SPECIAL PENSION STATEMENT as at DECEMBER 31, 2013
As 2013 was the last calendar year that pension was based solely on your "highest 5-year" average salary, it is important to review your 2013 special statement for reasonableness. To facilitate your review, the back of your 2013 special statement shows the year-by-year pensionable earnings that were used to calculate your "highest 5-year" average salary.
The following information will assist you in assessing the reasonableness of your pensionable earnings by:
- detailing the various types of earnings which must be adjusted for pension purposes,
- describing how you can use your collective agreement as a tool to determine if your pensionable earnings are reasonable, and
- demonstrating how various adjustments are handled.
Please bear in mind that for the majority of members, the highest five years will be the five years leading up to December 31, 2013. However, there may be circumstances which cause one of your highest five years to be prior to the five years leading up to December 31, 2013 (e.g. movement into and out of consultant or administration positions).
Because of the prevalence of the following adjustments, variances between actual pay and pensionable earnings are normal:
- For years in which you taught less than a full year (e.g. part-time or partial years of board approved leave), your earnings are annualized (i.e. converted to what you would have earned had you taught full-time for the entire year).
- Substitute earnings are non-pensionable earnings. When your "highest 5-year" average salary is calculated, substitute earnings are excluded and only your regular earnings are used.
EXERCISE TO DETERMINE IF THE YEAR-BY-YEAR EARNINGS ON THE BACK OF YOUR SPECIAL STATEMENT ARE REASONABLE
Complete the following exercise for each school year reported on the back of your statement:
- Look up your salary in effect at September 1st per the PEI Teachers' Federation Memorandum of Agreement. ADD to your annual salary, any applicable allowances in effect at the same date.
- Look up your salary in effect at June 30th per the PEI Teachers' Federation Memorandum of Agreement. ADD to your annual salary, any applicable allowances in effect at the same date.
- Compare the results from steps 1 and step 2 with the annualized pensionable earnings shown on the back of your 2013 special statement. These annualized pensionable earnings should fall between the values from steps 1 and 2. If not, please complete a Statement Correction Form and submit to Pensions & Benefits.
- Return to step 1 and complete the process for each year. Once you're completed steps 1 through 3 for each year, you've checked your earnings used to calculate your "highest 5-year" average salary.
TO VERIFY THAT THE AVERAGE SALARY GIVEN ON THE FRONT OF YOUR SPECIAL PENSION STATEMENT, CONTINUE ON TO STEPS 5 AND 6
- Add together all weighted pensionable earnings taken from your special statement. Divide the total of all 6 columns by 5.
- Compare your average salary from step 5 with that on the front of your 2013 special statement.
CLICK HERE FOR AN EXAMPLE OF THE ABOVE EXERCISE.