The CAAT Pension Plan
The CAAT Pension Plan, also referred to as CAAT, the CAAT Plan or the Plan, is a not-for-profit trust dedicated to providing secure and sustainable defined benefit (DB) pensions.
CAAT is a Jointly Sponsored Pension Plan (JSPP), which means representatives of members and employers have an equal say in decisions made about benefits, contributions, and funding under the pension plan. This joint governance structure is recognized internationally as a model for success in keeping defined benefit pension plans sustainable.
The size of the CAAT Plan also makes the Plan more efficient than administering a single employer plan, because the Plan is not dependent on the health of a single employer. With an experienced team of pension experts administering the Plan and a history of successful investment returns, CAAT members can rest easy knowing that their lifetime DB pension is secure.
CAAT Contact Centre
You can call CAAT at 416-673-9000 (GTA) or 1-866-350-2228 (toll-free) or send an email to member@caatpension.ca with your questions and inquiries.
My Pension Member Portal
Once enrolled, you’ll also have access to a secure, online member portal called My Pension. Through the portal, you can view your annual statements online, manage your contact information easily, and receive an estimate by using retirement planning tools. You’ll also be able to send secure messages to CAAT Pension Plan staff.
The DBplus plan design
DBplus is an innovative modern pension plan design from the CAAT Pension Plan that provides members like you with a lifetime pension in retirement. You and Ford Motor Company of Canada will both contribute to the CAAT Plan, helping you build a secure, sustainable retirement income.
See question 5 below for your applicable effective date.
The effective date is when Ford employees will be enrolled in the CAAT Pension Plan and begin making contributions to DBplus and earning a pension in the Plan.
For hourly employees, their effective date is December 30, 2024. For salaried bargaining unit employees, their effective date is January 1, 2025.
Yes. Enrolment is mandatory for eligible Ford employees as defined above.
No. You will start earning a pension as soon as contributions are made to DBplus and your pension will be vested immediately. This means you are entitled to receive a benefit from the CAAT Plan based on the DBplus pension formula.
Your DBplus pension is calculated using a formula, so you know what your annual pension will be when you retire.
The formula is made up of two parts:
a) Annual Base Pension: The annual base pension is calculated at the end of each year that you contribute. The pension formula adds your contributions plus the contributions your employer makes on your behalf and multiplies them by a pension factor of 9.5%1.
b) Conditional Average Industrial Wage (AIW) enhancements: At the start of each year in which you are a contributing member, AIW enhancements are applied to the total pension you earned in DBplus to the end of the previous year, subject to the CAAT Plan’s Funding Policy. Calculated by Statistics Canada, AIW represents the growth in wages over time. Any amount that has been granted is a permanent increase to your pension that will not be reduced.
To learn more about the funding policy visit the Funding page on CAAT’s website.
1 The annual pension factor is subject to the CAAT Pension Plan
Yes. The annual pension factor is subject to change based on the CAAT Pension Plan Funding Policy. The Plan is currently within Level 5 of the Funding Policy, and starting on January 1, 2025 the pension factor will be 9.5%.
Accrued benefits are protected and cannot be reduced while the Plan is ongoing. Changes to the pension factor are not retroactive – they would only apply on a go-forward basis to contributions received after the new pension factor goes into effect. To learn more about the CAAT Pension Plan Funding Policy visit the Funding page on the CAAT website.
Conditional inflation protection comes in two forms for DBplus pensions: Average Industrial Wage (AIW) enhancements and indexation.
AIW enhancements grow DBplus pensions while a member works. At the start of each year, an AIW enhancement is applied to the total DBplus pension earned up until the end of the previous year. These annual AIW enhancements are based on the year-over-year percentage increase in Canada's AIW index, measured from July 1 to June 30.
In retirement, conditional inflation protection increases (or pension indexation) will be applied to pensions in pay to help protect the purchasing power of your pension. Inflation protection is applied annually at the beginning of each year. It is currently applied at a rate of 75% of the year-over-year change in the average Consumer Price Index (CPI) – capped at an annual increase of 8%.
