• MY RETIREMENT• Level 2 Session

 • This session has been prepared by the QPAT.

•  • Any decision concerning your retirement

• should be based solely on information obtained from

CARRA.

•  • October 2013

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Acronyms You Should Know• CARRA – Commission administrative des régimes de retraite et d’assurances

• CARRA administers all civil service pensions

• RREGOP – Régime de retraite des employés du gouvernement et des organismes publics

• RREGOP covers: teachers, nurses and a host of other civil servants

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Service

• Service for Calculation= periods for which pension contribution has been paid, counts in calculation of pension benefit (2% per year)

• Service for Eligibility = periods with a job tie whether or not a contribution has been paid

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OLD VERSION

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One work day = .005 of a yearOne work year = 1.000 = 200 work days (teachers only)CARRA works on the basis of the calendar year NOT the school year.

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New Version

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Eligibility for Immediate Pension Without Reduction

RREGOP

• At age 60 regardless of number of years worked

• With 35 years of eligibility

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Pension Calculation Formula

• 2% X Number of years of service X Average salary of best-paid five years

• 38 years can be used in the calculation. The maximum pension is 76% based on 38 years of service.*

• At 38 years of service, pension contributions cease but pension may increase due to improved average salary (up to age 69).

• Example:• At age 60 with 20 years of service, the RREGOP pension

would be 40% of the average salary.

* Please note that a maximum of 35 years may be accumulated for service prior to January 1, 2011.

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Eligibility for Immediate Pension with Actuarial Reduction

• RREGOP: At age 55 with 2 years of service

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Actuarial Reduction ?• It is permanent

• It is calculated for each month between the date you retire and the first date on which you would be eligible for an unreduced pension (age 60 or 35 years of eligibility whichever comes first)

• RREGOP reduction is 0.333% per month (4% per year)

• You can eliminate the reduction in some cases. CARRA will calculate the cost

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Actuarial Reduction ExampleAge: 59 years

Years of service and eligibility: 34 years

Pension equals:

Years of service multiplied by 2% = 68%

One year’s actuarial reduction = 4%

4% of 68 = 2.72%

68 – 2.72 = 65.28% of average salary14

Redemption of Service

• When you retire, the pension plans provide a bank of 90 days (.450 of a year) which can be added to your years of service (prior to 2011)to complete years which would otherwise be incomplete (ex. Strike days)

• These days are neither moneyable nor transferable

• Left over days can be used to offset the cost of a buyback (for leaves prior to 2011)

• If you are still missing some days of leave of absence without pay, you may apply to buy them back. 15

• No buyback is required. The employer deducts full pension cost automatically and credits the absence for service.

• In effect since January 2002.

Absences of 30 consecutive days or fewer and leaves of

absence of 20% or less

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Period of IllnessPension contributions are covered for periods of illness up to three years per disability period.

Example:

A teacher falls sick and is off for 4 years. The first 104 weeks (2 years) is covered by salary insurance paid by the school board. During this period 2 years of service is credited for pension purposes.

After two years of salary insurance the teacher is covered by long term disability insurance (LTD) provided by Industrial Alliance for years 3 and 4 of the disability. The first year of LTD is credited as pension service at no cost. The second and subsequent years of LTD (beginning in year 4 of the disability) must be bought back.

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Periods of service or absences which may be redeemed

• Maternity Leaves Credited Without Cost:

– 1965 to June 30, 1976 , up to 90 days are credited– July 1, 1976 to June 30, 1983 , up to120 days are

credited– July 1, 1983 to December 31, 2005, up to 130 days

are credited– Since January 1, 2005, up to 135 days are credited

– Effective January 1, 1989, the credit is automatic when the employer reports the leave. For leaves prior, you must apply. There is no deadline and no cost.

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Buybacks

• Leaves of absence without pay– Full-time leaves of absence of at least 30 consecutive

days after July 1, 1973– Part-time leaves of absence after July 1, 1983– For extended parental leaves after

Jan. 1,1991, the cost is 50% of the normal cost.

