retirement planning. services offered pension estimates pension estimates tax calculations tax...

RETIREMENT RETIREMENT PLANNINGPLANNING

Services OfferedServices Offered

• Pension EstimatesPension Estimates

• Tax CalculationsTax Calculations

• Benefit CostingBenefit Costing

• EAP referral (1 hour financial EAP referral (1 hour financial services)services)

Notice PeriodsNotice Periods

• Support StaffSupport Staff

2 weeks notice2 weeks notice

• Administrative StaffAdministrative Staff

30 days notice30 days notice

• Academic StaffAcademic Staff

90 days notice90 days notice

• Pension Plan requirementsPension Plan requirements

When Can You Retire?When Can You Retire?

• Unreduced Pension – 3 FactorsUnreduced Pension – 3 Factors* Age 65* Age 65* 60/20 factor* 60/20 factor* 85 factor* 85 factor

Reduced Pension Reduced Pension * Age 50 – 54 with 20 years service* Age 50 – 54 with 20 years service* Age 55 with at least 2 years of * Age 55 with at least 2 years of

serviceservice

Reduction FactorReduction Factor

• 3% reduction factor for every year or 3% reduction factor for every year or .25% per month away from the .25% per month away from the closest unreduced factorclosest unreduced factor

Calculating Your PensionCalculating Your Pension

Lifetime PensionLifetime Pension1.3% x1.3% x average pensionable x creditedaverage pensionable x credited

earnings up to theearnings up to the service serviceaverage YMPEaverage YMPE

PlusPlus2.0% x2.0% x average pensionable x creditedaverage pensionable x credited

earnings in excessearnings in excess service service of the average YMPEof the average YMPE

(less any applicable reduction factor)(less any applicable reduction factor)


• Bridge BenefitBridge Benefit

** Available only if your pension begins Available only if your pension begins before before age 65 and continues until age 65age 65 and continues until age 65

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0.7% x 0.7% x average pensionable xaverage pensionable x credited credited

earnings up to theearnings up to the service service

average YMPEaverage YMPE from Jan/66 from Jan/66(less any applicable reduction factor)(less any applicable reduction factor)


Assumptions:Assumptions: Average salary is $60,000 Average salary is $60,000 and 30 and 30 years of pensionable years of pensionable serviceservice

1.3% x $43,620 x 30 years1.3% x $43,620 x 30 years = $ 17,011.80= $ 17,011.80PlusPlus2% x $16,380 x 30 years2% x $16,380 x 30 years = $ 9,828.00= $ 9,828.00

Plus the bridge (to age 65)Plus the bridge (to age 65)0.7% x $43,620 x 30 years = $ 9160.200.7% x $43,620 x 30 years = $ 9160.20

TOTAL = $ 36,000TOTAL = $ 36,000

Calculating Your Best 5 Calculating Your Best 5 YearsYears

• Calculated on your best 60 Calculated on your best 60 consecutive months.consecutive months.

• You have the option to make your You have the option to make your current year’s annual leave current year’s annual leave pensionable upon retirementpensionable upon retirement


Example:Example:

Annual leave at retirement = $10,000Annual leave at retirement = $10,000

Add $10,000 into the calculation for Add $10,000 into the calculation for averageaverage

pensionable earnings for a new average pensionable earnings for a new average ofof

$62,000$62,000


Assumptions:Assumptions: Average salary is $62,000 and Average salary is $62,000 and 30 30 years of pensionable serviceyears of pensionable service

1.3% x $43,620 x 30 years1.3% x $43,620 x 30 years = $ 17,011.80= $ 17,011.80

PlusPlus

2% x $18,380 x 30 years2% x $18,380 x 30 years = $ 11,028.00= $ 11,028.00

Plus the bridge (to age 65)Plus the bridge (to age 65)

0.7% x $43,620 x 30 years = $ 9160.200.7% x $43,620 x 30 years = $ 9160.20

TOTAL = $ 37,200 TOTAL = $ 37,200 (difference = $1200 more per (difference = $1200 more per year)year)

Canada Pension Plan (CPP)Canada Pension Plan (CPP)

• Introduced in Canada Jan. 1, 1966Introduced in Canada Jan. 1, 1966

• Monthly maximum as of Jan 1/09 was Monthly maximum as of Jan 1/09 was $908.75 ($10,905 annual)$908.75 ($10,905 annual)

• CPP can begin as early as age 60, with a CPP can begin as early as age 60, with a 6% penalty per year away from age 65.6% penalty per year away from age 65.

• The offset to your CAAT Pension Plan The offset to your CAAT Pension Plan does not occur until you reach age 65, does not occur until you reach age 65, regardless of when you elect to take CPPregardless of when you elect to take CPP

Old Age Security (OAS)Old Age Security (OAS)

• Monthly maximum as of Jan/09 was Monthly maximum as of Jan/09 was $516.96 (6204 annual)$516.96 (6204 annual)

• Entitled to OAS at age 65.Entitled to OAS at age 65.

