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FAQ - The contribution formula and pension calculation

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The CAAT Pension Plan in general
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Pensionable Service
The contribution formula and pension calculation
Transferring service
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Termination of employment
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The Bridge Benefit
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Contributions and the pension calculation

Member Handbook -
Normal Retirement Pension
How is the normal retirement pension calculated?
How to calculate your pension
Contributions

How your contributions are determined

How we calculate your pension

How much do I contribute to the pension plan? How is it calculated?

The CAAT Plan is a contributory plan, meaning that both you and your employer contribute, each paying the same amount. You will contribute a percentage of your contributory earnings. In 2009 contribution rates are as follows:

11.1% of your Contributory Earnings below the Year's Basic Exemption (YBE), plus
9.3% of your Contributory Earnings between the YBE and the Year's Maximum Pensionable Earnings (YMPE), plus
11.1% of your Contributory Earnings over the YMPE.

Contributions to the Plan will be increasing by 1% of salary on each of January 1, 2008, 2009 and 2010. The total increase of 3% of salary applies to both Plan Members and Colleges.

Here are the new rates:

Year	Earnings to YBE	Earnings between YBE – YMPE	Earnings above YMPE
2008	10.1%	8.3%	10.1%
2009	11.1%	9.3%	11.1%
2010	12.1%	10.3%	12.1%

What are Contributory Earnings, the Year's Basic Exemption, and the Year's Maximum Pensionable Earnings?

Contributory Earnings are the earnings on which you pay pension contributions. They are based on your actual income, but do not include overtime pay, most lump sum termination payments, and certain other types of payments.

The Year's Basic Exemption and Maximum Pensionable Earnings are amounts relating to the Canada Pension Plan (CPP). The Year's Basic Exemption is the amount of earnings below which you do not contribute to CPP. The amount is currently frozen at $3,500. The Year's Maximum Pensionable Earnings is the maximum amount of earnings on which you contribute, and also the amount on which CPP benefits are based. In 2009, it is $46,300.

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What is the connection between the Canada Pension Plan and the CAAT Pension Plan?

The CAAT Pension Plan is an integrated plan. This means that the pension formula recognizes the benefits that are provided by CPP. The Plan's objective is to provide a total pension of 2% of Highest Average Pensionable Earnings for each year of service. Since the CPP benefit is equivalent to about 0.7% of that amount, the CAAT Pension Plan benefit is 1.3% up to the YMPE, the point at which CPP benefits end. Above that point, the CAAT Pension Plan benefit is 2%.

How is my pension calculated?

The formula is

1.3%	x	Highest Average Pensionable Earnings up to the Average YMPE	x	Pensionable Service
plus
2.0%	x	Highest Average Pensionable Earnings above the Average YMPE	x	Pensionable Service

"Highest Average Pensionable Earnings" is calculated as the sum of your earnings during the 60 consecutive months of Pensionable Service during which earnings were highest, divided by 60 and multiplied by 12. "Pensionable Service" is all the service for which you have contributed to the Plan. It includes purchased service and service while you were receiving a disability benefit.

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January 2009