• CARRA determines the cost based on the salary at time of buyback. Check:

• www.carra.gouv.qc.ca for the buyback estimate tool

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Buybacks

• Periods of teaching as a “casual” employee between July 1, 1973 and January 1, 1988 may be bought at a reduced cost.

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Integration with QPP benefits

• RREGOP is reduced at age 65• Maximum reduction in 2013: $ 11,900• QPP may be paid as of age 60• Actuarial reduction is 6% per year or .5%

per month prior to age 65*• Maximum QPP at age 60 is $8505

* The actuarial reduction will be increased progressively starting in 2014.

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QPP Amounts

• Age Rate (2013) Max. monthly amount (2013)

• 60 70 % $ 708.75 • 61 76 % $ 769.50 • 62 82 % $ 830.25 • 63 88 % $ 891.00• 64 94 % $ 951.75• 65 100 % $ 1012.50

N.B. Maximum monthly amounts change each year.

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OAS Eligibility• The federal government provides the Old Age Security

pension as early as age 65, but may be deferred until age 70 with improved payouts the longer you defer (0.6% per month, maximum 36% total)

• This amount (maximum $550/month at age 65) is paid on top of any other pensions

• This amount is NOT integrated in any way, but is subject to a proportionate repayment if total net income is greater than approximately $71,000. Once total net income reaches about $114,000, the entire OAS must be repaid.

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Pension EvolutionQPP at Age 60

• Age 58, 35 years of service, average salary $71,430 • RREGOP pays $50, 000• Age 60 QPP pays $8,505 + $50,000 = $58, 505• (During 5 years $42,525 from QPP)• Age 65 QPP is integrated with RREGOP

$50,000 –$11,900 = $38,100 (RREGOP)

+ $8,505 (QPP) = $46,605

• OAS is added $6,600 + $46,605 = $53,205

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Pension EvolutionQPP at Age 65

• Age 58, 35 years of service, average salary $71,430 • RREGOP pays $50,000• Age 60 (no change) $50,000• Age 65 QPP is integrated

$50,000 –$11,900 = $38,100 (RREGOP)

+$12,000 (QPP) = $50,100• OAS is added $6,600+ $50,100 = $56,700

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QPP at 60 vs. 65Cumulative QPP Income (2013 maximums)

Age QPP at 60 QPP at 65

65 $42,525 $0

70 $85,050 $60,750

75 $127,575 $121,500

77 $144,585 $145,800

80 $170,100 $182,250

QPP at 60 vs. 65

• Age Rate 2014 Rate 2015 Rate 2016+

• 60 68.2% 66.4% 64%• 61 74.56% 73.12% 71.2%• 62 80.92% 79.84% 78.4%• 63 87.28% 86.56% 85.6%• 64 93.64% 93.28% 92.8%• 65 100% 100% 100%

Changes do not apply to those born prior to 1954.

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Indexation• Each year pensions are indexed on January 1,

based on the CPI figures for the previous October.

• Indexation is based on three periods:

• Pension from service before 1982-07-01 is indexed fully. Pension from service from 1982-07-01 to 2000-01-01 is indexed at CPI minus 3%. Pension from service since 2000-01-01 is indexed at the better of CPI minus 3 or 50% of CPI.

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Example of indexation

– Retirement date 2013-06-30, 35 years of service

– 4 years before 1982-07-01– 17.5 years between 1982-07-01 and 2000-01-01– 13.5 years after 2000-01-01– CPI: 2%– Composite rate:

[(4x2.0%) + (17.5x0%) +(13.5x1.0%)] /35 = 0.61%

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QPP and OAS indexation

• QPP is fully indexed to the CPI once per year.

• OAS is fully indexed to the CPI four times per year.

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Survivor Benefits RREGOP• Pension to spouse (including same sex spouse) is only payable if

you are eligible for a pension at time of death

• 50% of the integrated RREGOP pension(or 60% at your option. Pension is reduced by 2% immediately upon retirement with this option.)

