Date: April 7, 2015
From: UBC Human Resources and the UBC Faculty Association
To: Faculty and Academic/Administrative Executives who are enrolled in the Income Replacement Plan (IRP)
Subject: IRP Premium Holiday, effective April 16, 2015 to May 31, 2015
The UBC Income Replacement Plan (IRP) is a mandatory, employee-paid plan that provides a monthly income for members who qualify. This plan is insured and administered by Sun Life, with oversight from the UBC Faculty Association and UBC. Premiums for this plan are deducted from each of your pay cheques.
Effective January 1, 2012, the Faculty IRP was changed from a “self-insured” plan to one that is “fully-insured”. What this means is that rather than plan members assuming the responsibility to pay the costs of usage, the insurance company, Sun Life, assumes the risk or liabilities associated with the plan in exchange for premium payments. The primary reason for making this change was to reduce risk to plan members, while at the same time ensuring its continued competitiveness with respect to pricing and services in the marketplace. Through the public proposal process that governs how we procure these kinds of services at a public institution, we were able to make notable gains in the plan, including providing a more equitable benefits payment structure for our members.
When the plan was self-insured, a small portion of plan member contributions was set aside to ensure that the plan could pay for any costs associated with the plan, primarily in terms of usage (the number of claims). To maintain a healthy and viable plan, and reduce the risk to members of an underfunded plan, contributions were assessed on an annual basis to allow the plan to absorb any fluctuations in claims. The contributions collected from members to fund the plan were held in trust by RBC Dexia and invested by Phillips Hager North. With the transfer to a fully insured plan and the winding up of the self-insured plan, it was determined there are surplus funds. As these monies belong to the plan members, and to complete the wind-up of the self-insured plan, these surplus funds will be paid out by way of a “premium holiday” for members who are enrolled in the IRP. This means that you will still have coverage under the IRP plan during the premium holiday period, but you will not be required to pay premiums. Instead, your premiums will be paid from the surplus funds.
You will receive a premium holiday over three pay periods, from April 16 to May 31, 2015. You will notice the premium holiday starting with your April 16 to 30, 2015 pay period and ending with your May 16 to 31, 2015 pay period.
After this time your premium deductions will continue as usual (resuming on June 1, 2015).
Additional Information and Questions
For more information about the IRP, please visit:
- Faculty: http://www.hr.ubc.ca/benefits/irp-dbp/faculty/
- Academic Executives: http://www.hr.ubc.ca/benefits/irp-dbp/academic-executive/
If you have any questions, please contact Stephanie Mah at 604-822-6823 or email@example.com.