On December 15th, MURA notified members (those who have provided MURA with an e-mail address) of the 1.49% increase in pensions starting January 2016. The full increase applies to those who were receiving a pension from the Salaried Pension Plan on June 30, 2014, and is equivalent to the average monthly increase in the Consumer Price Index (CPI) for 2014/15. Those who retired between July 1, 2014 and June 30, 2015 received a pro-rated increase and those who retired after June 30, 2015 received no increase. Unlike the increase in January 2015, there is no supplementary increase this year.

The rate of return on pension assets for the year ended June 30, 2015 was 8.31%, the 5th consecutive year of positive returns. The 5-year average rate of return was 11.26%, considerably above the 4.5% threshold that is required before a pension increase is given. Investment markets for the first half of the 2015/16 year have been volatile and generally negative. While it is not possible to predict the rate of return for the full 2015/16 year, any negative return would have to be very significant before the 5-year average would be less than the 4.5% threshold and prevent an increase in January 2017.

The audited financial statements for the year ended June 30, 2015 and other information related to the Salaried Pension Plan can be found at HR's McMaster Pension Plans Documents page.

When will my pension end?

Have you ever asked yourself that question? The McMaster pension plan for salaried employees is a defined benefit plan. Under such a plan, employees contribute to the pension fund while they are working and receive a pension calculated on their years of service and best- 5-year average salary, for their lifetime after they retire.

At the time you retired, you chose the form of pension payments you will receive.

If you were single when you retired, you will receive the full amount of your pension during your lifetime. Your full pension is guaranteed for a minimum of 84 months. If you die before receiving 84 monthly payments (7 years), your pension will be paid to your beneficiary or to your estate until 84 payments have been made.

The normal pension choice for a member who has a spouse when he/she retires pays the full amount of the pension to the member for his/her lifetime, with the spouse, if still living when the member dies, receiving 50% of the pension for his/her remaining lifetime. As explained above, the full pension is guaranteed for a minimum of 84 months. If the member dies before receiving 84 monthly payments (7 years), the full pension will be paid to the spouse, if still living, or to your estate, until 84 payments have been made. After this period the 50% pension would be paid to the surviving spouse for the remainder of his/her lifetime. It’s important to note, however, that as a member with a spouse, you may have chosen an optional form of payment when you retired which could have increased or decreased the amount of your pension, the “guarantee period” and the amount your spouse will receive on your death. These options are found in Section 6.04 of the pension plan text.

R. A. West
MURA representative, Pension Trust Committee