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Thirty-ninth Annual Report of the Business Done in Pursuance of the Pension (Teachers) Act formerly Teachers'… British Columbia. Legislative Assembly [1983]

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 PROVINCE OF BRITISH COLUMBIA
Thirty-ninth Annual Report
of the Business Done in Pursuance of the
Pension (Teachers) Act
formerly
Teachers' Pensions Act
YEAR ENDED DECEMBER 31
1979
ISSN 0703-01 OX
  May it please Your Honour:
The undersigned respectfully submits the Report of the business done in pursuance of
the Pension (Teachers) Act during the fiscal year ended December 31, 1979.
EVAN M. WOLFE
Provincial Secretary and
Minister of Government Services
Office of the Provincial Secretary and
Minister of Government Services
Victoria, British Columbia
January 15, 1981
 The Honourable Evan M. Wol
Provincial Secretary and
Minister of Government Servic
Victoria, British Columbia.
I have the honour to lay before you the Report of the business done in pursuance of the
Pension (Teachers) Act during the fiscal year ended December 31, 1979.
Respectfully submitted,
January 15, 1981
 PENSION (TEACHERS) ACT
ANNUAL REPORT
Report of the business done in pursuance of the
Pension (Teachers) Act during the fiscal year ended
December 31, 1979
Section 4 - Cost of living supplements totalling $ 10,678,472 paid during the year were
| charged to Pension Account. Financing of these supplements by additional employee and
I employer contributions, each at the rate of '/i% of salary, commenced May 1, 1976. The
n provides for a further similar increase in contributions when the accumulated
| payments again exceed 1% of the average annual total of contributory salaries. This 1% of
te of additional contributions commenced April 1, 1978. Significant amendments
| to the provisions for the payment and financing of cost-of-living supplements, as described
I below, were enacted during the 1980 session of the Legislative Assembly.
is 6, 7 and 10 - Contributions received from teachers totalled $40,874,490
| made up as follows:
$
tributions    . ,L±  33,783,989
;s contributions      6,477,382
38,494
Repayment of refunds for reinstatement  _.,...._ ■.„__..* 135,392
Contributions for approved periods of leave of absence  „«. 232,429
Contributions for approved military or other service   206,804
As at December 31, 1979, there were 41,896 teachers with contributory credits in the
I Fund, made up as follows:
Current contributors
Teachers employed by school districts   30,170
Teachers employed other than by school districts    119
Teachers out of service less than two years WBttM  4,461
Teachers with deferred vested pension rights .„  496
Teachers out of service more than two years   6,650
Section 8(1) - Employer contributions received from the Minister of Finance amounted
I to $40,256,604, made up as follows:
Matching basic and cost of living supplementary $
allowances contributions   jJHftJS   40,049,800
Recognition of service  ^$?Z. :I2:       206,804
^^■JBgw/t 8(3), (4) and (5) - Employer contributions received from the British Columbia
Teachers' Federation and employers other than school districts for 119 teachers on loan,
., amounted to $211,571.
Section 8(7) - The contribution received from the Minister of Finance in respect of the
I deficit in the Employer Reserve Account amounted to $8,450,602.
Section 8(8) - Reimbursement to employers of Canada Pension Plan employer contributions paid by them in respect of employees to whom the Pension (Teachers) Act applies
[ amounted to $5,826,388.
 6 BRITISH COLUMBIA
Sections 11,12,15 andl6(l)-Superannuation allowances w
366 teachers as follows:
Normal rt
1
e granted in respect of I
Total and permanent disability ...
Death in service Jgjjj^L
Deferred      1$*™$.®
For analysis and comparative statistics see Schedules 3, 4 and 5 appended.
Transfers totalling $726,045 were received from 6 reciprocal pension plans in respect I
of 38 contributors upon grant of allowance and in respect of 13 contributors following i
transfer of service as follows:
Upon Grant of Allowance $
College Pension FundHJ**1        	
"c Service Superannuation Fund ...
Province of Alberta Teachers' Pensions Fund  	
Province of Quebec Teachers' Superannuation Fund ...
Province of Saskatchewan Teachers' Pensions Fund ...
2
63,813
112,624
326,332
56,961
73,946
Transfers totalling $1,527,957 were made lo 8 rei. ipiocallro^^M^ffl
contributors upon grant of allowance and in respect of 4 contributors folic
service as follows:
Upon Grant of Allowance
College Pension Fund   „Z..:  11
c Service Superannuation Fund ...
