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Thirteenth Annual Report of the Business Done in Pursuance of the Pension (College) Act YEAR ENDED AUGUST… British Columbia. Legislative Assembly 1982

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 PROVINCE OF BRITISH COLUMBIA
Thirteenth Annual Report
of the Business Done in Pursuance of the
Pension (College) Act
YEAR ENDED AUGUST 31
1981
Queen's Printer for British Columbia G
Victoria. 1982
ISSN 0228-7382
  To The Honourable Henry P. Bell-Irving, D.S.O., O.B.E., E.D.,
Lieutenant-Governor of the Province of British Columbia
May it please Your Honour:
The undersigned respectfully submits the Report of the business done in
pursuance of the Pension (College) Act during the fiscal year ended August 31,
1981.
EVAN M. WOLFE
Provincial Secretary and
Minister of Government Services
Office of the Provincial Secretary and
Minister of Government Services
Victoria, British Columbia
December], J981
 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,
1981.
Respectfully submitted,
J. D. REID
Superannuation Commissioner
December 1, 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, 1981
Section 3—All money 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 4—Cost of living supplements totalling $117,618 were paid during
the year. After the January 1, 1981 adjustment, quarterly increases were replaced by
annual increases, the first of which will be paid January 1, 1982. The annual
increases are tied to the consumer price index and are payable to the extent that the
capitalized value is available in the Inflation Adjustment Account created for the
purpose. For this purpose are allocated to the Inflation Adjustment Account employee and employer contributions each at the rate of 1 per cent of salary and interest
earnings attributable to funds held for the payment of superannuation allowances in
excess of the rate assumed by the actuary.
Section 5—During the year 64 eligible employees were, upon application,
declared to be exempt from becoming contributors.
As at August 31, 1981 there were 3,065 active contributors (2,124 male, 941
female).
Section 6—Employee contributions amounted to $4,991,043 made up as
follows:
$
Basic Contributions ^1+,....,.  4,276,023
Inflation Adjustment Contributions  706,174
Voluntary Contributions  8,846
Effective October 1, 1980, employee contributions were increased 1 per cent
of salary. Effective the same date, these additional contributions were allocated to
the Inflation Adjustment Account described above.
Section 8—Employer matching contributions amounted to $4,982,197.
Section 12 (1)—During the year 32 allowances were granted. There were 107
allowances in force as at August 31, 1981. A summary and comparative statistics of
allowances granted and in force are shown on Schedules 3 and 4 attached to this
report.
Section 12 (3)—Transfers totalling $105,096 were received from 1 approved
employer during service as follows:
Government of Canada Public Service $
Superannuation Account  105,096 re 8 employees
5
 6 BRITISH COLUMBIA
Section 13—Transfers totalling $500,875 were received from 2 reciprocal
pension plans in respect of 8 contributors upon grant of allowance as follows:
$
Teachers' Pensions Fund  429,658 re 1 allowances granted
Public Service Superannuation Fund     71,217 re 1 allowance granted
Transfers totalling $17,961 were made to 3 reciprocal pension plans in respect
of 1 employee upon grant of allowance and in respect of 2 contributors following
transfer of service as follows:
Upon Grant of Allowance $
Public Service Superannuation Fund..      9,633 re 1 allowance granted
During Service
Government of Canada Public $
Service Superannuation Account..,*  4,533 re 1 contributor
Municipal Superannuation Fund  3,795 re 1 contributor
Section 18—Refunds amounting to $567,479 were granted to 174 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. Statutory amendments to improve the financing of the supplementary allowances were enacted in 1980, as previously described.
Section 24—Administration expenses paid from the Fund amounted to
$35,952.
Section 27—Long-term investments held by the trustee as at August 31, 1981
amounted to $38,199,000 (par value), as set out in the attached Schedule 1. There
were no transactions during the year. Short-term investments held at the date
amounted to $17,600,671 compared to $3,654,648 in 1980.
Based on the mean of the Fund opening and closing balances amounting to
$48,508,267 the net rate of interest earned during the year after charging administration expense was 11.825 per cent. A comparative statement of investment
interest and transactions is presented in the attached Schedule 2.
LEGISLATION
The Pension (College) Act was amended at the 1981 session of the Legislature.
The amendment made the investment powers of the Trustees in respect of the
College Pensions Fund the same as those of the Minister of Finance in respect of a
trust fund under section 36 (2) of the Financial Administration Act. When proclaimed, and regulations thereunder have been approved, this section will have the
effect of broadening investment powers to permit investment in additional types of
securities such as are issued by the Municipal Finance Authority of British Columbia, commercial paper of Canadian corporations, corporate bonds and shares, and
first mortgages, subject to specified conditions as to the security of the investment
and the status of the issuer.
