sfu academic pension plan debbie wilson plan administrator september 25, 2014
TRANSCRIPT
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SFU Academic Pension Plan
Debbie WilsonPlan Administrator
September 25, 2014
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Basic Structure Of Plan
• Plan type: defined contribution , or money purchase• Contributions made by SFU: 10% of basic salary, less a CPP
offset to a maximum of $419.40 per year• For a $150,000 salary, SFU contributes $14,580.60 per year• Plan members are permitted to make contributions, on a
voluntary basis; these contributions are tax deductible• Each plan member has an account at Sun Life to which their
contributions are directed each pay period
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Investment of Contributions
• Each plan member is responsible for determining how their contributions will be invested
• Board of Trustees have selected 9 investment options, which are regularly monitored
• GIC’s, money market, bond, equity, balanced funds• If a plan member does not make an active decision about
investment of their funds, the balanced fund is the default option
• There is no restriction on the number of funds that you can choose
• You can change your investment choice at any time
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Options on Retirement
• Options depend on when the contributions were made – contributions made before 1993 are more flexible; they were made before pension legislation was enacted in BC
• Pre 1993 contributions and investment income can be transferred to a Registered Retirement Income Fund (RRIF) or can be taken in cash (less withholding tax)
• Post 1992 contributions and investment income are locked-in; they must be used to provide a lifetime income. They can be transferred to an insurance company to provide you with an annuity, or they can be transferred to a Life Income Fund (LIF)
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RRIF and LIF
• Money must start to be withdrawn in the year after you set up the account
• There is a minimum amount that must be withdrawn, based on your age
• The LIF has a maximum withdrawal amount that can not be exceeded each year, based on your age
• For the LIF you can choose the withdrawal amount between the minimum and the maximum, and this choice can change every year
• You select the frequency of payments (monthly, quarterly, etc)• On your death, the remaining money is paid to your beneficiary
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Payout ScheduleAge Minimum for
RRIF and LIFMaximum for LIF Only
62 3.57% 6.9%
65 4.0% 7.2%
68 4.55% 7.6%
71 7.38% 8.1%
75 7.85% 9.1%
80 8.75% 11.5%
88 11.96% 20.0%
• At age 65 with an account of $500,000, you need to withdraw between $20,000 and $36,000
• At age 71 with an account of $500,000, you need to withdraw between $36,900 and $40,500
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Life Annuity
• You exchange your funds in return for a monthly income for your lifetime (and your spouse’s lifetime, if elected)
• You can select an annuity that has a guarantee period, that provides income to your spouse on your death, that is indexed to inflation
• For a given amount of money, the insurance company will determine the amount of monthly income based on your age, and based on interest rates at the time of purchase
• Once purchased, you can not change any of the details