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Twelfth Annual Report of the Business Done in Pursuance of the Pension (College) Act formerly College… British Columbia. Legislative Assembly [1983]

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 PROVINCE OF BRITISH COLUMBIA
Twelfth Annual Report
of the Business Done in Pursuance of the
Pension (College) Act
formerly
College Pension Act
YEAR ENDED AUGUST 31
1980
ISSN 0228-7382
  To the Honourable Henry P. BELL-lRVLNG, D.S.O., O.B.E., E.D.,
Lieutenant-Governor of the Province of British Columbia
IMay it please Your Honour:
The undersigned respectfully submits the Report of the business done in pursuance of
I the Pension (College) Act during the fiscal year ended August 31, 1980.
EVAN M. WOLFE
Provincial Secretary and
Minister of Government Services
I Office of the Provincial Secretary and
WMinister of Government Services
Victoria, British Columbia
{January 15, 1981
 The Honourable Evan M. Wolfe,
Provincial Secretary and
Minister of Government Services,
Victoria, British Columbia
SIR:
I have the honour to lay before you the Report of the business done in pursuance of the
Pension (College) Act during the fiscal year ended August 31, 1980.
Respectfully submitted,
J.D. REID
Superannuation Commissioner
January 15, 1981
 PENSION (COLLEGE) ACT
ANNUAL REPORT
Report of the business done in pursuance of the Pension (College) Act for the fiscal
year ended August 31,1980
Section 3 - All monies received and paid out under the provisions of this Act are shown
in the statement of changes in fund balance and all assets and liabilities are shown in the
! statement of financial position. These financial statements are attached to this report.
Section 5 - During the year 47 eligible employees were, upon application, declared to
be exempt from becoming contributors.
As at August 31, 1980 there were 2,832 active contributors (1,967 male, 865 female).
Section 6 - Employee contributions amounted to $3,495,958 made up as follows:
$
Basic Contributions       3,489,501
Voluntary Contributions ..s§S|S|S"... -  6,457
Section 8 - Employer matching contributions amounted to $3,489,501.
Section 12 (1) - During the year 34 allowances were granted. There were 75
allowances in force as at August 31, 1980.
Section 12 (3) - Three transfers in the amount of $68,509 were received from an
approved employer.
Section 13 - Transfers totalling $1,448,327 were received from 3 reciprocal pension
plans in respect of 25 contributors upon grant of allowance as follows:
$
Teachers'Pensions Fund     1,085,998 re 16 allowances granted
Public Service Superannuation Fund        333,854 re 1 allowances granted
Municipal Superannuation Fund __§&,       28,475 re 2 allowances granted
Transfers totalling $44,302 were made to 4 reciprocal pension plans in respect of 3
employees upon grant of allowance and in respect of 2 contributors, following transfer of
service as follows:
Upon Grant of Allowance - $
Teachers' Pensions Fund   10,114 re 1 allowance granted
Public Service Superannuation Fund   15,495 re 2 allowances granted
During Service -
Government of Canada Public
Service Superannuation Account   17,581 re 1 contributor
Municipal Superannuation Fund        1,112 re 1 contributor
Section 18 - Refunds amounting to $262,612 were granted to 111 employees upon
resignation.
Section 23 - An actuarial valuation of the Fund was carried out as at August 31,1976.
The valuation indicates that the unfunded liability of the Plan is about $12,290,000 as at
August 31,1976. The actuary has recommended that the statutory contribution rates under
the Plan be increased to ensure stable contribution rates in the future. Changes to the Plan, as
I described below, were enacted by the Legislative Assembly in August, 1980.
5
 BRITISH COLUMBIA
Section 24 - Administration expenses paid from the Fund amounted to $21,739.
Section 27 - Investments held by the trustee as at August 31, 1980 amounted to \
$38,199,000 (par value), as set out in the attached Schedule 1. Transactions during the year
(par value) were as follows:
$
Purchases     9,306,000
Sales   _J&        —
Net increase during year     9,306,000
The average yield on investments purchased during the year was 12.125 per cent.
Based on the mean of the Fund opening and closing balances amounting to
$36,996,437 the net rate of interest earned during the year after charging administration
expense was 10.213 per cent.
LEGISLATION
The Pension (College) 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) Providing for a 1 % of salary contribution by both employees and employers to finance
the indexing of the pensions.
(4) Providing that for purposes of determining eligibility for a pension allowance each
month in which a contribution is made shall count as a month of pensionable service.
