MUNICIPAL PENSION BOARD OF TRUSTEES
Meeting Highlights
November 28-29, 2012
Victoria, BC
The Meeting Highlights 1 document is a summary of issues that were considered, or decisions
that were made, by the Municipal Pension Board of Trustees (the Board) at their latest board
meeting.
Items of Note
Reports from Service Providers
A.
Plan Administration – Report from the BC Pension Corporation
B.
Plan Investments – Report from the BC Investment Management
Corporation (bcIMC)
Committee Reports
C.
Benefits Committee
D.
Communications and Education Committee
E.
Governance Committee
F.
Investment Committee
G.
Valuation Committee
H.
Appeals Panel
Board policies are posted on the Plan website at www.mpp.pensionsbc.ca; just follow these
links: Plan Governance > Board Governance > Board Policies and Documents.
Items of Note
Brendan Dick will be Chair of the Municipal Pension Board of Trustees for 2013. Richard
Taylor was elected Vice-Chair for 2013 and will be Chair in 2014.
The Board appointed Dennis Blatchford to the bcIMC Board of Directors, effective
January 1, 2013 for a term expiring on December 31, 2015.
Tracy King was appointed Board Officer.
1
Please note that the official Board Minutes record the business conducted by the Municipal Pension Board of
Trustees and their decisions. If there are any discrepancies between the Meeting Highlights and the official Board
Minutes, the official Board Minutes shall govern. Disclosure of any document referred to in the Meeting Highlights
or the official Board Minutes is subject to applicable Board policies.
Meeting Highlights – Winter 2012
Reg. T.M. Municipal Pension Board of Trustees
Page 1 of 6
The Board approved retaining Shawn Hatch as legal counsel. Shawn has established an
independent practice and is no longer with Davis LLP, although he will be able to call on their
expertise if necessary.
The Board approved retaining Aon Hewitt to provide independent investment consulting advice,
effective January 1, 2013 for a renewable period of two years, subject to negotiation of
satisfactory contract terms.
Board Governance
The Board approved the E-Board Policy, which has been posted under Board Policies and
Documents.
Revised policies and documents posted under Board Policies and Documents are:
ƒ Terms of Reference for the Governance Committee
ƒ Trustee Code of Conduct
ƒ Committee Meeting Procedures
ƒ Standing Committee Policy
The Board approved a budget of $1,829,116 for Board operations for fiscal year 2013 and a
budget of $581,484 for Secretariat services for fiscal year 2013.
Meeting with Plan Partners
The Board held its fifth annual meeting with the Municipal Pension Plan Partners and
Appointing Authorities on October 17, 2012 in Vancouver.
COLA for Pensions
The Board approved a Cost of Living Adjustment (COLA) to pensions of 1.2% effective
January 1, 2013. This is the increase in the Consumer Price Index (CPI) between
September 2011 and September 2012. This means that retiree purchasing power will keep pace
with increases in the cost of housing, food, gasoline and other expenses as measured by the
consumer price index.
However, while COLA is pre-funded through member and employer contributions to the
Inflation Adjustment Account, it isn’t guaranteed and we know that we don’t have enough
money to guarantee COLA equal to full inflation forever. At some point we will have to give less
than the full increase in the Consumer Price Index and this is a significant challenge that the
Board is discussing with the Plan Partners.
New Member’s Benefits Statement Format
The Board approved a revised format for the Member’s Benefits Statement that will be used for
members of the Municipal Pension Plan in 2014.
Reports from Service Providers
Administration services are provided by the BC Pension Corporation and investment services are
provided by the BC Investment Management Corporation (bcIMC). Both agents report to the
Board at each regular board meeting.
Meeting Highlights – Winter 2012
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A. Plan Administration – Report from the Pension Corporation
Pension Corporation met all on-time service targets for the period April 1, 2012 to
September 30, 2012. There is increased demand for services as a result of a 20 per cent
increase in the number of active members over the last five years, a 14 per cent year-to-date
increase in the number of new pensions put into pay, rising member service expectations, a
39 per cent increase in the number of employers over the last five years, and a higher level of
sophistication of participating employers. Despite these challenges, client satisfaction levels
remain high and services are being enhanced.
The Corporation is developing an online estimator guide and My Account will be available to
inactive and retired members in 2013.
Total service delivery costs for 2012/13 are forecast to be on target at $29.3 million.
B. Plan Investments – Report from the Investment Management Corporation
As at June 30, 2012, the Plan held assets of $29.2 billion. The year-to-date investment return
for liquid assets for the first two quarters of 2012 was 4.0 per cent, compared to the
benchmark of 3.1 per cent.
The Quarterly Economic Report, Quarterly Responsible Investing Report and an excerpt
from the Quarterly Performance Report are available on the Plan website at
www.mpp.pensionsbc.ca. Select “Plan Governance” and then click the “Investment
Information” button in the Investment Holdings section.
Committee Reports
The Municipal Pension Board has five standing committees: Benefits, Communications &
Education, Governance, Investment, Valuation and an Appeals Panel. The Employer Eligibility
Committee was disbanded effective March 28, 2012.
C. Benefits Committee
The Board approved a cost-of-living adjustment (COLA) of 1.2 per cent effective
January 1, 2013.
