Pre retirement seminar presentation

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Pre retirement seminar presentation

  1. 1. The United Church of Canada 2012 Pre-Retirement Seminar
  2. 2. Your Pension Plan: What is a Defined Benefit Plan? <ul><li>In Canada, there are two types of pension plans: Defined Benefit (DB) plans and Defined Contribution (DC) plans. </li></ul><ul><li>The United Church’s pension plan is a DB plan. There is a formula to determine how much you will receive per month upon your retirement. This means your monthly pension amount is more certain. </li></ul><ul><li>In contrast, members who participate in a DC plan will not know until retirement how much money they will have. The member invests their contributions and their employer’s contributions, and therefore, the member assumes the investment risk. </li></ul>
  3. 3. Your Pension Plan: Who Is Eligible and How Are Contributions Calculated ? <ul><li>Participation in the pension plan is mandatory for all staff working, on average, 14 hours or more per week. Providing you remain an active member of the plan, you may continue to contribute into the pension plan until age 71.* </li></ul><ul><li>Contributions into the pension plan are determined based on your pensionable earnings. Pensionable earnings for lay staff are 100% of salary, pensionable earnings for ministry staff are 140% of salary. </li></ul><ul><li>Currently, your employer contributes 7% of your pensionable earnings into the pension plan, and you contribute 4% of your pensionable earnings. </li></ul><ul><li>The next slide will provide an example of how to calculate annual contributions. </li></ul><ul><li>*Federal legislation requires you to start drawing a pension December 1 st of the year in which you turn 71. </li></ul>
  4. 4. Your Pension Plan: Calculating Your Contributions <ul><li>Example for Lay Members: </li></ul><ul><li>If your salary is: $30,000/year </li></ul><ul><li>Your pensionable earnings are: $30,000/year </li></ul><ul><li>Your employer will contribute: $ 2,100/year </li></ul><ul><li>You will contribute: $ 1,200/year </li></ul>
  5. 5. Your Pension Plan: Calculating Your Contributions <ul><li>Example for Ministry Personnel: </li></ul><ul><li>If your salary is: $40,000/year </li></ul><ul><li>Your pensionable earnings are: $56,000/year </li></ul><ul><li>Your employer will contribute: $ 3,920/year </li></ul><ul><li>You will contribute: $ 2,240/year </li></ul>
  6. 6. Your Pension Plan: How Do You Calculate Your Pension Benefit? <ul><li>Currently, you accrue a pension credit of 1.7% of your pensionable earnings in each year you contribute to the plan. </li></ul><ul><li>If you would like to determine what your pension benefit will be at retirement, please refer to your annual pension statement, which is mailed to you in June of each year. </li></ul><ul><li>You may also go online: http://ybrcanada.hewitt.com/ucc and use the Retirement Estimate tool in the Pension section of the site to estimate your pension benefit at various retirement dates. </li></ul>
  7. 7. Your Pension Plan: When Should You Retire? <ul><li>The “normal” retirement age is 65. You can retire at 65 and collect your normal pension amount or </li></ul><ul><li>You can elect to retire early, once you reach age 55. Your normal pension amount would be reduced to reflect your early commencement of pension payments or </li></ul><ul><li>You can elect to postpone your retirement to a date after age 65 but no later than the December of the year in which you turn 71. Your normal pension amount would be increased to reflect your delayed commencement of pension payments. Note: You can take an early unreduced retirement at age 60 if you have 35 years of service. </li></ul>
  8. 8. Your Pension Plan: What Forms of Pension Are Available? <ul><li>If you have a spouse* at the time you retire, you have 4 pension options available: </li></ul><ul><li>1. Member Pension (15 year guarantee): Under this option your spouse must waive his/her pension entitlement. You would receive your accrued monthly pension benefit, but upon your death, your spouse would not receive a monthly pension. If you die before the pension has been paid for 15 years, the balance of the guarantee period will be paid to your beneficiary. </li></ul><ul><li>2. Joint and 2/3 Survivor Pension (5 year guarantee): Under this option you will receive your accrued monthly pension benefit for your lifetime, and your spouse would receive 2/3 of your monthly pension amount upon your death, for the rest of his/her life. If you and your spouse die before the pension has been paid for 5 years, the balance of the guarantee period will be paid to your beneficiary.