A valuable retirement income
As a CAAT Pension Plan member you can count on a predictable lifetime pension – based on your earnings and years of service – without the worry of complex investment decisions or the possibility of outliving your savings.
When you retire, your pension will be calculated using your “best five” years of earnings – the 60 consecutive months your earnings were highest. This helps maximize your pension by using the highest earnings during your membership in the calculation. The formula also uses all your years and months of service, so the longer you work in the college system, the more your pension grows.
Choosing the right time to retire might be something you’ve already worked into your retirement plan, or it might be something you’re just starting to think about now. The Plan offers flexibility to choose the retirement date that fits your personal goals. We offer a variety of early retirement benefits and options that allow you to choose the best time to stop working and start collecting your pension.
Saving for your future
Meet Charles, a 28 year old who recently started a full time position at his college following graduation. Charles and his girlfriend are looking for a new home, and are saving up for their wedding next year.
Although Charles was thrilled to land the job, he’s not happy about having to join the pension plan. His parents have told him that he’s lucky to belong to a defined benefit plan. But Charles doesn’t know why should he worry about retirement when it’s years away! He finds the contributions to be high and he could really use more of his paycheque for his current expenses and his upcoming projects. And anyway, if he changes jobs someday, won’t he just lose all of the contributions he’s already made?
Belonging to the CAAT Plan means that Charles can build a foundation for retirement, without having to worry about investments and market performance. Since his employer matches his contributions, he’s really investing twice as much as he’s paying.
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Charles doesn’t have to be concerned about losing his contributions. If he leaves his job - his pension leaves with him, either in the form of a refund of his contributions (if he’s not vested) as a transfer to another employer’s pension plan, or locked in retirement arrangement. Charles may also decide to leave his pension in the Plan and start collecting his worry-free pension, even if he retires from another employer!
Although Charles is many years from retirement, now is the best time to start planning for his future. Many Canadians don’t start to save for retirement until later in life, and Charles’ mother has often reminded him that he’s wise to be starting so early. Of course, his immediate financial needs are important, but he has to consider that at some point in his future, he will want to stop working and enjoy a comfortable retirement. His CAAT Plan pension will help him do just that.
Valuable early retirement features and options
Features
- You can retire as early as age 50 if you have at least 20 years of service.
- Early retirement eligibility for everyone is available at age 55 as long as you have more than 2 years of service.
Options
- An early retirement pension will be unreduced if you meet certain age + service criteria:
- If you’re age 60 with 20 or more years of service, you meet the criteria for the 60/20 Rule and your pension will be unreduced.
- If you age + service = 85 points or more, you’ve hit the 85 Factor and your pension will be unreduced.
- If you do not meet these age and service criteria when it’s time to retire, your pension will be reduced by only 3% / year for each year that you are away from achieving the earliest of these criteria, or age 65.
No matter if your early pension is reduced or unreduced, you’ll receive an additional pension called a ‘bridge benefit’ paid until you’re 65.