Province of Alberta Teachers' Pensions Fund  6
Province of Manitoba Teachers' Retirement
Allowances Fund „.„.„„**&!<>' 1B <
Province of Ontario Teachers' Superannuation Fund   1
Province of Saskatchewan Teachers' Pensions Fund   2
During Service
Government of Canada Public Service Pension Account 3
Municipal Superannuation Fund  1
92,369
43,827
(1,002)
24,244
Section 14(4) - The matching portion of medical premiums deducted from eligible
recipients of a superannuation allowance was paid by the Mini:
Sections 16(5) and 17- Refunds were granted in respect of 1.
$3,826,349 made up as follows:
| of Fin:
1,397 teachers and totalled   ■
Excess contributions
on grant of allowance        57 7,425
Miscellaneous  .^^H.S         4 245
For analysis and comparative statistics see Schedules 3 and 4 appended.
Section 21 - Actuarial and administrative expenses paid from the Fund amounted to
 PENSION (TEACHERS) ACT - ANNUAL REPORT 7
iection 26 - Securities held by the trustee at December 31, 1979, amounted to
$565,971,638, par value, as set out in Schedule 1 appended. Transactions during the year
(par value) were as follows:
wpfpjplflj
PuichasesftfeSBBlIMP   71,400,338
Redemptions  </JKSk.     1,569,600
Sales   .IpiilifHgH*.    2,677,000
The average yield on securities purchased during the year was 10.407% based on the
:an of the opening and closing balances amounting to $569,379,154, the net rate of
erest earned during the year was 8.8703% after deducting losses realized on sale of
'estments $473,459 and administration expenses $409,724. It is anticipated the losses
swill be recovered through future increased interest earnings.
Section 29 - An actuarial valuation of the assets and liabilities of the Fund is required to
I be made by an actuary from time to time at intervals of not more than five years. The most
| recent valuation was carried out as at December 31, 1977.
The valuation indicated an unfunded liability in respect of basic pension benefits of
approximately $547,600,000 as of December 31,1977. While this represents an increase of
I $79,600,000 since December 31,1974, the report stated that the Plan's "funded ratio" has
I improved. The actuary has made recommendations to raise the statutory contribution rates
and to improve the financing of the supplementary allowances. Statutory amendments were
[enacted in 1980 as described below.
Section 37 - During the year the Teachers' Pensions Board held 1 meeting at which it
■dealt with some 7 cases in accordance with Board policies. Applications considered related
contributions for periods of leave of absence and to disability allowances.
LEGISLATION
The Pension (Teachers) Act was amended at the 1980 session of the Legislative
■Assembly. Among the more important changes are the following:
(1) Dividing the Fund into basic and inflation adjustment accounts.
(2) Discontinuing automatic quarterly indexing of the lifetime portion of pensions
after January 1, 1981, and substituting annual indexing of the lifetime portion
each January 1 not to exceed:
(a) the percentage increase in the consumer price index over the 12 months
ending on the immediately preceding September 30, or
(b) in total an amount that has a capitalized value equal to the amount in the
inflation adjustment account on the preceding September 30.
(3) Increasing employee contributions by 0.5% of salary to 7.5% less 1.5% of salary
up to the year's maximum pensionable earnings under the Canada Pension Plan
effective October 1,1980, with a further increase of 0.1 % of salary effective July
1, 1981.
(4) Increasing employer contributions by 3.2% (plus 0.1% effective July 1, 1981) to
10.2% (10.3%) of salary less 1.5% of salary up to the year's maximum pensionable earnings under the Canada Pension Plan.
(5) Allocation of employee and employer contributions each amounting to 1% of
salary to the Inflation Adjustment Account.
 BRITISH COLUMBIA
(6) Providing for a percentage increase, according to the year of grant, in pension
allowances granted in the period July 1, 1961 through June 30, 1973.
(7) Providing for a recalculation of pension allowances which were based upon a
highest average salary restricted by a salary ceiling for pension purposes imposed j
in respect of service prior to June 30, 1971.
(8) Providing that for purposes of determining eligibility for a pension allowance
every month in which the employee has pensionable service shall be counted as
one month's service.
(9) Providing that a person shall be eligible for a pension allowance where the
combined pensionable service with an empj^Sjlunder this Act and with an
approved employer is not less than 10 years.
(10) Authorizing payment of interest on all refunded contribu^BSnd permitting the
Lieutenant Governor in Council to adjust the rate of interest.