** </li></ul><ul><li>* Spouse: Your legal spouse by virtue of religious or marriage ceremony, or your common law or same gender partner with whom you have been in a conjugal relationship with for at least 12 consecutive months. Note: This definition varies by province. **However, if you die before the guarantee period ends, your spouse would receive your full monthly pension payment for the remainder of the guarantee period, after which, the monthly payment would be reduced to the 2/3rds. </li></ul>
  9. 9. Your Pension Plan: What Forms of Pension Are Available? <ul><li>3. Joint and Level Survivor Pension (5 year guarantee): Under this option you will receive your accrued monthly pension benefit for your lifetime, and your spouse would receive 100% of your monthly pension amount upon your death, for the rest of his/her life. If you and your spouse die before the pension has been paid for 5 years, the balance of the guarantee period will be paid to your beneficiary. Note: Your monthly pension payable will be lower than Option 2 to account for the 100% survivor benefit. 4. Joint and 2/3 Survivor Pension (10 year guarantee): This is the same as the second option, but if you and your spouse die before the pension has been paid for 10 years, the balance of the guarantee period will be paid to your beneficiary. Note: Your monthly pension payable will be lower than Option 2 to account for the extended guarantee period. </li></ul>
  10. 10. Your Pension Plan: What Forms of Pension Are Available? <ul><li>If you do not have a spouse at the time you retire, there is one form of pension: 1. Member Pension (15 year guarantee): You will receive your accrued pension benefit. If you die before your pension has been paid for 15 years, the balance of the guarantee will be paid to your beneficiary. </li></ul>
  11. 11. Your Pension Plan: Are There Integration Options Available? <ul><li>If you have a spouse and elect Option 1 or Option 2 or if you do not have a spouse at the time of retirement, you can elect to integrate your pension with Old Age Security (OAS). This is called the “integrated pension option”. </li></ul><ul><li>What this means is that you will receive a higher monthly pension payment up to age 65 (when you would be eligible to collect OAS) and then you will receive a lower monthly pension payment after age 65. </li></ul><ul><li>The pension payment after age 65 will not be less than one half of the pension you received before age 65. </li></ul><ul><li>The purpose of this integrated pension is to smooth your monthly pension income before and after age 65. </li></ul>
  12. 12. Your Pension Plan: What If I Want To Take My Money Out of The Plan? <ul><li>You can elect to transfer your money as a lump sum out of the pension plan only if you are under age 55 . This is referred to as taking your “commuted value” out of the plan. However, this is not considered a retirement option, this is a termination option. Since you are removing your money out of the plan, you are considered terminated. This means you are not eligible to participate in the Pensioner Health and Dental plan, and for Ministry Personnel, you cannot return to an appointment as a Retired Supply (you could return to work after a break in service, but you would be returning as an active member and would have to contribute to the pension and benefit plans as an active member would). </li></ul>
  13. 13. Your Pension Plan: What Post-Retirement Benefits Are Available? <ul><li>If you elect to receive a monthly pension benefit, you are eligible to participate in the Pensioner Health and Dental plan. The only other benefits coverage available is a flat life benefit of $3,000. </li></ul><ul><li>For 2012, the cost of participating in the Pensioner Health and Dental plan is $59.67/month for single coverage, $120.36/month for family coverage (plus applicable taxes in Ontario and Quebec). </li></ul><ul><li>If you elect to participate in the Pensioner Health and Dental plan, the monthly premium will be deducted from your monthly pension payment. Note: Payment options are available if your monthly pension is lower than the premium required. </li></ul>