• Entitlement is based on residence in Entitlement is based on residence in CanadaCanada

CPP, OAS and CAAT PensionCPP, OAS and CAAT PensionLifetime Pension is $28,039.80Lifetime Pension is $28,039.80Bridge Pension is $ 9160Bridge Pension is $ 9160.20.20 = $37,200 = $37,200Employee retires at age 58Employee retires at age 58__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Age 58Age 58 Age 60Age 60 Age65Age65CAAT PensionCAAT Pension $37,200$37,200 $37,200$37,200

$28,040$28,040CPP PensionCPP Pension 0 0 $7,634$7,634 $7,634$7,634OAS PensionOAS Pension 0 0 $ 0$ 0 $6,204$6,204TOTAL:TOTAL: $37,200$37,200 $44,834$44,834

$41,878$41,878

Pension Income SplittingPension Income Splitting

• Pre 65 eligible payments:Pre 65 eligible payments:– Registered Pension PlanRegistered Pension Plan– If payment is a result of the death of a If payment is a result of the death of a

spouse, then spouse, then RRSPRRSP (Registered (Registered

Retirement Savings Plan), Retirement Savings Plan), DPSPDPSP (Deferred Profit Sharing Plan) annuity, (Deferred Profit Sharing Plan) annuity,

RRIFRRIF (Registered Retirement Income (Registered Retirement Income

Fund) or Fund) or LIFLIF (Locked in RRIF) (Locked in RRIF)


• Post 65 eligible payments:Post 65 eligible payments:

– RPPRPP– RRSP as an annuity (not in lump RRSP as an annuity (not in lump

sums)sums)– RRIF or LIFRRIF or LIF– DPSPDPSP


• Ineligible payments:Ineligible payments:– Old Age SecurityOld Age Security– Guaranteed Income SupplementGuaranteed Income Supplement– Canada Pension Plan (provisions exist)Canada Pension Plan (provisions exist)– If under age 65 then RRSP, DPSP, If under age 65 then RRSP, DPSP,

RRIF/LIF unless upon death of spouseRRIF/LIF unless upon death of spouse– RRSP by withdrawal RRSP by withdrawal – Retirement Compensation ArrangementRetirement Compensation Arrangement

Retiree BenefitsRetiree Benefits

Sun Life Benefit PlansSun Life Benefit Plans

• All retirees, regardless of age or group, All retirees, regardless of age or group, have the option of choosing retirement have the option of choosing retirement benefits from the 3 alternative plans. benefits from the 3 alternative plans. The premiums for plans 1 & 2 are based The premiums for plans 1 & 2 are based on a pre and post 65 structure. on a pre and post 65 structure.

• Under the 3 new plans, retirees will have Under the 3 new plans, retirees will have the same options in terms of maintaining the same options in terms of maintaining their current life insurance until age 65.their current life insurance until age 65.

Retiree PlansRetiree Plans

• Once benefits are elected, retirees Once benefits are elected, retirees WILL ONLY be able to make changes WILL ONLY be able to make changes to benefits on February 1to benefits on February 1stst of each of each year, however, the retiree can cancel year, however, the retiree can cancel coverage at any time during the year.coverage at any time during the year.

• Changes to the elections can only be Changes to the elections can only be to a lesser plan or based on the to a lesser plan or based on the “change in life provision”“change in life provision”

Alternative Plan 1Alternative Plan 1

• Represents the best of the current 3 active plans Represents the best of the current 3 active plans for extended health, hearing and visionfor extended health, hearing and vision

• Dental coverage is optional under this plan Dental coverage is optional under this plan • Premiums will depend on whether individual has Premiums will depend on whether individual has

reached age 65reached age 65• Out of country coverage – Effective September 1, Out of country coverage – Effective September 1,

2008 – limited to $1,000,000 per person per year. 2008 – limited to $1,000,000 per person per year. Effective July 1, 2010 – NO COVERAGEEffective July 1, 2010 – NO COVERAGE

• Comfort & Convenience Items (85% coverage)Comfort & Convenience Items (85% coverage)• Private Duty Nursing (effective July 1, 2010 – max Private Duty Nursing (effective July 1, 2010 – max

of $25,000 per year) – currently 85% unlimited of $25,000 per year) – currently 85% unlimited


• Covers extended health, hearing and Covers extended health, hearing and dentaldental

Does NOT cover:Does NOT cover: (as compared to Plan 1)(as compared to Plan 1)

Semi private hospital, out of country Semi private hospital, out of country coverage, recall exams and routine coverage, recall exams and routine dental work and vision care dental work and vision care (except for a one time (except for a one time

$200 coverage for contacts following cataract surgery)$200 coverage for contacts following cataract surgery)

Annual dental limit is $2000 totalAnnual dental limit is $2000 total

Alternative Plan 2 (cont’d)Alternative Plan 2 (cont’d)

