Eligible for reduced early retirement pension or commuted value transfer

NOTE: These provisions only apply to members who terminated before July 1, 2012. For terminations on or after July 1, 2012, please refer to "Termination of employment"

Definition / Eligibility:

A member who terminates and is between ages 50 and 54 and has 20 or more years of pensionable service is eligible to receive a reduced early retirement pension, a deferred pension or a commuted value transfer. Note that the commuted value transfer option will be eliminated as of July 1, 2012.

College Responsibilities:

• Send the CAAT Pension Plan a completed and signed Termination Benefit Application and any supporting documents. Be sure to check "50/20" at the top of the form.
• Confirm the information on the 50/20 Termination/Retirement Option Document received from the Plan, and forward it to the member for completion.
• If the member chooses an early retirement pension, have them complete the TD1s and provide the Plan with a void cheque.
• If the member is choosing a commuted value transfer, have them complete a CRA form T2151 and a Direction to RRSP/RPP Administrator form. College representatives can sign the second form as a witness.
• Tell the member that if they choose a commuted value transfer within six months, they will receive the amount mentioned in the Option Document plus interest to the date of payout. After the six month period, the transfer amount will be recalculated based on current actuarial cost.
• If the member is receiving a refund of excess contributions for service after 1990, or an amount above the Income Tax Act's maximum transfer limit, the amount can be taken in cash (in which case it is taxable). Alternatively, it can be paid out in the form of a temporary pension. This option will be explained on the Option Document.
• Tell the member that if the Plan is not informed of their choice by the date specified on the letter accompanying the Option Document, they will be deemed to have chosen a deferred pension.
• If a grievance is pending, the six months will be calculated after the result of the grievance is determined. The member may want to defer a decision until settlement is reached.
• If a grievance is pending, advise member that if they are reinstated after the commuted value was transferred, the commuted value together with any excess contributions plus credited interest calculated from the time the payment was received until the time it is paid back, must be transferred back in order to have the pensionable service reinstated. This includes any shortfall in the transfer amount as a result of, for example, investment administrative fees.

CAAT Pension Plan Responsibilities:

• Send a 50/20 Termination/Retirement Option Document to the college.
• If a commuted value transfer is chosen, determine if a Pension Adjustment Reversal is required.

Member Responsibilities:

• Members can get pension estimates from the Plan's website, from the college, or directly from the CAAT Pension Plan.
• Sign the Termination Benefit Application and the Option Document.
• If choosing a commuted value transfer, complete a CRA form T2151 and Direction to RRSP/RPP Administrator form.
• If choosing an early retirement pension, complete the TD1s and provide a void cheque.

Plan Text Reference: 7.01, 10.02, 10.03