Board Communique: February 1, 2018
Contribution rates are changing April 1, 2018
As of April 1, 2018, contribution amounts for members and employers are going up one dollar for every $1,000 of salary to strengthen the inflation adjustment account (IAA).
Funded through member and employer contributions and investment income, the IAA is used to provide cost-of-living adjustments (COLAs) to members. In 2014, the plan partners agreed to strengthen the long-term health of this account by requiring IAA contribution increases to be in step with negotiated salary increases in the college sector. For every annual pay increase of one per cent or more, one-twentieth (five per cent) of that increase will go to the IAA as member contributions, with matching employer contributions.
These contribution increases will come into effect April 1 each year negotiated salary increases in the college sector—including any economic stability dividend (determined each November)—are one per cent or more. Yearly increases will continue until it’s possible to pay full cost-of-living indexing on a sustainable basis. COLAs are not guaranteed; however, once granted, they become part of the guaranteed lifetime pension benefit.
Based on wage increases in the college sector in 2018 totalling 1.90 per cent, contribution rates (rounded up to the nearest hundredth of a per cent) for all members and employers will increase by 0.10 per cent—or one dollar per $1,000 of salary—starting April 1, 2018.
Contribution rates effective April 1, 2018, as a percentage of salary
|Rates as of April 1, 2017 (%)||Rates effective April 1, 2018 (%)||Rates as of April 1, 2017 (%)||Rates effective April 1, 2018 (%)|
What you need to do
No action is required.
Please review your payroll and make the necessary changes to ensure contributions follow the plan rules. An article about the contribution rate change will be included in the March Employer Newsletter.
April 1, 2018, contribution increase
$1 per $1,000 of salary
For example: if your salary was $50,000 per year, your annual contribution would increase by $50