  14. 14. Your Pension Plan: Pensioner Health and Dental Plan – Coverage Levels <ul><li>There are many differences between the Pensioner Health and Dental plan and the Active Core or Active Optional Health and Dental plans. Reimbursement levels, coverage maximums and annual/lifetime maximums are lower under the Pensioner Health and Dental plan. In addition, some services are no longer considered eligible. For a detailed summary of what the Pensioner Health and Dental plan reimburses, please refer to the Benefits for Pensioners Summary of Coverage in the pre retirement seminar package or on the Church’s website. </li></ul>
  15. 15. Your Pension Plan: Pensioner Health and Dental Plan – Participation Decision <ul><li>After you have carefully reviewed the information pertaining to the Pensioner Health and Dental plan, you will have to elect to either: </li></ul><ul><li>A) Participate in the plan – which is an irrevocable decision, or </li></ul><ul><li>B) Decline to participate in the plan – which is an irrevocable decision, </li></ul><ul><li>OR </li></ul><ul><li>C) If you have coverage under another employer sponsored plan, you can waive participation in the United Church Pensioner plan, which will allow you to participate in the future should you loose your coverage under the other employer sponsored plan. </li></ul>
  16. 16. Other Pension Income <ul><li>When making your retirement decisions, don’t forget the United Church pension is only one stream of income. Government provided benefits, like the Canada Pension Plan (CPP/QPP) and Old Age Security (OAS) are important to consider. You may also have personal savings/RRSPs which you may draw on to supplement your retirement income. </li></ul><ul><li>For more information on government provided benefits, contact Service Canada at: </li></ul><ul><li>1-800-277-9914 for service in English 1-800-277-9915 for service in French or </li></ul><ul><li>http://www.servicecanada.gc.ca/eng/common/contactus/cpp.shtml </li></ul>
  17. 17. Your Pension Plan: What Survivor Options Are Available If I Die After Retirement? <ul><li>The benefits available to your spouse will be determined based upon the elections you have made at the time of retirement (see slides 8 and 9). </li></ul><ul><li>If you elected Pensioner Health and Dental coverage, your spouse will have the option to continue that coverage. </li></ul>
  18. 18. Your Pension Plan: What Survivor Options Are Available If I Die Before Retirement? <ul><li>If your spouse is eligible for survivor benefits, he/she will have the option to either elect a monthly pension or transfer the lump sum amount out of the pension plan into a locked-in retirement vehicle. </li></ul><ul><li>Note: If your spouse elects a lump sum value, he/she will no longer be eligible to participate in the Pensioner Health and Dental plan. </li></ul><ul><li>If there is no spouse, the beneficiary will receive a lump sum cash settlement, less income tax. </li></ul><ul><li>A Child pension benefit is payable for each dependent child (under the age of 18 or up to the age of 25 if attending school full time at the date of death). </li></ul>
  19. 19. Your Pension Plan: What Health and Dental Plan Options Are Available If I Die Before Retirement? <ul><li>Your spouse and/or dependent children may have the option to elect to continue the coverage that you had under the Active Health and Dental Plan (Core or Optional) for a period of 6 months following date of death. </li></ul><ul><li>At the end of the 6 month period your spouse and/or dependent children may have the option to elect to participate in the Pensioner Health and Dental Plan. </li></ul><ul><li>Or, if a survivor pension is selected your spouse and/or dependent children may have the option to elect to participate immediately in the Pensioner Health and Dental Plan. </li></ul>
  20. 20. Applying for your pension benefits <ul><li>Once you have made the decision to retire, it is recommended you contact The United Church Benefits Centre at least three months in advance of your retirement date to allow them and you enough time to complete the necessary paperwork. You may contact them at 1-866-859-5025 Monday to Friday 8:30 a.m. to 5:00 p.m. (Eastern) or online http://ybrcanada.hewitt.com/ucc . </li></ul><ul><li>It is recommended you apply for any government provided pension benefits six months in advance of when you wish to start your benefits commencement. </li></ul>

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