Contributory Pension Plan for Hourly-Rated Employees of McMaster University Including McMaster Divinity College (“Hourly Plan”)
The Hourly Pension Plan Text serves as the legal foundation of the pension plan and McMaster`s governing document. The Plan was amended and restated effective January 1, 2019 (“2019 Restatement”). The 2019 Restatement was reviewed by a working group which included representatives of the Hourly Pension Plan Committee, Human Resources, and legal counsel. This was subsequently reviewed by the Hourly Pension Plan Committee prior to approval by the Board of Governors. The 2019 Restatement:
- Consolidates the prior restatement (2014) and subsequent amendments into a single document;
- Clarifies specific plan provisions that required refinement;
- Incorporates “housekeeping” changes (deletes provisions that no longer apply, migrates historical member contribution rates to an Appendix, etc.);
- Reflects legislative changes since the 2014 Restatement; and
- Aligns select plan provisions with administrative practice.
With respect to legislative changes, the Plan’s definition of “spouse” has been amended to reflect changes to the definition of “spouse” under the Pension Benefits Act (“PBA”). Specifically, the definition is updated to recognize as “spouses” persons who are living together in a conjugal relationship of some permanence, so long as they are the “parents of a child” as defined in the Children’s Law Reform Act.
The Plan has also been amended to reflect new funding rules under the PBA.
Other changes reflected in the 2019 Restatement include the following:
- Incorporation of a collectively-bargained change to the contribution rate for Parking and Transit Services employees effective July 14, 2019.
- The PBA permits small pension benefits (i.e., benefits that do not exceed a threshold value) to be “unlocked” and paid in a lump sum cash payment, less withholding tax, or transferred to a registered retirement savings account. The Plan has been amended to permit unlocking of small benefits for surviving spouses who are entitled to benefits from the Plan (previously, the Plan terms only permitted members to unlock small pension benefits). All small pension benefits must be paid as a lump sum cash payment, less applicable withholdings, unless the member/surviving spouse has elected to transfer the benefit to a retirement savings vehicle.
- Confirm that, where the “Best Average Earnings” computation yields the same amount in respect of two or more periods of Credited Service, the Member’s Average YMPE is determined based on the most recent of such periods.
- To ensure compliance with income tax rules and to align with administrative practice, the Plan has been amended to confirm that a refund of Excess Contributions is available when the member elects a lump sum transfer (not a monthly pension) and is an alternative to, not in addition to, the payment of twice the Member’s contributions with interest.
- Consistent with administrative practice, the Plan is amended to recognize in the pensionable earnings of disabled Plan members earnings increases applied to the relevant employee group generally. A corresponding change deletes an obsolete special “Average YMPE” calculation for disabled Plan members.
Plan Amendment #1 reflects the changes from Local 5555 Unifor Unit 5 bargaining agreement ratified on April 18, 2019, which are outlined below:
- Members on a leave of absence without pay cease contributions and benefit accruals under the Plan in respect of the period of absence
- Member pension contribution rates will increase to 8% of base salary up to the YMPE and 11% of base salary over the YMPE effective November 29, 2020.