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MAJOR
FEATURES OF THE P.E.I.
TEACHERS' SUPERANNUATION ACT |
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1.
ADMINISTRATION
The Act is administered by a
Superannuation Commission comprised of three persons from the
Department of Education, one of whom is to be chairperson, three
teachers appointed by the P.E.I.T.F. and one person from the
Department of Finance.
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2.
CONTRIBUTIONS
All teachers
under contract contribute to the Teachers’ Superannuation Fund (T.S.F.)
and the Canada Pension Plan (C.P.P.). The contribution rates are
as follows:
A. On the portion of the salary that represents the basic
exemption under the
Canada Pension Plan, 9% to the TSF (the basic exemption for
the CPP is
presently $3,500).
B. On the portion of the salary that exceeds
the basic exemption up to the
amount of the year’s maximum pensionable earnings (YMPE),
4.95% to the
CPP and 7.2% to the TSF (for 2008, the YMPE is $44,900.).
C. On the portion of the salary that exceeds
the YMPE, 9% to the TSF.
Note: The maximum contribution to the CPP in 2008 is
$2,049.30.
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3.
SUPERANNUATION FUND
Teachers'
contributions, less their C.P.P. contributions, are placed in
the Teachers’ Superannuation Fund (T.S.F.). Prior to July 1,
1988, the fund was invested only in guaranteed debentures. On
that date, the fund was turned over to professional money
management firms and the fund may now be invested in equities,
mortgages, bonds, debentures, etc. subject to the investment
policy of the PEI Government. Returns from these investments are
placed back in the fund. The fund is audited yearly and
currently amounts to $476.5 million as of June 30, 2006.
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4.
ELIGIBILITY FOR PENSION
a. Regular Service Pension - A
teacher who is age 60 or more and has 5
or more years of service is eligible for a pension upon
ceasing to teach
and upon application.
b. Early Service Pension - A teacher who has 35 years
of service or a
teacher who is age 55 or more and has 30 or more years of
service is
eligible for a pension upon ceasing to teach and upon
application.
c. Disability Pension - A teacher who has 5 or more
years of service
and who ceases to teach because he/she is totally and permanently
disabled is eligible for a pension upon application. The
definition of
disability is as follows:
"totally and permanently disabled" means, in
relation to an individual,
suffering from a physical or mental impairment that prevents
the
individual from engaging in any employment for which the
individual is
reasonably suited by virtue of the individual’s education,
training or
experience, and that can reasonably be expected to last for
the
remainder of the individual’s practical working life.
d. At or between age 55 and 60 with at least 5 years of
service but less
than 30 years with a penalty.
The penalty is the lesser of:
(a) one quarter per cent for each full month between the date of
actual
retirement and the date the person reaches the age of
sixty years;
or
(b) one quarter per cent for each full
month between the date of actual
retirement and the date the person would reach thirty
years of
service
from the pension that would otherwise be calculated if the
person were age 60.
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5. PENSION CALCULATION
Years of Service X 2% X Average
of 5 years of highest salary.
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6.
INTEGRATION WITH C.P.P.
The Teachers’ Superannuation Act (T.S.A.) is
integrated with the Canada Pension Plan (CPP). This results in a
reduction in the pension payable by the TSA. The age of
integration is 65. The formula for integration reads as follows
in section 22(1) of the Act:
Where a person receiving a pension under this
Act reaches the age of sixty-five years, the pension payable
under this Act shall be reduced by 0.7% of the person’s average
salary rate for the highest five years of salary, for each year
of service after July 1, 1972, and that reduction shall be
computed only on that part of the person’s salary which
constitutes the "Year’s Maximum Pensionable Earnings" as defined
in the Canada Pension Plan.
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7.
REFUNDS
Any teacher who leaves
teaching is eligible to receive a refund of contributions plus
interest of 4% on these contributions.
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8.
SURVIVOR'S BENEFITS
If a teacher who
has five or more years of service or a teacher who is on pension
dies, the teacher's spouse is entitled to 60% of the pension for
which the teacher was eligible or which the teacher was
receiving. Each child under 16 will receive 10% of the pension
up to a maximum of 3 children. This allowance will continue up
to age 25 if the child is in attendance at a post secondary
education institution.
As a result of an amendment to the Act in the
spring of 1987, a teacher's surviving spouse shall continue
to receive the survivor's benefits in the event of
remarriage.
If a teacher who has fewer than 5 years of
service dies, the teacher's estate receives a refund of
contributions and interest thereon.
If a teacher who has five or more years of
service or a teacher who is on pension dies leaving no spouse
but having dependent children, then 60% of the pension for which
the teacher was eligible or which the retired teacher was
receiving will be paid to the dependent children.
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9. EMPLOYER CONTRIBUTIONS TO THE
FUND
Employers contribute to the Superannuation Fund by matching
the
contributions paid by teachers. The Employers have matched
teachers'
contributions since September, 1979.
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10. ESCALATION
All pensions
including deferred pensions, are increased on July 1 of each
year. This increase is based on the increase in the CPI for
Canada for the previous year. The increase will be 60% of the
CPI, to a maximum of 4%.
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11. MINIMUM PENSION
The minimum pension payable under
the Act is calculated by multiplying $100. per year of service
by the number of years of service to a maximum of 35 years.
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Inquiries re pension should be made to
Michel Plamondon, Federation House, telephone 569-4157 or toll
free 1-800-903-4157.
Revised
January 17, 2008
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