Understanding the Pension Plan for the Employees of Concordia University
Pension Plan for the Employees of Concordia University • Pension Services – Senior Advisor – Pension Assistant – Pension & Benefits Clerk
Pension Plan for the Employees of Concordia University • Administration of the Pension Plan: – Communication of benefits – Taxation reporting – Enrolment and eligibility – Change of beneficiary – Status change
Pension Plan for the Employees of Concordia University • Our partners: – Morneau Sheppell → actuaries & consultants – CIBC → Pension fund custodian – Pension Committee – Office of the Treasurer
Pension Plan for the Employees of Concordia University • Pension Plan for the Employees of Concordia University is one plan • Administered under the laws of the Régie des rentes du Québec’s Supplemental Pension Plans Act
Defined Benefit vs. Defined Contribution • Defined Benefit Plan – benefits are defined ahead of time based on a set formula using your pensionable earnings and years of credited service; – the employer bears the risk of a shortfall in investment results.
• Defined Contribution Plan – benefits are based on the contributions made to the plan and the investment earnings on the contributions; – the employee bears this risk.
Eligibility and enrolment • Non full-time, permanent employees must meet one of the following qualifications in the previous calendar year: – a minimum of 700 hours worked; or – remuneration equal to at least 35% of the YMPE. • Automatically enroll in the Pension Plan as a NonContributory Member effective January 1st of following year. • Changing contribution status – Can be changed annually effective January 1st; – must submit request to the pension services by the end of November of the preceding calendar year.
Pension Formula Contributory formula
Non-Contributory formula For each year of credited service prior to January 1, 2008:
Retirement at age 65
2% of your Final Average Earnings LESS 0.5% of the lesser of the Final Average YMPE and your Final Average Earnings
1.1% of your Final Average Earnings LESS 0.25% of the lesser of the Final Average YMPE and your Final Average Earnings
For each year of credited service from January 1, 2008: 1% of your Final Average Earnings LESS 0.25% of the lesser of the Final Average YMPE and your Final Average Earnings
Pension Formula Contributory formula
Non-Contributory formula For each year of credited service prior to January 1, 2008: Pension payable before age 65 1.1% of your Final Average Earnings
Retirement before age 65
Pension payable before age 65 2% of your Final Average Earnings Pension payable at age 65 See formula on previous slide
Pension payable at age 65 See formula on previous slide For each year of credited service from January 1, 2008:
Pension payable before age 65 1% of your Final Average Earnings Pension payable at age 65 See formula on previous slide
Designating a beneficiary • If you have a spouse – your surviving spouse is automatically your beneficiary; – you may designate someone else, if your spouse waives his or her right to benefits; – waiver may be revoked at any time before pension payments begin; – waiver does not take away the spouse's right to a potential division of the accumulated amounts in the event of a separation or divorce.
Designating a beneficiary • If you do not have a spouse – you may designate anyone you wish.
• If there is no valid beneficiary, your estate will receive the survivor benefits. • Changing beneficiary – simply complete the beneficiary designation form and submit it to Pension Services.
Forms of pension payment How it works
Lifetime pension with a Joint and survivor guaranteed period pension (available only if you have a spouse)
You receive a pension...
For your lifetime
For your lifetime
And your pension is guaranteed for...
5, 10 or 15 years, whichever you choose
5 or 10 years, depending on the joint and survivor pension you choose
Which means that, if you die before the chosen guaranteed period ends, the plan will pay...
The balance of the guaranteed period in a lump sum
50%, 60%, 66 2/3%, 75% or 100% of your pension, depending on the elected percentage
No more benefits in the event of your death
50%, 60%, 66 2/3%, 75% or 100% of your pension, depending on the joint and survivor percentage elected.
And after the guaranteed period, the plan will pay ...
Life Events • If you leave Concordia before age 55: – You will be entitled to a deferred retirement pension payable at age 65, or – You can transfer the value of your pension to: • a prescribed retirement savings arrangement; • another registered pension plan, if that plan accepts it; or • an insurance company to purchase a life annuity.
Life Events • If you leave Concordia after age 55: – You will be considered to be retiring from the University. In this case, you will be entitled to an immediate lifetime pension.
• If you die before retirement : – Your beneficiary will receive the value of your pension in a lump sum.
Life Events • If you die during retirement : – Benefits, if any, will be payable according to the form of payment chosen upon retirement.
Government Plans • Quebec Pension Plan (QPP) – Lifetime retirement income, based on age and income. – Payable at age 65 – Payable at age 60 with reduction and must meet eligibility requirements – www.rrq.gouv.qc.ca
Government Plans • Old Age Security (OAS) – Lifetime flat-rate pension – Payable at age 65 – Clawed back if net income exceeds a certain level ($67,668 in 2011) – www.servicecanada.gc.ca/eng/isp/oas/oastoc.shtml
Useful information • Annual Pension Statement • Annual Information meeting • HR website – www.concordia.ca/hr/
• Pension@ccess website – concordia.pension.hroffice.com