Governance Policies & Documents

The following are important policies and documents pertaining to the governance of the Staff Pension Plan.

Plan Text

The Plan Text outlines the provisions of the Staff Pension Plan as regulated by the B.C. Pension Benefits Standards Act and the Income Tax Act.

Terms of Reference and Governance Policy

The Terms of Reference and Governance Policy outlines the obligations and duties of the SPP Board, the University Administration, UBC Board and Governors, and affiliated parties in the governance of the Plan. The Governance Policy together with the Plan Text and the Statement of Investment Policies and Procedures for the Plan govern the activities of the SPP Board.

Statement of Investment Policies and Procedures (SIPP)

The SIPP defines the governance structure for the SPP Fund and formulates investment principles, guidelines and monitoring procedures to manage the assets of the Fund in accordance with the B.C. Pension Benefits Standards Act. This Policy is supplementary to the rules contained in the PBSA.

Quarterly Reports for UBC Board of Governors

Since late 2011, the SPP Board has been presenting quarterly reports to the UBC Board of Governors. These reports are required to be submitted on a quarterly basis as outlined under the UBC Staff Pension Plan – Pension Board Terms of Reference and Governance Policy. The purpose of these reports is to provide the Committee with an update on key changes to the Plan. The following are quarterly reports which have been presented to the UBC Board of Governors:

Plan Funding Policy

The Staff Pension Plan’s Funding Policy specifies the basis on which the Plan will meet its obligations to pay benefits to members. It is documented in Article 13 of the Plan Text.

The Funding Policy has the following elements:

  • It first of all reflects the nature of the Plan – that members and the University make contributions to the Plan on the basis of a fixed percentage of pay.
  • It also reflects the fact that all the assets in the Plan belong to Plan members.
  • It recognizes the target benefit under the Plan – that each member would earn a fixed percentage of pay for each year of pensionable service, with payments commencing at age 65.
  • It is built upon a simple principle – that whatever benefits the Plan pays today should be affordable for the foreseeable future, and it specifies that this assessment will be made on a 25-year projection using assumptions that meet the guidelines given.

The key to the Funding Policy is the Benefits/Funding Test. This Test compares the “Funds Available” to the “Funds Required”, where:

  • the “Funds Available” is the value today of the current assets plus expected future contributions over the next 25 years; and
  • the “Funds Required” is the value today of all benefits earned to date plus those expected to be earned over the next 25 years, plus a margin for safety.

The Funding Policy states that if the “Funds Available” are greater than the “Funds Required”, at a specified benefit level, then that benefit can be paid from the Plan. If benefits are fully funded and also fully indexed to inflation, then a reserve is built up. If the reserve exceeds the maximum that can be held in a registered pension plan according to the Income Tax Act, then the excess is payable to members.

On the other hand, if the “Funds Available” are less than the “Funds Required,” then the benefit must be reduced until this balance is restored. This is the case today, where the indexing on Plan benefits must be reduced to 50% of inflation. In such case, the Funding Policy specifies that the funded status of the Plan must be assessed annually. It is possible that a further change could be made as a result of these annual reviews – whether to further reduce indexing or to increase it back towards 100% of inflation. In any event, the Funding Policy requires that a full actuarial valuation be performed at least once every three years, at which time the Benefits/Funding Test is revisited and the results applied in the ensuing years.