The UBC Staff Pension Plan (SPP) is a Target Benefit Plan. Your pension, at retirement, is based on your pensionable service and your best average earnings (salary). The Plan is financed by fixed contributions made by you and UBC. The Plan may be amended from time to time to keep the benefits in line with the Plan’s ability to pay for them.
What makes the UBC SPP a Target Benefit Plan?
A key feature of the UBC SPP’s design is the pension promise and its funding policy. As both employee and employer contributions to the Plan are fixed, the Plan’s funding policy states that the basic pension benefit and inflation adjustments (indexing) are subject to the Plan’s ability to pay. Benefits are adjusted depending on whether the Plan is over- or underfunded.
How is it determined if the Plan is over- or underfunded?
It is based on the results of an actuarial valuation. An actuarial valuation is a financial check-up of the Plan performed every three years by an actuary that determines the funded position of the Plan. The Plan’s liabilities are measured and funded on a realistic and sustainable long term going concern basis that assumes the Plan will continue indefinitely into the future.
The SPP Funding Policy
The Funding Policy is the framework used by the SPP Board to manage the risks inherent in a Target Benefit Plan. The Funding Policy provides guidance and rules regarding decisions that must, or may be made by the SPP Board around the pension benefits provided under the Plan. The SPP Board’s first priority is to provide stable lifetime retirement pensions, followed by the second priority of providing cost-of-living adjustments. Cost-of-living adjustments are the first lever to be used to restore balance and to keep the Plan sustainable.
A copy of the Funding Policy is available on our Governance Policies and Documents page.
Potential Changes in Plan Benefits
The University cost commitment to the Staff Pension Plan is a fixed percentage of earnings. The Plan has a written Funding Policy as part of the Plan text that calls for the Plan’s actuary to perform certain funding tests and for the Pension Board to take appropriate action if the Plan’s funding level falls outside certain limits. Where the Benefits/Funding Test shows that the funding is insufficient or more than sufficient, the Pension Board must follow certain steps to restore the balance, with future indexing being the first item to be addressed.
Cost of Living Adjustments
We use inflation protection as a lever to keep the Plan sustainable. Learn more about cost of living adjustments.