Effective January 1, 2015, pension benefits for the Plan will be calculated under a new methodology. The new methodology will use the YMPE for each partial year included in the pension benefit calculation based on a proration of credited service for that same year. The new YMPE methodology will be applied on a prospective (go-forward) basis for all retirement, termination or death benefits starting January 1, 2015.
The new YMPE methodology will also apply on a prospective basis, effective January 1, 2015, to all retirees currently in receipt of a monthly pension and who commenced receiving a monthly pension after December 31, 2006. Similarly, beneficiaries who are in receipt of a monthly pension on January 1, 2015 will also have the new methodology applied to their monthly pension as of January 1, 2015 if the original plan member retired after December 31, 2006 or if the original plan member was an employee who died after December 31, 2006. Any incremental change in pension benefits that may occur as a result of the application of the new YMPE methodology will be further increased by the cost of living adjustment percentages received by the retiree or beneficiary.
There will be no retroactive payments made for any period of time prior to January 1, 2015 and the new YMPE methodology will only apply to those who commenced receiving a monthly pension after December 31, 2006.
Implementation of the new YMPE methodology will occur in 2 phases, as follows:
Retirements, terminations or death effective January 1, 2015, or later
Pension benefits will be estimated and processed based on the old YMPE methodology for retirements, terminations or death with an effective date of January 1, 2015 or later. Once the new YMPE methodology is programmed, pension benefits will be recalculated and adjusted as required. It is expected that programming changes and any corresponding pension benefit changes will be made in summer 2015.
For members who have elected a monthly pension, pension benefits will be recalculated on the basis of the new YMPE methodology and any corresponding increase will be paid accordingly, with any retroactive payments being made as necessary, to the date of retirement in 2015.
Members electing to take the commuted value lump sum payment option will receive an adjustment to their lump sum payments, if applicable, once the commuted value under the new methodology has been calculated.
The difference in YMPE methodologies results in a relatively small difference to pension benefits, and in many cases there is no change to the pension benefit.
Calculations and adjustments for retirees and beneficiaries
You may be eligible to receive revised pension benefits resulting from the implementation of the YMPE calculation change if you are a Plan member currently in receipt of monthly pension benefits and began receiving your monthly pension after December 31, 2006.
It is currently anticipated that these programming changes will be implemented by the end of 2015. Corresponding pension benefit changes will be processed at that time and will be paid retroactive to January 1, 2015.
As implementation timelines are finalized, additional information will be communicated.
If you have any questions regarding the implementation of the new YMPE methodology, visit the YMPE FAQs or contact: