Who should read this page?
This page is for members who are earning a pension in DBplus, and who work for an employer that participates in both DBprime for full-time employees, and DBplus for part-time or contract employees (participating employers in the Ontario college system, the Royal Ontario Museum, and the Youth Services Bureau).
Designed to meet the unique needs of members who work part time or on contact (also known as other than regular full-time, or OTRFT employees), DBplus is a defined benefit (DB) pension plan design with a fixed contribution rate for members, matched by employers. As a member of the CAAT Pension Plan who works part time or contract, your DBplus lifetime pension is based on your actual earnings each year.
The focus of DBplus is on maximizing your lifetime pension and providing similar value per contribution dollar as DBprime.
Your pension under DBplus includes the valuable features members want: a secure lifetime pension in retirement, plus conditional inflation protection, plus survivor benefits.
Part time or contract employees who haven’t joined the CAAT Plan have the option to join DBplus by the CAAT Pension Plan at any time during employment.
Are you an employer, a representative of a member group, or an employee of an organization interested in joining the Plan’s DBplus design?
Visit www.dbplus.ca for resources that will help you decide if DBplus is right for your organization. You'll also find the DBplus Value Tool, which lets prospective members estimate the lifetime retirement income they can earn in DBplus.
What are the advantages of DBplus for members?
DBplus is designed to maximize the lifetime pension you can earn. Watch the video to learn about the advantages beyond the secure, defined benefit pension that DBplus provides to members.
Benefits of DBplus
Your defined benefit pension from DBplus is based on your contributions: the more you earn, the greater your contributions - and in turn, the higher your lifetime pension. It's that easy.
You receive pension payments every month in retirement, for the rest of your life. If you were a member of the CAAT Pension Plan before joining DBplus, the pension you earned will continue to increase alongside your DBplus pension for as long as you are a contributing member. Based on the Plan’s funding level, your total pension receives an annual increase based on the Average Industrial Wage (AIW) index. When granted, each AIW enhancement becomes a permanent part of your promised pension.
When you retire, your total pension will be made up of the pension you earned in DBplus, plus the total AIW enhancements applied to it. It will also include the pension you earned in the CAAT Plan (under DBprime) prior to joining DBplus, if applicable.
As a member of the CAAT Plan, you enjoy the benefits of membership in a sustainable, secure, defined benefit pension plan with a strong governance structure and solid investment program.
Watch the video to learn how DBplus member’s contributions work to provide a secure lifetime pension and other valuable benefits.
Contributions in DBplus
Employer matching contributions increase your pension: You contribute a fixed 9% on your total earnings, including overtime earnings, and your employer matches your contributions. Visit the Contributions page to learn how your tax-deductible contributions make it easy to build a stable, predictable retirement income.
Increasing your pension with purchases or transfers
The CAAT Pension Plan allows members to purchase eligible periods of employment to consolidate a bigger pension. This means all of the pension you earn is backed by the CAAT Plan’s strong funded ratio and solid investment performance.
If you worked part time or on contract with a participating employer before you joined the CAAT Pension Plan, you may be able to purchase the pension in respect of this period. You also have the opportunity to purchase the pension you previously earned in a Canadian registered pension plan, including defined benefit and defined contribution plans. A purchase is a great way to increase your DBplus pension and consolidate your retirement income, so you can collect it from one source at retirement.
Using the DBplus Estimator, you can estimate your pension, and see the impact a pension purchase would have on your retirement income.
Five things to know about DBplus purchases:
- Use the DBplus Estimator to help you decide if a purchase is right for you.
- You can use the Estimator as often as you want, and there is no obligation to make a purchase.
- Purchases can be made at any time until you either leave your job, or retire with an immediate pension.
- The value of the purchase will be calculated at the time the purchase is made.
- The funds for your purchase must come from a registered retirement vehicle, such as an RRSP.
Planning your retirement
Your DBplus pension is calculated using a formula, so you know what your annual pension will be when you retire.