Both the AIW enhancement and indexation are conditional on the funded status of the CAAT Pension Plan based on its Funding Policy. They are cumulative, meaning, once granted they cannot be taken away. The funded status of the CAAT Pension Plan is very strong. Based on the most recent valuation as of January 1, 2024, the Plan is 124% funded on a going-concern basis, with a $5.3 billion funding reserve. As a result, conditional inflation protection has been approved through 2027.
Total employee and employer contributions to DBplus each calendar year are subject to Income Tax Act limits. This means contributions are capped at the Money Purchase limit, which is $33,810 for 2025. The Money Purchase limit increases each year and is published by the Canada Revenue Agency (CRA). Employee and employer contributions are also subject to a cap of 2,080 compensated hours per calendar year.
You can use a customized DBplus Pension Estimator that has been developed for Ford Motor Company of Canada employees to see the starting annual pension at retirement and the value over your lifetime in retirement.
While your contributions do not reduce (on a dollar-for-dollar basis) your RRSP contribution room, the pension benefit you are building up under the Plan does. The Income Tax Act limits tax-deductible contributions to your RRSPs to 18% of your previous year's earned income, minus the pension adjustment. A pension adjustment is the deemed value of the pension benefit earned by a member each tax year.
Visit the CRA website for a summary of contribution limits. Please consult with your financial advisor to ensure your RRSP contributions are within the limits outlined by the CRA.
CAAT launched the GROWTHplus Investment Account on October 1, 2024. The GROWTHplus Investment Account is an optional savings account for CAAT Pension Plan members to grow their tax-sheltered retirement savings and benefit from CAAT’s investment returns.
Once you are enrolled in the CAAT Plan, you can initiate a transfer to GROWTHplus from an existing tax-sheltered Canadian savings account, such as an RRSP, RPP, or a LIRA. There is no limit to the amount of funds you can transfer into your GROWTHplus account. You can transfer-in as often as you would like, up until the end of the year you turn 70, provided you are a resident of Canada for income tax purposes.
With GROWTHplus, Plan members can build more financial flexibility into their retirement planning, together with the secure lifetime pension they already have with CAAT. GROWTHplus does not replace or change the pension members earn or receive from the CAAT Plan. To learn more information about GROWTHplus visit the GROWTHplus page on CAAT’s website.
Benefit Security
The CAAT Pension Plan is a highly respected industry leader that has been delivering secure, lifetime pensions for over 50 years. Joint governance by member and employer representatives keeps the CAAT Plan’s focus on benefit security, equity, and long-term sustainability.
The Plan must file a valuation with the pension regulator at least every three years that shows it can pay promised pensions. Already earned pensions, including granted enhancements, can never be reduced while the Plan is ongoing, even if the Plan’s funded ratio were to fall below 100%. If Plan funding were to start to decline, the Funding Policy provides a roadmap to gradually reduce the enhancements to be earned on future service. However, the funded status of the CAAT Pension Plan is very strong. Based on the most recent valuation as of January 1, 2024, the Plan is 124% funded on a going-concern basis, with a $5.3 billion funding reserve.
There is no change to your pension when market conditions fluctuate. DBplus provides secure predictable lifetime pensions that are not tied to current market conditions (which is very different than DC and RRSP plans).
CAAT’s team of investment professionals oversees the Plan's investment strategy as set out in its Board of Trustees-approved investment policies. They select investment management firms, funds, and co-investments that meet CAAT’s criteria and quality standards, and they monitor performance against targets for both returns and risk.
Comprehensive information – including investment strategy, investment policies, responsible investing, information about asset mix and performance, and the investment team – can be found on the website in the Investments section and in the Plan’s Annual Report.
Conservatism is built into the plan design and the Funding Policy, which suggests that over the longer term the Plan’s funding health should continue to improve. All of CAAT’s asset-liability models demonstrate this expected trend.
A decrease in funding levels will not impact past benefits already earned. Accrued benefits, including enhancements, once granted, can never be reduced while the Plan is ongoing. The CAAT Pension Plan Funding Policy defines six levels of Plan financial health and sets guidelines for the Plan governors to use reserves and conditional benefits to manage through periods of volatility, to keep the Plan sustainable over the long term to secure benefits while balancing fairness across the membership.