(5) Providing that a person shall be eligible for a pension allowance where the combined
pensionable service with an employer under this Act and with an approved employer is
not less than 10 years.
(6) Authorizing payment of interest on all refunded contributions and permitting the
Lieutenant Governor in Council to adjust the rate of interest.
J.D. REID
Superannuation Commissioner
 PENSION (COLLEGE) ACT - ANNUAL REPORT
COLLEGE PENSION FUND Exhibit A
STATEMENT OF FINANCIAL POSITION
AS AT AUGUST 31, 1980
ASSETS                                                     1980 1979
$ $
Cash and term deposits  i 4,593,984 3,240,809
Contributions receivable          1,353,867 776,731
Accrued interest on investments             898,560 702,519
Investments in bonds issued or guaranteed by
Canada or a Province (Note 2)        37,758,477 28,492,297
44,604,888 33,212,356
The five accompanying notes are an integral part of these financial statements.
Approved by:
J.D. REID, F.C.I.A.
Superannuation Commissioner, Trustee
C. WEBSTER, C.A.
Comptroller, Superannuation Branch
December 11, 1980
LIABILITY AND FUND BALANCE
Liability
Pensions Payable  3,477 42,316
Fund Balance (Exhibit B)
Employees'Retirement Annuity Account                77,061 68,149
College Pension Fund Basic Account 44,524,350 33,101,891
44,601,411 33,170,040
44.604,888 33,212,356
AUDITOR'S REPORT
To the Superannuation Commissioner, and
To the Provincial Secretary and Minister of Government Services
Province of British Columbia:
I have examined the statement of financial position of the College Pension Fund as at 31 August
1980 and the statement of changes in fund balance for the year then ended. My examination was made
in accordance with generally accepted auditing standards, and accordingly included such teste and
other procedures as I considered necessary in the circumstances.
I have relied upon information furnished by the Fund's Consulting Actuary as to the accuracy of
note 1 to the financial statements.
In my opinion, these financial statements present fairly the financial position of the Fund as at 31
August 1980 and the changes in its fund balance for the year then ended in accordance with generally
accepted accounting principles applied on a basis consistent with that of the preceding year.
Victoria, British Columbia ERMA MORRISON, C.A.
12 December 1980. Auditor General
 BRITISH COLUMBIA
COLLEGE PENSION FUND
STATEMENT OF CHANGES IN FUND BALANCE
FOR THE YEAR ENDED AUGUST 31, 1980
Fund balance increased by:
Contributions -
Employees:
Basic   .	
Voluntary  _-™	
Employer matching contributions .
Transfers from other funds _-...„
Income from investments	
Fund balance decreased by:
Superannuation allowance payments:
Contributory	
Cost of living supplements (Note 3).
Refunds -	
Transfers to other funds   „__	
Medical premium subsidy for pensioners .
Administration expenses	
Net Increase In fund balance	
Fund balance at beginning of year	
Fund balance at end of year (Exhibit A)
Exhibit B
1980
$
1979
$
3,489,501
6,457
3,008,957
10,042
3,495,958
3,018,999
3,489,501
3,008,957
1,516,836
451,362
3,800,316
2,622,542
12,302,611
9,101,860
462,798
75,640
262,193
47,354
538,438
309,547
262,612
188,100
44,302
86,454
4,149
2,385
21,739
18,289
871,240
604,775
11,431,371
8,497,085
33,170,040
24,672,955
44,601,411
33,170,040
 PENSION (COLLEGE) ACT - ANNUAL REPORT 9
COLLEGE PENSION FUND
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1980
1. Actuarial Valuation
According to the Pension (College) Act, actuarial valuations of the Fund shall be made by an
r actuary when requested by the Superannuation Commissioner. The first actuarial valuation of the
Fund was carried out as at August 31,1976. The valuation indicates that the unfunded liability of the
\ Plan is about $12,290,000 as at August 31, 1976. The actuary has recommended that the statutory
contribution rates under the Plan be increased to ensure stable contribution rates in the future. Changes
to the Plan as described in Notes 3 and 4 below were enacted in August, 1980.
A valuation as at August 31, 1980 is presendy in preparation.
2. Investments
Investments are carried at the lower of cost and par value. Premiums are written off in the year of
acquisition. Discounts on single maturity bonds are amortized over the term of the bonds. Discounts
on serial bonds are recognized as income as the serial redemptions occur. Investments held at the end
of the year are as follows:
1980 1979
$ $
Book Value  37,758,477       28,492,297
Par Value    M  38,199,000       28,893,000
Market Value   1  30,047,577       26,076,030
The difference between the book value and the market value of the investments is not considered
to be a permanent reduction of the Fund balance available for payment of pension benefits and
therefore has not been provided for as at August 31, 1980.