How much will you get - the DBplus pension formula
- The pension formula is divided into two components.
- Guaranteed annual base pension (payable from age 65)– calculated at the end of each year.
- AIW Enhancements – applied at the start of each year.
- Guaranteed annual base pension
- The promised pension earned in the current year, calculated at the end of each year you contribute, using your total contributions, and your employers matching contributions.
- The formula uses a pension factor as a multiplier to calculate your pension. It is set based on the Plan’s Funding Policy and is currently 8.5%.
- 8.5% x year’s total contributions* = your guaranteed base pension.
*Note that the year’s total contributions are the member's plus your employer’s matching contributions, doubling the value of your pension.
- AIW enhancement
- This is the amount added to the previous year’s total promised pension. It is applied at the start of each year in which you are a contributing member, subject to the Plan's Funding Policy and is based on the announced increase to the Average Industrial Wage (AIW) index.
- The AIW index represents wage inflation in Canada, which has averaged about 2.2% over the past 20 years.
- AIW enhancements, once added, become a permanent part of your promised pension. That means that the AIW enhancements are cumulative – each year’s enhancement is paid on top of the previous year’s total pension, plus enhancements.
- DBplus past promised benefits** x AIW enhancement rate.
**Past promised benefits accrued to the end of the previous year, including any past AIW enhancements
When can you retire?
Under DBplus, you can retire at age 65 with an unreduced pension, or retire as early as age 50, with an early start adjustment. The adjustment rate varies from 3% to 5% based on the Plan’s funding level. Initially, the reduction rate for retirements has been set to 3% for each year you are under age 65. The actual rate will depend on the Plan terms in effect at your retirement.
Your pension continues to grow if you keep working after age 65.
Estimating your pension
The DBplus Estimator, lets you estimate your combined pension from DBprime and DBplus, at any retirement date you choose.
Here's an example of how your DBplus pension could grow over time
Phillip is an OTRFT member of the CAAT Pension Plan and earned a pension of $2,500 per year in the current plan design before moving to DBplus in 2019.
He earns $20,000 in 2019, and his total contributions are $1,800. His employer matches his contributions, for a total of $3,600.
His annual guaranteed base pension for 2019 would be $306.
8.5% x $3,600 = $306 per year
In 2020, when the AIW enhancement is applied, Phillip’s guaranteed base pension of $306 PLUS the pension he accrued in the current Plan design ($2,500), would increase by 2.2%.
($306 + $2,500) x AIW enhancement rate = $2,867
Phillip continues to contribute and build his pension throughout his employment, and benefit from AIW increases each year. Phillip’s total pension will be the total guaranteed base pension, the pension he earned under the current Plan design, and all of the cumulative AIW enhancements received in DBplus.
When Phillip retires, his pension will include conditional inflation protection enhancements and survivor benefits for his eligible surviving spouse.
An explanation of the Plan's conditional inflation protection provision that applies to both plan designs can be found here.
If you start working full-time for a participating employer
In the event you move to permanent full-time employment during your membership, whether for your existing employer or a different participating employer, you will continue to contribute to the Plan, under DBprime or DBplus (depending on the plan design your employer offers for full-time employment). When you retire, your lifetime monthly pension will be made up of whatever you earned under DBprime plus whatever you earned in DBplus, with all participating employers.
If you start working for a different participating employer
If you leave your current employer and begin working at another employer that participates in the CAAT Plan, your pension will seamlessly transfer with you, and you will continue to build a valuable lifetime income in retirement, while you work.
If you leave your employment with a participating employer
If you leave your employment with a participating employer, the termination options that apply to all CAAT Pension Plan members can be found on the Leaving your job page.
Separation or divorce
The separation/divorce rules that apply to members of both plan designs can be found on the Separation or divorce page.
The valuable survivor benefits available to your beneficiaries can be found on the Survivor benefits page.
Do you work full-time in an Ontario college?
You are earning a secure lifetime pension under DBprime. Full-time employees join DBprime automatically when hired.
Watch the webinar - December 7, 2018