• If you are not eligible for a pension, your surviving spouse or your estate will receive a refund of the actuarial value of the indexed, deferred pension, or your contributions plus interest, whichever is the higher amount.

• If there is no spouse, the estate will receive a refund of any positive balance between contributions plus interest and benefits paid.

• Spouse includes common law spouse. You cannot prevent a spouse from receiving the pension. However, a spouse may renounce his/her right to a pension.

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QPP/OAS applications

• Forms are widely available (Caisses pop., post office, CLSCs)

• Online application is now possible• Apply 6 months in advance• Original birth certificate may be required• Direct deposit is available• QPP website: www.rrq.gouv.qc.ca• OAS website: http://www.hrsdc.gc.ca

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Working after Retirement

• If you retire under RREGOP:

• Since January 1, 2008 there is no penalty even after age 65

• There are no restrictions outside Quebec, in the private sector, or for self-employment.

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INSURANCE

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Insurance

• Quebec Prescription Drug Insurance Plan

• Since 1997, Quebec citizens without access to a private plan must be covered by the RAMQ

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QPAT

• QPAT has a health insurance plan with Industrial Alliance for retirees who are members of QPAT

• To be a member of QPAT you must apply.• If you apply and are under 65 and live in

Quebec, you must join the IA plan.• If you do not apply and are not a member,

you must join the RAMQ plan, unless you are covered by another private plan.

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QPAT Plans

• Health Insurance– Same as for active teachers with one

significant difference:

– Semi-private hospitalization is restricted to 90 days for any one illness.

N.B. There is no dental plan for retirees.

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QPAT Plans

• Basic Life– $10,000 for an individual if insured as an

active teacher– $5,000 for the spouse if insured when active

– Expires at age 75

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QPAT Plans

• Optional Additional Life (to age 65)

– $25,000 if at least $50,000 coverage as an active

– $50,000 if at least $75,000 coverage as an active

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QPAT Plans

• Accidental Death and Dismemberment Insurance (IA Pacific)

– Same as active coverage. – Available to age 75.

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RAMQ vs IA• RAMQ (rates as of July 1, 2012)

– Reimburses 71.5% / 71% / 70%/69% ------68% of drug costs. – Premium is $607 per year– Maximum monthly payable $82.66 at pharmacy– Maximum yearly payable $991.92 plus premium per

individual.– Maximum total $1598.92 per family member

• You must find alternative insurance for all other expenses or pay from your pocket.

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RAMQ vs IA

• IA reimburses 80% of drugs with a D.I.N. • The maximum payable per policy per year

for the deductible is $1160 (2013)• After $5800 of drug purchase, there is

100% reimbursement. (2013)• Individual premium for 2013 is $2186.28• Family premium for 2013 is $4364.52• (After 65 with RAMQ coverage: individual

$733.56 and family $1389.96 for 2013)42

Contact information

• All pension inquiries should be directed to the CARRA first at:

• 1-800-463-5533• Website: www.carra.gouv.qc.ca

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Retirement Checklist

 

1.              Letter of resignation submitted to the school board 3 months

before the date of retirement (before April 1st, if retiring June 30th).

 

2.               Complete and sign the retirement form prepared by the school

board. Send it by registered mail to CARRA. (Keep a copy)

 

3.                CARRA will communicate with you regarding retirement

preferences such as direct deposit and survivor benefits.

 

4.                Take care of insurance coverage.

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Important Information • ·        It is possible to have the value of the redeemable sick leave days

transferred into a RRSP. • ·        The school board must close the teacher’s salary file as of June 30th

(salary for July and August and bank of redeemable sick days). • ·        The process becomes irrevocable for the CARRA as soon as the first

pension cheque is deposited. • ·        The process becomes irrevocable for the school board as soon as

they receive and accept the letter of resignation for retirement.

 

The minimum notice required for resignation is in your local contract.

(normally 15 workdays)

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