J. D. REID
Superannuation Commissioner
 COLLLGL PliNSION ACT—ANNUAL REPORT 7
Exhibit A
COLLEGE PENSION FUND
STATEMENT OF FINANCIAL POSITION
AS AT AUGUST 31, 1981
ASSETS 1981 1980
$ $
Cash(Note2)      1,444,794 939,336
Contributions receivable      1,438,970 1,353,867
Accrued interest on investment .-.,..:,.      1,383,761 898,560
Investments (Note) 2
Short-term    17,600,671 3,654,648
Long-term    37,782,363 37,758,477
59,650,559 44,604,888
LIABILITY AND FUND BALANCE
Liability
Accounts payable    4,108 3,477
Fund Balance (Exhibit B) (Note 4)
Basic account   58,151,580 44,601,411
Inflation adjustment account     1,494,871 —
59,646,451 44,601,411
59,650,559 44,604,888
The four accompanying notes are an integral part of these financial statements.
Approved by:
J. D. REDD, EC.LA.
Superannuation Commissioner, Trustee
C. WEBSTER, C.A.
Comptroller, Superannuation Commission
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
1981 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 tests 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 1981 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.
ERMA MORRISON. C.A.
Auditor General
Victoria, British Columbia
25 November 1981.
 8 BRITISH COLUMBIA
Exhibit B
COLLEGE PENSION FUND
STATEMENT OF CHANGES IN FUND BALANCE
FOR THE YEAR ENDED AUGUST 31, 1981
Fund Balance Increased by iwt 1980
Contributions— $ $
Employees:
Basic  4,276,023 3,489,501
Inflation adjustment (Note 3)  706,174
Voluntary  8,846 6,457
4,991,043 3,495,958
Employer:
Basic  4,276,023          3,489,501
Inflation adjustment (Note 3)  706,174
Transfer from other funds  605,971           1,516,836
Income from investments  5,865,290         3,800,316
16,444,501 12,302,611
Fund balance decreased by
Superannuation allowance payments—
Contributory  653,679 462,798
Cost of living supplements (Note 3)  117,618 75,640
771,297 538,438
Refunds ...„„.,,..,„....  567,479 262,612
Transfers to other funds  17,961 44,302
Pensioners' medical premiums—matching portion  6,772 4,149
Administration expenses  35,952 21,739
1,399,461 871,240
Net increase in fund balance   15,045,040       11,431,371
Fund balance at beginning of year  44,601,411       33,170,040
Fund balance at end of year (Exhibit A)  59,646,451       44,601,411
 C'OLLI-.GI. l'1-.NSION ACT—ANNUAL REPORT 9
COLLEGE PENSION FUND
NOTES TO FINANCIAL STATEMENTS
AUGUST 31. 1981
1. Actuarial Valuation
According to the Pension (College) Act, an actuarial valuation of the assets and liabilities of the
Fund is required to be made by an actuary upon request by the Superannuation Commissioner. The first
valuation of the Fund was carried out as at August 31, 1976. The valuation indicated that the unfunded
liability of the Plan was $12,290,000 as at that date. The actuary recommended that the statutory
contribution rates under the Plan be increased to ensure stable contribution rates in the future.
Statutory amendment reflecting his recommendations as described in Note 3 was passed by the
Legislature.
A valuation as at August 31, 1981 is presently in preparation.
2. Investments
Investments include bonds issued or guaranteed byCanadaora Province. Investments are carried
at the lower of cost and par value, with "cost" defined as acquisition costs adjusted as follows:
(i) Premiums are written off in the year of acquisition.
(ii) Discounts on single maturity bonds are amortized over the term of the bonds,
(iii) Discounts on serial bonds are recognized as income when redemptions occur.
Long-term investments held at the end of the year are as follows:
1981 1980
s $
Book Value  37,782,363        37.758,477
Par Value 38,199,000        38,199,000
Market Value 22,388,883        30,047,577
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, 1981, since it is generally expected that Fund
investments will be held to maturity.
During the year, the Investment Committee decided that available funds should be invested in
short-term securities. This represents a departure from the previous policy of holding short-term
investments only until suitable long-term investments could be purchased. The short-term investments ($17,600,671—1981, $3,654,648—1980) have therefore been segregated from cash and
classified as investments.
3. Legislative Changes
An amendment to the Pension (College) Act was passed at the 1980 session of the Legislature.
