The value of your benefit

Have you been wondering about the value of the benefit you have in the CAAT Plan?

The Plan's contribution rates are certainly not small, and neither are the Plan's funding challenges. But your defined benefit plan has a number of advantages.

In the CAAT Plan, your benefit is defined up front: your pension is calculated with a formula, and the determining factors are your earnings and your service. Investing the funds successfully is the job of the people who run the Plan. You have no direct investment risk, and no decisions to make about what kind of investments to be in, as you would if you were in another kind of plan such as a defined contribution plan.

What value do you get in the Plan?

This graph represents an average member, retiring in 2010, at age 62. She's contributed $73,200 to the fund   over the course of her 21 years of employment. Her highest average earnings - the average of her earnings over the course of the 60 months that they were at their highest - are $63,000.

So, her pension for life is about $20,000 per year. She will receive increases under the Plan's inflation   protection provisions, and she will receive an additional annual payment of $6,400 - called the Bridge Benefit -   until reaching age 65.

By the time she reaches age 65 and the Bridge Benefit is removed from her payment, she will already have received $79,800 more than she paid in contributions.

The average Canadian lives to about age 80, at which point she or he will have received $382,800. Our members tend to live about 5 years longer, to age 85. At this point, our member will have received $483,800.

Not bad for an investment of $73,200.