and has not
lived apart from the Plan member for more than 2 years
Common-law spouse – the person who has lived together with the Plan member in a
marriage-like relationship continuously for a period of not less than 2 years
Years Maximum Pensionable Earnings – The Canada Pension Plan (CPP) earnings
maximum. In 2012 this maximum is $50,100.
22

Contact Information
Internet:
https://www.tractusweb.com/memberportal/ICBC/login.tpz
Phone:
ICBC Pension Service Centre
1-866-598-5614
available from 8:00 a.m. to 5:00 p.m.
Mail:
ICBC Pension Service Centre
c/o Mercer
Suite 900, 550 Burrard Street
Vancouver, BC V6C 3S8
E-mail:
pension_cope@icbc.com
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