The significant provisions, effective October 1, 1980, are—
(1) An increase of 1 per cent of salary in employee and employer contributions, which is
allocated to the Inflation Adjustment Account.
(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.
4. Additional Information
The Fund balance is divided into an Inflation Adjustment Account to which employee and
employer contributions each at the rate of 1 per cent of salary are credited and a Basic Account to
which all other contributions are credited. The Fund balance for 1980 has been restated accordingly.
These financial statements show only the position of the Fund as at August 31, 1981 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 pension plan.
 10 BRITISH COLUMBIA
COLLEGE PENSION FUND
Schedule 1
trustees of the college pension fund and the minister of
finance for the province of british columbia
Securities Held as at August 31, 1981
Par Book Market
Value Value Value
$ $ $
Government of Canada       1,017,000     1,017,000        582,296
Province of British Columbia Guaranty
B.C. Hydro and Power Authority  30,320,000 29,940,521 17,965,599
B.C. Railway Company  6,487,000 6,451,191 3,632,113
B.C. School Districts Financing Authority.....,,.,  290,000 288,651 166,175
Peachland Irrigation District  50,000 50,000 23,625
Province of Ontario Guaranty
Ontario Hydro  35,000 35,000 19,075
38,199,000  37,782,363   22,388,883
 COLLEGE PENSION ACT—ANNUAL REPORI
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 BRITISH COLUMBIA
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 COLLEGE PENSION ACT—ANNUAL REPORT
COLLEGE PENSION FUND
Schedule 4
Normal Allowances Granted September 1, 1980 to August 31, 1981
SUBDIVIDED BY YEARS OF SERVICE AND VALUE OF ALLOWANCE
Years of Service
Number of
Allowances
Granted
Average Salary
During Last
Five Years
Average Annua!
Allowance on
Single Life
Plan
Average
Value of
Allowance
Average
Employee
Share
Average
Government
Share
25
7
$
26,040
27,588
$
2,080
5,225
$
22,637
54.155
$
6,338
13.027
$
10-14	
41.128
AVERAGE OF NORMAL ALLOWANCES GRANTED DURING YEAR:
61 (Age) 26,376
TOTAL VALUE OF NORMAL ALLOWANCES GRANTED DURING YEAR:
844,195     88.577     948,019    249,639    698,380
SUBDIVIDED BY YEARS OF SERVICE AND AGE AT RETIREMENT
Age at Retirement
Years of Service
55
56
57
58
59
60
61
62
63
64
65
Total
%
Under 10 years..
10-14	
2
1
3
1
1
5
2
1
1
1
1
1
1
7
25
7
78
22
2
1
3
1
1
7
3
2
2
1
9
32
6
3
9
3
3
23
9
6
6
3
29
100
Allowances Other Than Normal Granted September 1, 1980 to August 31, 1981
Number of
Death
Disability
Deferred
Allowances
Nil
Nil
Nil
Granted
Nil
 14 BRITISH COLUMBIA
COLLEGE PENSION FUND
Approved and Reciprocal Employers as at August 31, 1981
Effective Date
Approved Employers
Section 12 (6) provides for the method of determining the highest salary of a
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 Julv | 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 | 1973
University of Victoria July I I973
Simon Fraser University July j§ 1973
Special Agreement With Approved Employer
Section 12 (3) provides for transfer of funds in respect of an employee who within
three months of termination of his service transfers to or from the service of the
following approved employer:
Government of Canada June 22, 1973
Reciprocal Employers
Section 13 provides for the method of determining pensionable service and
highest average salary together with pro-rata sharing of the present value of the
allowance and transfer of funds in respect of an employee who within three years of
termination of his service transfers to or from the service of the following reciprocal
employers:
An employer under the Pension (Public Service) Act July 1, 1973
An employer under the Pension (Teachers) Act July 1, 1973
An employer under the Pension (Municipal) Act July 1, 1973
Workers' Compensation Board June 3, 1974
Approved Long-term Disability Salary Continuance Plans as at August 31, 1981
Date Plan Approved
Employer
Comosun College K„ March 27, 1975
Capilano College June 4, 1979
Douglas College July 30, 1979
East Kootenay Community College July 14, 1980
Justice Institute of B.C August 3, 1979
College of New Caledonia April 30, 1979
Northern Lights College June 8, 1979
North Island College August 6, 1981
Northwest Community College October 29, 1979
Okanagan College February 4, 1977
Open Learning Institute December 18, 1979
Pacific Vocational Institute April 9, 1979
Vancouver Community College  June 6  1979
Queen's Printer for British Columbia 1!
Victoria, 1982

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