 PENSION (TEACHERS) ACT - ANNUAL REP<
TEACHERS' PENSIONS FUND
Employee and e
employer n
LIABILITY AND FUND BALANCE
Fund Balance (Exh
C. WEBSTER, C.A
AUDITOR'S REPORT
December 1979 and the statement of changes in fund balance fo:
as made in accordance with generally accepted auditing Stan
its and other procedures as I considered necessary in the ci
I have relied upon information furnished by the Fund's Consulting Actuary as to the accure
5te 1 to the financial statements.
In my opinion, these financial statements present fairly the financial position of the Fund as
I December 1979 and the changes in its fund balance for the year then ended in accordance
I generally accepted accounting principles applied on a basis consistent with that of the preceding;
 BRITISH COLUMBIA
TEACHERS' PENSIONS FUND
Fund Balance Increased By:
.382 5,070,607
Paid by the Province of British Colt
Basic	
Cost of living supplementary al
33,572,418 30,979,836   |
6,477,382 5,070,607   ]
206,804 305,628
Deficit in Employer Reserve Ace
Losses on sale of investments (Note 2) ._...
Fund Balance Decreased By:
Contributory	
Cost of living supplements	
Reimbursement to employers of Canada Pe
Net Increase in Fund Balance 	
Fund Balance at Beginning of Year
Fund Balance at End of Year (Exhibit
726,045
(473,459)
WW
1
37,174
189
3,826
349
1,527
957
5,826
388
409
724
48,764
607
90,525
184
528,341
863
618,867
047
(1,798,566) i
123,814,266
1,104,969
5,203,343
 PENSION (TEACHERS) ACT - ANNUAL REPORT 11
TEACHERS' PENSIONS FUND
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1979
h. Actuarial Valuation
According to the Pension (Teachers) Act, an actuarial valuation of the assets and liabilities of the
Fund is required to be made by an Actuary from time to time at intervals of not more than five years.
The most recent valuation was carried out as at December 31, 1977.
The valuation indicated an unfunded liability in respect of basic pension benefits of approximately $547,600,000 as of December 31, 1977. While this represents an increase of $79,600,000 since
December 31, 1974, the report stated that the Plan's "funded ratio" has improved. The Actuary has
made recommendations to raise the statutory contribution rates and to improve the financing of the
supplementary allowances. Statutory amendment as described in Note 4 is being considered by the
Legislature.
The unfunded liability reflects, in part, a deficit in the amount available for the payment of
pensions in force as at December 31,1977, when compared with the present value of the pensions as at
that date. In this connection, an amount of $15,000,000 (1978 - $15,278,379) was transferred to the
Pensions Account from the Employer Reserve Account. This resulted in a deficit of $8,450,602 in the
Employer Reserve Account, which is recoverable from the Province of British Columbia and is shown
as an account receivable on the statement of financial position.
|b Investments, ^\',
Investme
Book Value  «9«S!Sr.    560,757,075 494,097,082
Par Value IBBBH     565,971,638 498,817,900
Market Value           446,645,271 443,359,953
The difference between the book value and market value of the investments is not considered to
i permanent reduction of the Fund balance available for payment of pension benefits and therefore
not been provided for as at December 31, 1979.
During the year, certain investments were disposed of in order to improve the yield to the Fund,
jlting in book losses aggregating $473,459. It is anticipated that future increased interest earnings
n reinvestment will more than offset these losses.
Cost of Living Supplementary Allowances
Payment of supplementary allowances, adjusted quarterly in relation to the cost of living index,
nmenced July 1, 1975. Financing of supplements by additional teacher and employer contribu-
is, each at the rate of 'A% of salary, commenced on May 1, 1976. Effective April 1, 1978, these
incing pension supplements in accordance with the statute.
4. Subsequent Event
A Bill to amend the Pension (Teachers) Act has received first reading at the 1980 session of the
slature. The signiffl^Marovisions. which are intended to improve the funding of the basic
ion benefits and the supplementary allowances, if enacted, will provide for -
1. An increase of 0.5% in contributions by teachers.
2. An increase of 3.2% in contributions by government on behalf of school districts.
3. Contributions by government to reimburse the fund for the amounts reimbursed to school
districts for payments made to the Canada Pension Plan in respect of teachers to whom the Act
applies.
4. Annua], rather than quarterly, cost of living supplementary allowances, payable to the extent
created for the purpose.
 BRITISH COLUMBIA
5. Additional Information
These financial statements show only the position c
anges in Fund balance for the year then ended and do no
;et the obligations of the pension plan.
 PENSION (TEACHERS) ACT - ANNUAL REPORT
TEACHERS' PENSIONS FUND
Schedule No 1
Province of British
!|?