As the Plan increases its reserve levels (i.e., as it rises through the levels in the Funding Policy), the rate of accruals under DBplus can increase or other enhancements could be provided. Similarly, if reserve levels decrease, future benefit accrual rates may be temporarily scaled back –You can see the Funding Policy summary and read more on how the policy impacts various benefit features on CAAT’s website.
Retirement Flexibility
Yes. DBplus offers flexible early retirement options as early as age 50. If you decide to retire and start your pension early a reduction will apply for each year you are away from the normal retirement date of age 65. This reduction to your pension reflects the fact that you will be receiving a lifetime pension for a longer period of time.
If you elect to start your pension within your extension of membership period (defined as 24-months from the date you terminated employment and last made contributions to the Plan), and before age 65 an early start adjustment will be applied. The reduction rate is currently 3% for each year you are away from age 65. This adjustment is dependent on the Plan’s funding level and can be between 3% and 5%. As a comparison, the Canada Pension Plan (CPP) reduces pensions by 7.2% per year that pension commencement is away from age 65.
If your extension of membership has expired, and you chose to keep a deferred pension in the Plan, should you elect to start your pension early it will be reduced by 5% for each year you are away from age 65. If you start your pension at age 65, no reduction is applied.
You can continue working and contributing to the Plan past age 65 without any interruption to your membership. You would simply continue to work, make contributions to the Plan, and watch your pension grow. However, pursuant to the Income Tax Act, by November 30 of the year in which you turn 71, you will have to stop contributing to the Plan and start collecting your pension by December 1 of that year, even if you continue working.
Survivor Benefits
With CAAT’s DBplus plan design, not only do you receive a predictable lifetime pension, but you also receive valuable survivor benefits, which includes a lifetime pension for an eligible surviving spouse equal to 60% of your pension at the time of your death, plus conditional inflation protection and pre-retirement death benefits.
For more survivor benefit information visit Survivor Benefits on the CAAT website.
Termination Benefits
All CAAT Pension Plan members are entitled to a pension at retirement. If you leave your employment, you will have choices to make about the pension you earned during your membership. When you terminate employment before your normal retirement date, your membership in the CAAT Pension Plan is automatically extended for 24 months from the date you last made contributions to the Plan. During the 24-month membership extension, you may be eligible to resume contributions at another CAAT-participating employer or transfer your pension to a non-CAAT employer’s pension plan.
At the end of the 24-month period, you gain additional options, including keeping your pension in the CAAT Plan or transferring the commuted value of your benefit out of the Plan provided you are not eligible for an immediate pension. If you are eligible for an immediate pension, you may start your pension at any time during or after the 24-month period. For more information see: Leaving your job.
You can transfer the commuted value of your benefit out of the CAAT Plan to another employer’s pension plan if that plan will accept the transfer. You can do this during the 24-month extension of membership period or afterwards, provided you have not started your pension and are under age 65.
You may also be able to transfer the lump sum commuted value of your pension to a registered locked-in retirement account at the end of your 24-month membership extension period. In order to exercise this option, you cannot be retirement-eligible at the end of your 24-month extension of membership period. This transfer option will be available for 6 months following the end of your extension of membership period. After that the option is not available.
Purchasing Additional Pension
Once you are enrolled in DBplus, you may be able to purchase additional DBplus pension if eligible under applicable pension and tax law, and under your employer’s plan. In general, you may be able to purchase additional pension in DBplus if you have an eligible period of employment with:
Only funds from a registered retirement vehicle (e.g., LIRA, RRSP) can be used to purchase this additional pension in DBplus. The amount a member can contribute for a purchase is limited by the Income Tax Act to 18% of cumulative T4 earnings (excluding taxable benefits) for a pre-enrolment period being purchased.
When members are enrolled in DBplus, they receive additional information about the Plan including a member handbook and detailed steps for purchasing additional pension. CAAT also provides educational sessions on this option. CAAT will send you more information about pension purchases after January 1, 2025.
Once you’re enrolled in DBplus, you can purchase additional pension in DBplus so long as you have an eligible period of employment to purchase and you are an active member of the Plan at the time of your purchase request.
Yes. Your purchased pension grows with the same conditional AIW enhancements as your regular pension while you are actively employed. Once retired, your purchased pension will grow with the same conditional inflation protection as your regular pension (75% of CPI).