COMBINATION PENSION PLAN: ANNUAL IVA ADJUSTMENTS
Annual statements for UVic Combination Pension Plan Internal Variable Annuity (IVA) accounts have been mailed to members.
The primary factors that determine annual adjustments to IVAs are:
- earnings from investments in the prior calendar year
- cost of maintaining annuities at current levels
- mortality assumptions and longevity experience
Full details on each of these components and the calculation of IVA benefits are explained on the reverse side of the issued IVA statements. In total, adjustments have resulted in a decrease for IVA benefits in 2023, amounting to -12.09%.
DEFINED BENEFIT MINIMUM INDEXING ADJUSTMENT
The defined benefit (DB) minimum is indexed for inflation. Indexing is based on the average change in the Canadian Consumer Price Index (CPI), to a maximum of 3% per year. When the change in the CPI exceeds 3%, any excess is carried forward to a future year when the change is less than 3%.
The average change in the CPI during the year ended March 2023 was an increase of 6.6%. As a result, effective July 1, IVA account DB minimums will be increased by 3.0%, with the outstanding 3.6% being carried forward and applied to years in which the average change to the CPI is less than 3.0%.
If a pensioner’s DB minimum exceeds their adjusted IVA benefit, the pension amount will include a supplement to raise the payment to the DB minimum.
IVA Pensioners, please refer to the reverse side of your annual statement for further information on these calculations.
If you have any questions about the IVA calculations and adjustments, or specific questions about your pension benefits, please contact Pension Services at 250.721.7030 or pensions@uvic.ca. You may also refer to the Plan document and other guides here on the website.
Be sure to sign and return a copy of your statement to Pension Services by August 15, 2023.