:„rra
nty
B'CASu,ton',DSe
nets Cap
talFinanc
ng
icts Cap
talFinanc
ng
:;;;:-
BeChHosp7Jlm
"oveme
t District
Greater Vancouve
r Sewer*
ge and Dr
inage
Greater Vancouve
District Seria
fjf
ge and Dr
nnage
Province of Alberta Guaranty
province of Nova Scotia	
Province of Nova Scotia Guaranty
[Province of Ontario Guaranty
53,000 643,644
2!243^326
56,000 263,721
225,000 217,350
565,971,638   560,757,075   '
 BRITISH COLUMBIA
1
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 PENSION (TEACHERS) ACT - ANNUAL REPORT
g.P.s.g   i.   m 6.1 §1
S BE! I'S
£§§§Sppb§£§1|SssligslS
11111
11 if j-
 BRITISH CI
TEACHERS' PENSIONS FUND
SCHEDULE 4
Sub
divided A
«o«fii«
toSexofContrib
fe£
s
52
HI
Mai.
FfcJ
Male
Female
Male
F,male
Male
FemaIe
M„e
F5ma,e
'I
l
I
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»ft
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I
U
J
 PENSION (TEACHERS) ACT - ANNUAL REPORT                                       17
TEACHERS' PENSIONS FUND
SCHEDULE 5
*.-«.
gS
As"Se
s
Bi
g
«*-.
Under 10yea«	
1
If
I
il
Si
,2$502
AV^OEOPNOR^ALLOW^GMK^DU^Y^
*—                            —        £,             f|               "<*                """               "*"               "~
To^V^NOH^Au^^G^D^cYs*,
2,8             6,524.662            242.655             30,77.824           7.343,69    |      23.234.655
SUBDIV,DEDBVVEARSOFSERV,CEANDA0EATREnREMENT
ill
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56
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5,
60
6,
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63
64
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8
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28
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19
erTfc
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5
44
 BRITISH COLUMBIA
TEACHERS' PENSIONS FUND
Approved and Reciprocal Employers as at December 31, 1
cnewan) applies	
Friti-
hColu
mbiaHydro and Power Authority
r»itvn
:sent value of the allowa
eciprocal employers -
 PENSION (TEACHERS) t
TEACHERS' PI
Approved Long Term Disabi
■British Columbia Teachfrs- FedEration Covering Ti
t   Abbotsford No. 34 July 3, 1973
1    Agassiz-Harrison No. 76 Jan. I, 1977
1     Alberni No. 70 July 3, 1973
CT - ANNUAL REPORT
NSIONS FUND
by Salary Continuance Plans
her 31, 1979
"
New Westminster No. 40	
Peace River North No. 60  	
Peace River South No. 59	
Penticton No. 15	
Powell River No. 47	
Prince George No. 57	
Prince Rupert No. 52	
Princeton No. 17	
Queen Charlotte No. 50 "T
_ Oct. 1, 1978
_ June l', 1977
■ Feb. 1, 1975
  July 3, 1973
_ July 3, 1973
_ July 3, 1973
..... July 3, 1973
_ Feb. 1, 1976
■ July 3, 1973
  July 3, 1973
1   Cariboo-Chilcotin
I Central Okanagan No. 23 July 3, 1973
I Chilliwack No. 33                      ... July 3. 1973
Courtenay No. 71       July 3, 1973
Cowichan No. 65       July 3, 1973
Creston-Kaslo No. 86 July 3, 1973
Shuswap No. 89	
— July 3, 1973
}   Grand Forks No. 12 July 3, 1973
I Greater Victoria No. 61 July 3, 1973
1   Gulf Islands No. 64 June i, 1976
Hope No. 32          July 3, 1973
Howe Sound No. 48 July 3, 1973
Sooke No. 62
South Cariboo No. 30	
_. July 3, 1973
Vancouver No. 39
Administrators	
_ July 3, 1973
  July 3, 1973
_ July 3, 1973
— July 3, 1973
Kettle Valley No. 13 July 3, 1973
1   Kimberley No. 3 July 3, 1973
|   Ladysmith No. 67 July 3. 1973
Lake Cowichan No. 66  July 3, 1973
1-Langley No. 35 July 3, 1973
Lillooet No. 29  July 3, 1973
[   Maple Ridge No. 42 July 3, 1973
Vancouver kland North
Jul   3  1973
Vernon No. 22	
_ July 3, 1973
__ July 3, 1973
Sept. 15, 1978
_ Mar. 24, 1975
June 18, 1976
■ July 29, 1976
... Mar. 5, 1974
1   Nanaimo No. 68 July 3, 1973
Arrow 1 akf* TFArircRS- A«<v-iATTnN
 

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