| To: | All Employees |
| From: | Human Resources |
| Date: | May 4, 2022 |
| Subject: | New Pension and Benefits Rates effective May 1, 2022 |
| Note: | This email is for information |
What is happening?
On May 1st of each year, the contracts that cover the University of Waterloo’s extended health, dental, long-term disability, and life insurance benefits are subject to a rate renewal. Pension contribution rates are not subject to an annual renewal, but changes are required through time. Where applicable, new rates are applied, and employee deductions processed. Participation in the University of Waterloo benefits program is mandatory for all eligible employees. Please refer to the employee Benefits section of the Human Resources website for more information.
New provider for long term disability
As part of the holistic benefits review, a competitive bidding process for the University’s long term disability benefit occurred in the middle of 2021 and results in a positive change. The long-term disability provider will change from Canada Life to Sun Life Financial effective May 1, 2022. With this change comes a decrease to the premium rate of just over 30%, which is 100% employee paid. Otherwise, the change is minimal to employees and will affect only those who need to apply for LTD benefit payments and who have a date of disability of May 1, 2022, or later.
How are new rates calculated?
New benefits rates are based on the University’s claims experience and expenses charged by our providers. The pension rates are based on actuarial calculations based on funding levels and as communicated in 2020, changes to employees’ pension contribution rates are being phased in over a three-year period, and this year represents the third and final adjustment required.
How does this impact me?
You will observe a change in your payroll deductions for the following benefits effective May 1, 2022:
|
Increase of 5.5% |
|
Decrease of 30.3% |
|
Increase of 28.6% |
|
No change |
|
Decrease of 3.8% |
|
Increase of 1.5% |
What will the 2022 Pension and Benefits rates be?
The table below reflects the rates effective May 1st, 2022.
| Benefit | Monthly Rates | Cost Sharing |
|---|---|---|
|
Pension – employee contributions only |
7.80% of base earnings up to the YMPE; and, 11.20% of base earnings exceeding the YMPE* |
100% employee paid |
|
Long-term disability |
1.015% of earnings** (excludes tax) |
100% employee paid |
|
Basic Life insurance |
$0.126 per $1,000 of coverage*** (excludes tax) |
1 x earnings is paid by the University, 2 and 3 x earnings is 66.7% university paid |
|
Extended health |
$71.24 single $227.33 family (includes tax) |
100% university paid (shared if part-time) |
|
Dental |
$48.72 single $146.60 family (includes tax) |
100% university paid (shared if part-time) |
*the Year’s Maximum Pensionable Earnings (YMPE) for 2022 is $64,900
**the maximum insured salary effective May 1, 2022 is $190,549 (an increase of 3.4% from last year’s maximum of $184,283)
***Optional Life insurance (employee coverage above 3 x earnings and spousal coverage) rates remain unchanged for the upcoming year due to the premium rate guarantee in effect until April 30, 2023
Cost Impact Example – Long Term Disability and Life Insurance
The following table illustrates the impact to rates for the 30.3% decrease to long-term disability and 28.6% increase to basic life insurance effective May 1, 2022:
|
Sample Salary |
Long-term disability (100% employee share) |
Basic Life insurance (Example based on coverage at 3 times earnings; 33% employee share) |
||||
|
1-May-21 |
1-May-22 |
Monthly Difference |
1-May-21 |
1-May-22 |
Monthly Difference |
|
|
$35,000 |
$42.50 |
$29.60 |
-$12.90 |
$3.42 |
$4.41 |
$0.99 |
|
$65,000 |
$78.92 |
$54.98 |
-$23.94 |
$6.36 |
$8.19 |
$1.83 |
|
$100,000 |
$121.42 |
$84.58 |
-$36.84 |
$9.78 |
$12.60 |
$2.82 |
|
$125,000 |
$151.77 |
$105.73 |
-$46.04 |
$12.23 |
$15.75 |
$3.52 |
|
$190,549 |
$223.75* |
$161.17 |
-$62.58 |
$18.64 |
$24.01 |
$5.37 |
*Maximum insured earnings was $184,283 May 1, 2021; this was the maximum premium an employee could pay
Please visit the Human Resources website to understand more about your benefits and pension arrangements. For questions regarding these rates, please contact Human Resources at hrhelp@uwaterloo.ca.