• Massage therapy is covered at 50%Massage therapy is covered at 50%

Additional coverage:Additional coverage: (as compared to Plan (as compared to Plan 1)1)

100% reimbursement for generic 100% reimbursement for generic drugs drugs

(85% for brand name drugs)(85% for brand name drugs)


• A “bare bones” package with A “bare bones” package with option of option of dentaldental

Does NOT cover:Does NOT cover: (as compared to Plan 1)(as compared to Plan 1)

Semi private hospital, out of country Semi private hospital, out of country coverage, vision care coverage, vision care (except for a one time $200 (except for a one time $200 coverage for contacts following cataract surgery and 1 eye test and coverage for contacts following cataract surgery and 1 eye test and

glaucoma test per year)glaucoma test per year)

Paramedical services Paramedical services (except $500 physiotherapy per (except $500 physiotherapy per year, year, Ophthalmologist or Optometrist @85%) Ophthalmologist or Optometrist @85%)

Alternative Plan 3 (cont’d)Alternative Plan 3 (cont’d)

Reduced coverage for:Reduced coverage for: (as compared to Plan 1)(as compared to Plan 1)

Hearing Aids Hearing Aids ($1500 vs. $3000 and integrated ($1500 vs. $3000 and integrated with OHIP)with OHIP)

Private Duty Nursing Private Duty Nursing ($10,000 max. per year)($10,000 max. per year)

Orthotics & Orthopaedic shoes Orthotics & Orthopaedic shoes ($600 each 2 ($600 each 2 years)years)

Mandatory Generic substitutions for Mandatory Generic substitutions for drugs and deductibles of $100 per drugs and deductibles of $100 per insured is appliedinsured is applied

Life Insurance AcademicLife Insurance Academic

• Basic Life ($10,000) Basic Life ($10,000) $3.90$3.90

(to age 75 only)(to age 75 only)

• Supplemental ($115,000) Supplemental ($115,000) $109.25$109.25

(Premium is .95 per 1,000 in increments (Premium is .95 per 1,000 in increments of 5,000, up to the amount you had at of 5,000, up to the amount you had at retirement)retirement)

Life Insurance Life Insurance AdministrativeAdministrative


• Supplemental ($465,000) Supplemental ($465,000) $441.75$441.75(Premium is .95 per 1,000 in increments (Premium is .95 per 1,000 in increments of 5,000, up to the amount you had at of 5,000, up to the amount you had at retirement but with a maximum of retirement but with a maximum of $500,000 total)$500,000 total)

Life Insurance SupportLife Insurance Support


• Supplemental ($65,000) Supplemental ($65,000) $61.75$61.75(Premium is .95 per 1,000 in increments (Premium is .95 per 1,000 in increments of 5,000, up to the amount you had at of 5,000, up to the amount you had at retirement)retirement)

AdditionalAdditional

• Please refer to the HR web page for Please refer to the HR web page for the further details of coverage and the further details of coverage and premiums premiums

http://www.algonquincollege.com/humanresources/http://www.algonquincollege.com/humanresources/retireebenefits.htmretireebenefits.htm

Useful Web sitesUseful Web sitesCPP, OAS, GIS: CPP, OAS, GIS:

http://www.sdc.gc.ca/en/home.shtmlhttp://www.sdc.gc.ca/en/home.shtmlCanadian Association of Retired Persons: Canadian Association of Retired Persons:

http://www.fifty-plus.net/http://www.fifty-plus.net/Ontario Colleges Retirees Association: Ontario Colleges Retirees Association:

http://www.caatretirees.org/http://www.caatretirees.org/CAAT Pension Plan: CAAT Pension Plan:

http://www.caatpension.on.ca/index.htmlhttp://www.caatpension.on.ca/index.htmlHuman Resources Web Page: Human Resources Web Page:

http://www.algonquincollege.com/humanresources/ihttp://www.algonquincollege.com/humanresources/informationcentre.htm#PensionRetirementResourcesnformationcentre.htm#PensionRetirementResources

http://www.sdc.gc.ca/en/home.shtml

Retiree Privileges:Retiree Privileges:

• You have the option of maintaining You have the option of maintaining your email account and server your email account and server access from homeaccess from home

• You can take courses at the College You can take courses at the College on the same basis as full time on the same basis as full time employeesemployees

• Access to College facilitiesAccess to College facilities

Human Resources ContactsHuman Resources Contacts

Pension estimates:Pension estimates:Please contact either Connie or Jen Please contact either Connie or Jen Connie (x5119): [email protected] (x5119): [email protected] (x5367): Jennifer (x5367):

[email protected]@algonquincollege.com

Benefits questions:Benefits questions:Please contact either Kelly or DianePlease contact either Kelly or DianeDiane (x2080): [email protected] (x2080): [email protected] (x5121): [email protected] (x5121): [email protected]

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