3. Cost of Living Supplementary Allowances
Payment of supplementary allowances, adjusted quarterly in relation to the cost of living index,
commenced July 1, 1975. The Act provides that when the accumulated payments exceed 1 % of the
average annual total of contributory salaries, these supplements are to be financed by additional
employee and employer contributions, each at the rate of '/z% of salary. The Act provides for a further
- similar increase when the accumulated payments again exceed 1% of the average annual total of
contributory salaries. Provisions for the payment and financing of supplementary allowances have
been changed significantly as described in Note 4.
4. Subsequent Event
The provisions of the Pension (College) Act related to payment and financing of supplementary
allowances were amended at the 1980 session of the Legislature. The significant provisions, effective
October 1, 1980, are-
1) An increase of 1.0% of salary in contributions by employees and by employers.
2) Annual, rather than quarterly, cost of living supplementary allowances, payable to the extent
that moneys equal to the capitalized value are available in the Inflation Adjustment Account
created for the purpose.
5. Additional Information
These financial statements show only the position of the Fund as at August 31, 1980 and the
changes in Fund balance for the year then ended and do not purport to show the adequacy of the Fund to
meet the obligations of the superannuation plan.
 10 BRITISH COLUMBIA
COLLEGE PENSION FUND
Schedule No. 1
TRUSTEES OF THE COLLEGE PENSION FUND AND THE MINISTER OF
FINANCE FOR THE PROVINCE OF BRITISH COLUMBIA
Securities Held as at August 31, 1980
Par Book Market
Value Value Value
$ $ $
Government of Canada     1,017,000 1,017,000 775,590
Province of British Columbia Guaranty -
B.C. Hydro and Power Authority —30,320,000 29,918,920 24,041,716
B.C. Railway Company     6,487,000 6,449,016 4,964,946
B.C. School Districts Financing Authority        290,000 288,541 207,375
Peachland Irrigation District         50,000 50,000 32,750
Province of Ontario Guaranty -
Ontario Hydro         35,000 35,000 25,200
38,199,000    37,758,477    30,047,577
 PENSION (COLLEGE) ACT - ANNUAL REPORT
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 PENSION (COLLEGE) ACT - ANNUAL REPORT
COLLEGE PENSION FUND
Approved and Reciprocal Employers as at August 31, 1980
■Approved Employers
Section 12 (6) provides for the method of determining the highest average salary of a
I contributor who within three years of making his last contribution to the Fund enters the service of
[ one or more of the following employers and becomes entitled to a pension -
Government of Canada j .. ffi  July 1, 1973
Any employer to whom the Pension (Public Service) Act applies    July 1, 1973
Any employer to whom the Pension (Teachers) Act applies ..__:._™...  July 1, 1973
University of British Columbia _.„ .  July 1, 1973
University of Victoria . : .  July 1, 1973
Simon Fraser University ~. ~.   July 1, 1973
[ Special Agreement With Approved Employer
Section 12 (3) provides for transfer of funds in respect of an employee who within three
I months of termination of his service transfers to or from the service of the following approved
■employer -
Government of Canada . . - .       June 22, 1973
I Reciprocal Employers
Section 13 provides for the method of determining pensionable service and highest average
I salary together with pro-rata sharing of the present value of the allowance and transfer of funds in
I respect of an employee who within three years of termination of his service transfers to or from the
I service of the following reciprocal employers -
An employer under the Pension (Public Service) Act  ..  July 1, 1973
An employer under the Pension (Teachers) Act . 1  July 1, 1973
An employer under the Pension (Municipal) Act  ,  July 1, 1973
Workers' Compensation Board  June 3, 1974
IL
 14 BRITISH COLUMBIA
COLLEGE PENSION FUND
Approved Long Term Disability Salary Continuance Plans as at August 31, 1980
Date Plan Approved
Employer
Camosun College  jg Mar. 27, 1975
Capilano College June 4, 1979
Douglas College July 30, 1979
East Kootenay Community College July 14, 1980
Justice Institute of B.C  Aug. 3, 1979
College of New Caledonia Apr. 30, 1979
Northern Lights College June 8, 1979
Northwest Community College  Oct. 29, 1979
Okanagan College Feb. 4, 1977
Open Learning Institute Dec. 18, 1979
Pacific Vocational Institute Apr. 9, 1979
Vancouver Community College , . June 6, 1979

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