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Words from A - D
Actuarial Present Value
What a Member's deferred pension is worth today in a lump sum. Also known as Commuted Value.
Actuarial Valuation
An analysis of the financial condition of a pension plan which calculates the liabilities of the plan and costs of providing plan benefits. An actuary prepares the valuation and the pension plan must file the valuation with the provincial government at least once every three years.
Actuary
A business professional who is a member of the Canadian Institute of Actuaries (CIA) and is responsible for preparing and signing valuations. Actuaries apply their knowledge of mathematics - particularly of probability, statistics and risk theory - to real-life financial problems involving future uncertainty, usually associated with life insurance, property and casualty insurance, annuities, pensions or other employee benefit plans.
Annuity
A series of regular, periodic payments, including a pension. An annuity is normally purchased from a life insurance company which then pays the purchaser a series of regular (usually monthly) payments. An individual usually purchases an annuity by making a lump sum payment from an RRSP or other source to the insurer.
Assets
Plan assets refer to all contributions and investment earnings in the pension fund.
Average YMPE
The average of the Year's Maximum Pensionable Earnings for the earlier of the year of retirement or termination, or the year in which the Member stops contributing to CPP, and the four preceding years. The YMPE is the maximum amount of earnings on which the Member contributes to the CPP as set by CRA for CPP effective January 1 each year.
Beneficiary
The person or persons designated in writing to receive any lump sum death benefits payable under the CAAT Pension Plan. If the Member has a Spouse, that person is the Beneficiary, as long as the two are not living separate and apart.
Bridge Benefit
An extra pension payable from the CAAT Pension Plan from a Member's early retirement date up to age 65. The Bridge Benefit approximates the amount of CPP that is earned while a Member of the CAAT Pension Plan. The Bridge Benefit is also indexed at the same rate as the Lifetime Pension. Indexation granted to the Bridge Benefit ceases, along with the Bridge Benefit itself at age 65.
CAAT Pension Plan
The Pension Plan that has been established for the employees of Ontario Colleges. Employees of the Ontario College Application Service (OCAS) and the CAAT Pension Plan also participate.
Canada Revenue Agency (CRA)
The Canada Revenue Agency (CRA) administers tax laws for the Government of Canada and for most provinces and territories. It provides tax-sheltered mechanisms through the Income Tax Act for individuals saving for retirement, and sets maximum standards for the benefits a plan can provide.
Children
The dependent Children of the Member, who have not reached the age of 18, subject to the requirements of the Income Tax Act.
College
An Ontario College body, established under the Ontario Colleges of Applied Arts and Technology Act (2002), that participates in the CAAT Pension Plan.
Common-Law Spouse
The person who, although not legally married to the Member, Former Member or Pensioner, has been living with him or her as a couple for at least one year, or for a shorter period if there are natural or legally adopted children of the common-law relationship.
Commuted Value
What a Member's deferred pension is worth today in a lump sum. Also known as Actuarial Present Value.
Consumer Price Index (CPI)
An inflation measure computed by Statistics Canada which calculates the change in prices of a fixed basket of commodities purchased by Canadians each month. If the combined cost of these goods goes up, inflation increases. The Consumer Price Index is used to calculate annual cost of living increases for pension benefits, also referred to as Indexing.
Contributory Earnings
The earnings on which a Member pays pension contributions; they may not be the same as the Member's actual income or "earned income" for income tax purposes since overtime pay, certain lump sum or other payments, and most lump sum termination payments are excluded from Contributory Earnings.
CPP
Canada Pension Plan. The CAAT Pension Plan contribution and benefit formulas are integrated with CPP, which means that the contributions and the pension take into account that the Member was also contributing to CPP while working. A retired Member who qualifies can choose to receive a CPP pension as early as age 60 on a reduced basis. A retired Member will receive a Bridge Benefit payment from the CAAT Pension Plan up to age 65, regardless of when the Member begins a CPP pension.
Credited Interest
The interest credited each year on Member contributions.
Credited Service - See Pensionable Service
Deemed Contributory Earnings
The earnings a Member would have received had the Member's workload not been reduced or if the Member had not been on leave. The Deemed Contributory Earnings may be increased by:
- negotiated increases
- increases resulting from normal progression through job classification, or
- increases obtained through a grievance procedure.
For a Member entitled to the disability benefit under Section 11.01 of the CAAT Pension Plan, the Deemed Contributory Earnings are based on the normal annual rate of earnings on the last day such earnings were received. In addition, this rate is increased each January 1 that the Member remains entitled to the disability benefit by the following percentage rates:
- up to December 31, 1987, 5% for each full calendar year the Member remains disabled
- for the period January 1, 1988 to December 31, 1991, the same percentage increase that was granted to Pensioners in the previous year
- for the period after December 31, 1991, the same percentage increase that is granted to Pensioners for pensions accrued after December 31, 1991.
Deemed Contributory Earnings may be used in determining the Highest Average Pensionable Earnings.
Deferred Pension
The pension calculated at the time of termination of employment and payable at age 65 that will only be provided at a later date because the Member:
- is not old enough to begin immediate pension payments; or
- chooses to wait until a later date to begin receiving pension payments.
Deficit
A deficit exists in a pension fund when the actuarial valuation determines the fund's assets are less than the liabilities.
Defined Benefit Pension Plan
The pension received is determined by a defined formula usually, but not always, based on a combination of earnings and years of Pensionable Service. The CAAT Pension Plan is a Defined Benefit Plan.
July 2008
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