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November 7, 2003
Financial information about pay out of sick banks
BCNU has received several inquiries from nurses concerned about rumours that HEABC may bring a proposal to the bargaining table to cancel the pay out of unused sick banks for nurses when they retire. These nurses wanted advice on whether they would be better off to retire earlier than they had planned, in order to ensure they receive their sick bank payout.
Generally speaking the answer depends on individual circumstances. But it is important for nurses to make sound financial decisions, and to obtain all relevant financial information before making any moves affecting their future, especially if these moves are based on anxiety and rumour.
Here are some sample scenarios showing the income you would lose on your pension every year, as opposed to what you would get from the one-time sick bank payout.
| Date of Retirement |
Age |
Years Pensionable Service |
Average Wage
Last 5 yrs |
Annual Pension Amount |
Difference in Pension Each yr in Retirees Life |
Total Loss over 20 yrs life span |
Sick Bank Payout Half bank Max bank at 78 days at 156 days |
Jan 2004
Jan 2005 |
55 56 |
10
11 |
$54,452 $57,262 |
$9,257 $11,086 |
$1,829 |
$36,583 |
|
| Jan 2004 Jan 2005 |
55 56 |
15
16 |
$54,452 $57,262 |
$13,885 $16,125 |
$2,240 |
$44,797 |
|
| Jan 2004 Jan 2005 |
55 56 |
20
21 |
$54,452 $57,262 |
$18,514 $21,164 |
$2,650 |
$53,010 |
|
Jan 2004
Jan 2005 |
59
60 |
10
11 |
$54,452
$57,262 |
$10,564
$12,598 |
$2,034 |
$40,681 |
|
Jan 2004
Jan 2005 |
59
60 |
15
16 |
$54,452
$57,262 |
$15,845
$18,324 |
$2,478 |
$49,569 |
|
Jan 2004
Jan 2005 |
59
60 |
20
21 |
$54,452
$57,262 |
$21,127
$24,050 |
$2,923 |
$58,457 |
|
Assume full time nurse at top increment step Level One (Part time would be proportionally less)
Amounts shown are approximate only. Precise pension amounts are affected by indexing and CPP bridge.
Consult the Pension Web page - www.pensionsbc.ca All amounts are before tax
For many people, retiring earlier in order to retain the payout would not be to their financial advantage.
For your own precise calculation go to the Municipal Pension Plan website and use the pension estimator www.pensionsbc.ca
BCNU cannot control what HEABC brings to the bargaining table. But if they do propose the removal of the sick bank payout, BCNU will argue strongly against it. The payout is a strong incentive for people not to use more sick time than they need. Removing the bank would completely contradict the efforts now being made by health authorities to reduce the amount of time lost to sick days.
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