The Board approved the following post-retirement group benefit premium rates effective
February 1, 2013 (for deduction from pension payments in January 2013):
Extended Health
Dental
Recommended
2013 Premium
% Change
Recommended
2013 Premium
% Change
Single
$75
-3%
$40
11%
Couple
$150
-3%
$80
11%
Family
$293
-3%
$108
10%
Meeting Highlights – Winter 2012
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The administration service charges for 2013 are as follows:
Dental annual
Dental per month
EHC annual
EHC per month
2012
$16.48
$ 1.37
$49.16
$ 4.10
2013
$17.19
$ 1.43
$49.97
$ 4.16
Change
4.32%
1.65%
In previous years since the introduction of the flat rate (to replace a percentage of claims), the
percentage increases in administration charges were less than the percentage increases in
premiums. This indicated that the flat rate approach was limiting increases in administration
costs. For 2013, the increase in administration charges is more than the recommended
premium increase for EHB, because of claims cost reductions resulting from the BC generic
drug pricing agreement. For Dental, the increase in administration charges is lower than the
increase in premiums. (The charges are adjusted annually on January 1 to reflect the increase
in the consumer price index for Vancouver June over June that last gave rise to an increase,
and a utilization factor reflecting 50% of the change in average claim lines for electronic
claims and 100% of the change for non-electronic claims.)
The Board approved Plan Rule Amendment No. 35, which ensures that an involuntary
transfer is not considered a termination of employment, that the employee’s earnings and
salary prior to transfer will be included in determining the appropriate member contribution
rate after transfer, and that the employee will not lose entitlement to have service recognized.
An involuntary transfer occurs when an employer is merged with or acquired by another
employer.
The Board provided direction to the Pension Corporation with respect to the application of
the Separate Member Approach (SMA) to all employee groups in the Plan. The Plan has
three defined benefit provisions or benefit groups: a 1.3/2.0 per cent pension with a normal
retirement age (NRA) of 65 (Group 1 and 4); a 1.3/2.0 per cent pension with an NRA of 60
(Group 2); and a 1.63/2.33 per cent pension with an NRA of 60 (Group 5). Members may
participate in more than one group either consecutively or concurrently. The SMA is
consistent with principles established by the Board and provisions of the Pension Benefits
Standards Act (PBSA) and Income Tax Act (ITA). The anticipated SMA implementation
date and the effective date of the Plan Rule amendments is expected to be no earlier than
January 1, 2014.
The Board approved various Group 5 and new employer applications.
The Board approved a template notification to employees for use by employers wishing to
withdraw from or modify their participation in the Plan.
The Board approved two requests for employer withdrawals from the Plan. Both employers
had contracted out all union positions under Bill 29 and had not had any employee members
of the Plan since 2004.
Meeting Highlights – Winter 2012
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D. Communications & Education Committee
The Board approved holding the next Annual General Meeting (AGM) on
Thursday, October 17, 2013 at a Victoria venue, with no webcast of the AGM, and an agenda
that includes an Employer & Union Forum with sessions, and a keynote speaker.
The Board approved the tagline “Contributing today for a secure tomorrow.”
The Board approved joining the National Institute on Retirement Security (NIRS) at the
Visionary Level.
The Board approved the E-Board Policy.
Amended Board policy documents will be posted to the plan website within the next few
weeks.
E. Governance Committee
The Board approved amendments to the following policies: Standing Committee Policy;
Committee Meeting Procedures; the Trustee Code of Conduct and the Governance
Committee Terms of Reference.
F. Investment Committee
The Board approved changes to benchmarks for the Canadian Equities asset class and
Canadian Equity pooled funds, effective October 1, 2012, reflecting the discontinuation of
the S&P equity-only indices.
The Board approved participation in the bcIMC Indexed Emerging Markets Equity Fund and
the Morgan Stanley Capital International (MSCI) World Emerging Markets Net Index as the
benchmark for this fund, effective November 29, 2012.
The Board approved participation in the bcIMC Renewable Resource Investment Funds and
the Thematic Public Equity Fund and a 7 per cent nominal return and the Morgan Stanley
Capital International (MSCI) World ex-Canada Net Index, respectively, as the benchmarks
for these funds, effective November 29, 2012.
The Board also approved consequential amendments to the SIPP, which is posted on the plan
website – just follow these links: Plan Governance > Investments.
G. Valuation Committee
Preparations for the next actuarial valuation of the Plan, as at December 31, 2012, are in
progress. The Board will consider the report on the valuation at a special meeting scheduled
for September 23, 2013.
H. Appeals Panel
The Board’s Appeals Panel posts decisions issued by the Panel on the Plan website, with all
information that could identify an individual removed from the written decision. You can
find these decisions at www.mpp.pensionsbc.ca by following these links: Plan Governance>
Board Governance > Appeals.
Meeting Highlights – Winter 2012
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Municipal Pension Trustees also represent the Board on a number of committees with the other
BC public sector pension plans. These include the Interplan Audit and Interplan Trustee
Education committees.
Future Board Meeting Dates
The next regular meeting of the Municipal Pension Board of Trustees will take place
March 25 - 26, 2013 in Victoria.
The following dates have been set for other Board meetings in 2013:
Tuesday and Wednesday June 25-26 – Vancouver
Monday September 23 – Vancouver (Special Meeting)
Wednesday and Thursday November 20-21 – Victoria
The 12th Annual General Meeting (AGM) will be held on Thursday, October 17, 2013 at a
Victoria venue.
Contact us:
By phone
By fax
By email
By mail
250 356 6220
250 356 6245
MPBT@pensionsbc.ca
PO Box 9460
Victoria, BC V8W 9V8
Meeting Highlights – Winter 2012
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