Questions About the COPE 15 & Municipal Pension Plans

Some of our BCNU members have concerns about the move to the Municipal Pension Plan (MPP). Specifically you want to know whether or not you can take money out of the COPE 15 pension plan and use it to purchase back service prior to joining the MPP.

After ratification of your agreement, COPE 378 scheduled meetings with our members in February 2011. As COPE 378's Secretary-Treasurer I attended those meetings on behalf of the union, along with Sharon Saunders. These meetings were for informational purposes.

We met then with our BCNU members to go over the details of the MPP and to explain the pension plan and how it differed from the COPE 15 plan. The presentation given by Sharon Saunders was quite detailed, but it did direct members to the MPP website for any further questions.

One of the main issues that arose in those meetings was about buying back service and whether or not funds in the COPE 15 Pension Plan would be available to fund such a purchase. At the time it was discussed that all of this would be irrelevant if the trustees of the MPP did not accept the employer’s application to have these members accepted into the MPP.

Once that decision was made members would have 90 days to decide whether or not to join the MPP. However, the choice to purchase past service could be done within five years of joining the plan.

The MPP accepted COPE 378 into the plan as of March 7, 2011. However, if your intention is to buy back service you can make contributions to the plan back to January 1, 2011. If you are not going to buy back the service then only the employer contributes for January and February 2011. You start your contributions as of March 2011.

Any questions on paying the amounts owed as your employee contributions to the plan since March 2011 can be answered by the employer. Lynda Hudson will have all the information concerning payment options.

One thing that was heavily emphasized during these meetings - and COPE 378 and the employer have been very clear - members should and must seek out independent financial advice. Each person’s circumstances are different and no two answers will be the same.

The union and the employer cannot sit down independently with each member to help them make any financial decisions. We cannot emphasize enough that each member who has financial questions should seek independent financial advice on these issues.

With respect to the question about removing funds from the COPE 15 Pension Plan, I have reviewed the plan text, met with the trustees, and sought legal advice. Based on all that, it appears that it will take a motion to the trustees of the COPE 15 Pension Plan to allow members to withdraw the funds needed to complete the purchase of service.

The plan will charge each member an administration fee to remove their money from the plan. The exact amount would be up to the trustees of the plan to determine.

Another question that was raised was whether or not the purchase of service would enable a member to be vested. Reviewing the information on the plan’s website (www.mpp.pensionsbc.ca) indicates that this is possible. However, purchasing past service is more expensive when a member is not vested than when a member is vested. The exact cost of that purchase depends on a number of factors and may change as those factors change.

There has also been some mention or rumours of "collapsing" the COPE 15 Pension Plan, that is something that sometimes has to be done to facilitate the transfer of money in a purchase of service scenario. This means that you need to transfer all of your funds out of the COPE 15 Pension Plan and collapse your account in that pension plan. This is only if you intend to purchase past service.

If you choose to not purchase service, and wish to leave your money in the COPE 15 Pension Plan, you may do so as a “terminated vested” member. When you retire, you will be able to convert those funds to an annuity just as any other retiring member can. There is no extra cost to do that. Your funds would continue to grow along with active members’ money and at the same rate.

Most of the remaining questions outlined in the numerous emails are around the design of the MPP, and can be answered by going to the MPP's website: www.mpp.pensionsbc.ca. The Guide for Plan Members was available at the February meetings and contains much of the information that would answer the outstanding questions. There are many publications available on the website that address specific issues in detail and are well worth reviewing.

As well Lynda Hudson, who works at the BCNU the office has sent out some very valuable information and has answered a majority of the MPP questions.

Yours,

Lori Mayhew
COPE 378 Secretary-Treasurer