Helping you understand your pension

Get familiar with some frequently used words in the pension world.

What does that word mean?

Have you ever wondered what that pension lingo meant or how it applied to your pension plan? We understand it may be confusing – and we’re here to help!

We’ve taken some of the most common words when it comes to explaining pensions and broken them down into simple language below.

Visit the linked pages found in the definitions below for more information on the term.

Detailed legal definitions for some of these words can be found in the Plan Text, which can be accessed at your employer’s Human Resources department or downloaded from If the information here differs from the Plan Text, the Plan Text will govern.

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

Annual Statement: as a member of the CAAT Pension Plan, you receive an annual statement with information about your pension. It summarizes how much pension you earned at the end of the previous year and how your pension has increased since your previous statement.

Canadian Pension Plan (CPP): is a federal government retirement program that provides you with a monthly taxable payment to help supplement your income in retirement. This payment is made to CPP eligible individuals who are at least 60 years of age and contributed to the CPP during their employment.

Contributions: the amount of money deducted from your paycheque that goes towards building your pension. Your employer also makes contributions, increasing your investment in your future.

Contribution Rate: is the percentage of your eligible earnings you contribute to building your CAAT pension.

Commuted Value: is the lump sum dollar value of the pension you have earned in a pension plan, expressed in today’s dollars.

Defined Benefit Pension: a type of pension plan – like CAAT’s! – that provides you with a predictable retirement income that you receive each month for life. The pension is calculated using a formula, so you know how much you’ll receive before you retire.

Designated Beneficiary: is any individual you choose to receive any applicable death benefits if you don’t have an eligible spouse or eligible children when you die.

Joint governance model: is a pension plan administration model (and one that CAAT uses!) where both members and employers equally share the risks and responsibilities of the plan.

Modern defined benefit pension: a defined benefit pension, like CAAT’s, which adapts to a variety of workplace needs. It has a joint governance structure and a strong funding policy.

My Pension: CAAT’s secure portal for you to view and manage information about your pension including things like your annual statements, your personal information, confidential documents and more.

Pension Estimate: A projection of how much your pension could be if you continue to work with a CAAT participating employer until you retire. It’s based on a lot of assumptions about your future e.g. how much you will earn from your employer. It’s to help you plan, and you can estimate your pension anytime on My Pension.

Pension: A pension is like a paycheque that you get when you retire. Your CAAT pension is paid every month after you retire, for the rest of your life.

Pension or Service Purchase: is a way to fill in gaps for periods of eligible employment that you weren’t contributing to a pension plan. When you make a purchase you “buy back” that gap and that purchase increases the pension you receive in retirement.

Retirement: occurs when you leave the workforce and begin collecting your pension. As a CAAT member, you have flexibility to choose when it’s time to retire.

Spouse: is the person who you are legally married to or in a common law relationship with, as defined by your jurisdiction of employment.

Stages of Membership: An individual who participates in the CAAT Pension Plan who is entitled to a payment from the Plan now or will be in the future. There are different stages of membership. You’re an active member if: you’re working and contributing to the CAAT Plan, or you are in the ‘extension of membership’ period. You’re a former member if: you left your job with a CAAT employer and deferred your CAAT pension to be collected at age 65. You’re a retired member if: You are currently collecting your CAAT pension.

Survivor benefits: When you die, CAAT pays a pension to your eligible surviving spouse. Plus, there may be other benefits available. We refer to all of these as survivor benefits.

Year’s Maximum Pensionable Earnings (YMPE): The YMPE is a CPP limit used to calculate your contributions to the Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) in any given year. This limit is also used to calculate your DBprime contributions and pension.