Leaving your job

You can keep your pension in the CAAT Plan and receive lifetime income in retirement. This is called a deferred pension. Your deferred pension is the pension you earned up to the date you terminated your employment plus more:

• After you terminate employment, your pension will continue to grow with conditional increases based on Average Industrial Wage (AIW) during the 24-month membership extension.
• You can continue to participate in, and have the opportunity to transfer existing tax-sheltered funds into your GROWTHplus Investment Account.
• After the 24-month membership extension, CAAT’s conditional inflation protection increases mean your deferred pension will continue to grow until you’re ready to collect..
• When you start your pension, you will get a payment every month for the rest of your life.
• Your CAAT pension also offers survivor benefits for your spouse.
• In retirement, your pension increases with conditional inflation protection. It’s like getting a raise – in retirement.

Not only does CAAT offer the valuable benefits Canadians want, but it is also one of the fastest growing pension plans in Canada. CAAT is an industry leader, delivering secure workplace pensions to Canadians from coast-to-coast. It doesn’t matter how far you are from retirement, your pension will be waiting for you when you’re ready to collect it.

Since the 24-month extension of membership period has now ended, Catherine’s option document from CAAT has arrived in the mail. It’s time for Catherine to make a big financial decision. She reads the option document and also consults with a financial advisor. Although Catherine has other options including taking her commuted value out of the CAAT Plan, Catherine chooses a deferred pension from CAAT. She knows that a pension from CAAT will help reduce her stress and the worry of saving for her retirement on her own. Keeping her pension with CAAT means she’ll collect a pension from a trusted source. When it comes to her CAAT pension, Catherine won’t need to worry about market fluctuations, think about investments decisions, or worry about investment fees. CAAT’s pension experts have it handled.

Each year Catherine receives an annual statement from CAAT that shows her deferred pension is continuing to grow based on conditional inflation increases. When Catherine reaches age 65, she’s ready to start the next chapter of her life and decides to retire. She sees how her CAAT pension complements her other retirement savings and government retirement plans. Now she’ll receive a CAAT pension every month for as long as she lives. In retirement, Catherine’s CAAT pension gives her a steady, predictable income stream which makes it easier to budget for her expenses. And Catherine’s pension in retirement increases with conditional inflation protection.

With advances in healthcare, Catherine knows that people are living longer but she has the peace of mind that her CAAT pension will continue as long as she lives and when she passes away her spouse will receive survivor benefits to help support their financial well-being.

• You can start collecting your deferred pension at age 65, as early as age 55, and in some cases as early as age 50 (if you are earning a pension in DBprime and you have 20 years of service, or if you are earning a pension in DBplus). If you start before age 65, your pension will be reduced by 5% per year for each year you are from age 65. This permanent reduction to your payment reflects the fact that you will receive it longer.
• If you are earning a pension in DBprime, you also receive a bridge benefit – an additional pension, payable from the early retirement date to age 65, and subject to the same reduction factor as your early retirement pension.

You can choose to transfer the commuted value of your benefit out of the Plan. The commuted value is a lump-sum payment of the ‘present value’ of a member’s earned pension. The commuted value is a one-time payment representing what your future pension would be worth today if invested at current interest rates. Commuted value assumptions and calculation methodology are prescribed by legislation.

Twenty-four months have passed since Lia left her job at an employer that participated in the CAAT Pension Plan. Recently she received her option document from CAAT. She reads the option document and also consults with a financial advisor.

Because Lia participated in DBplus and is under age 50 at the end of the 24-month extension of membership period she has six months to decide if she wants to take the commuted value of her pension out of the plan. She decides to take the commuted value, which means the funds are transferred into a locked-in retirement account. The funds in this account can only be used to provide Lia with retirement income.

Right away Lia has the stress of making investment decisions. She worries if she is making the right decisions to ensure that her money will continue to grow until she is ready to retire.

Lia continues to work for 15 more years, before she is ready to retire. During this period, she checks on her investments but realizes the lump sum of money she received from her commuted value is not growing as quickly as she hoped. Her investments are not performing as expected and the stock market can be unpredictable.

After working for 30 years, Lia is ready to start the next chapter of her life and decides to retire. Lia continued to save for retirement after leaving the CAAT Plan, but she doesn’t make consistent contributions. Based on her estimated retirement income from other retirement savings and government retirement plans, Lia is stressed about her finances. With advances in healthcare, Lia knows that people are living longer, and she worries about market fluctuations and the possibility she will run out of money. Lia is forced to be careful with her money to make sure it lasts as long as she lives.

• DBplus: You must be under age 50 at the end of the extension of membership period to choose the commuted value option.
• DBprime: You must be under age 55 at the end of the extension of membership period. However, you’re ineligible to take the commuted value if you’re between 50-55 and more than 20 years of service when you left the job.
• The commuted value is calculated at the end of the 24-month extension using the interest rates in effect at that time. You have six months from the end of your 24-month extension of membership in which to choose the commuted value. After that the option is not available.
• If you choose to take the commuted value out of the Plan, you will have to transfer the funds into a locked-in retirement account. The funds must remain locked-in and can only be used to provide retirement income. For information about the types of locked-in retirement accounts available to you, we suggest you seek independent advice from a financial advisor.
• In addition, you cannot withdraw money from a locked-in retirement account before age 55, and all funds must be withdrawn or converted to an annuity or a Life Income Fund by age 71.
• If your pension benefits are subject to federal jurisdiction, your spouse must provide consent prior to a commuted value transfer, in accordance with the applicable legislation.
• If you transfer your commuted value out of the Plan, you will receive no further benefits from the CAAT Plan. You will be entirely responsible for subsequent investment returns, including the management fees and risks associated with managing your retirement income. If your investments do not perform well, you may end up with a retirement fund that is smaller than what you had when you left the Plan. There is an additional risk of outliving your savings.