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    • 24 SEP 20
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    Changes Proposed to Municipal Pension Plan

    Changes Proposed to Municipal Pension Plan

    Michael Conlon, FSA Executive Director
    Michael Thompson, FSA Labour Relations Rep

    For FSA Members in the Municipal Pension Plan

    We are informing you about important proposed changes that are taking place in the Municipal Pension Plan (MPP) of which some FSA members are members. The FSA has agreed to pass on this information as a service to our members but we are not taking an official position on these changes.

    We have agreed to act as a conduit of information and to provide feedback to the plan partners, so if you have feedback or questions please feel free email us at fsa@bcit.ca. However, if you require specific information about how the proposed changes to the MPP will affect you personally – we advise you to consult with your financial advisor or contact the plan directly.


    • A vote of trustees in Spring 2021 will set these changes in motion.
    • The proposed effective date is January 1, 2022.
    • None of the proposed changes will affect any benefits members have already earned.
    • The biggest change is a higher lifetime pension, partially offset by changes to early retirement.

    What You Need to Know

    MPP redesign logoThe Municipal Pension Plan (MPP) changes have been proposed by the plan partners, comprised of both unions and employers. BCITFSA members are represented on the pension board by the Council of Joint Organizations & Unions (COJOU), which is a collection of smaller unions in the pension plan. There are currently 300,000 members in the plan, largely in the public and municipal sector.

    The most important proposed change is the elimination of the option for unreduced early retirement from the age of 55 to 59. Under the current plan, members who have a combination of age and years of service totaling 90 can retire with no reduction of their pension benefit. Approximately 1/3 of plan members access the plan but the cost of the early retirement benefit is subsidized by the whole plan.

    In exchange for the savings realized by eliminating this option, the plan will redistribute benefits in the form of a small reduction in the contribution rates for both employees and employers. Under the current formula, contributions for employees are 8.5% prior to Yearly Maximum Pensionable Earnings (YMPE) – $58,700 – and 10% above that income level. If the changes are adopted, contribution rates for employees would a flat rate of 8.61%. For those at the higher income level (i.e. over $80,000), the changes will result in a decreased overall pension premium. The current accrual formula is 1.3% of income below the YMPE and 2% above the YMPE. Under the proposed changes the accrual rate would move to a flat 1.9%. The effect of these changes would be to increase the lifetime pension for all members but the changes will be particularly beneficial for members earning less than YMPE of $58,700.

    Get More Information

    A more detailed explanation of the changes can be found online. The website also has a calculator tool that will allow you to see how the changes could affect your pension. A call centre has also been established to answer any questions you may have; the call centre can be reached at 1.877.251.0997.

    What Happens Next?

    At this point the MPP trustees are collecting feedback and there will be a vote of trustees in spring 2021. If approved, the changes would be effective on January 1, 2022. At this time there is no plan for a vote of individual members.

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