In June, you were notified by York's Pension & Benefits Office that the York University Pension Plan actuary has recommended new mortality tables that may reduce your pension if you are retiring on or after January 1, 2020. The York University Pension Plan text empowers the Plan Actuary (Aon) to recommend mortality tables which are used to convert your money purchase accounts and additional voluntary contribution accounts into your monthly retirement pension. If the mortality experience is improved over a number of years (because Plan members have been living longer), then the actuary may decide that the "conversion" calculation should reflect this by reducing the monthly pension.
Please remember that the York University Pension Plan is a hybrid plan, which means that many members will retire on a minimum guarantee (or
"defined benefit") pension instead of a money purchase pension, depending on which is higher. A minimum guarantee pension is based on a formula reflecting your years of service and best five years of salary and is not affected by mortality assumptions.
In fact, prior to the change in mortality tables, approximately 60% of YUFA members were projected to retire on a minimum guarantee pension. The new mortality tables will yield a less advantageous conversion factor for calculating money purchase pensions, so we can expect that an even greater percentage of members will retire on a minimum guarantee pension, which, for some of us, will now be higher than our projected money purchase pension.
Since this change will have a negative impact on many of our members' pension benefits, YUFA is working through the All University Committee on Pensions (AUCP) and with other employee groups to review the decision of the actuary and possibly to recommend alternatives. The final implementation of this change will be effective for retirements commencing January 1, 2020 and after.
For more information, please email [email protected].