If an unexpected incident leaves you unable to work, the impact can be both physically and financially devastating. You may have already considered what would happen to your family if you were unable to work, but have you ever wondered how a disability leave would affect your future pension?
The CAAT Plan has provisions in place that will protect your pension benefit if you are unable to work because of a prolonged illness or serious injury. In Ontario, the Workplace Safety and Insurance Act (WSIA) and its regulations protect employees who are injured or disabled on the job by ensuring they will receive an income while they are unable to work. Many College employees are also covered by a Long Term Disability (LTD) plan through their group insurance. If you begin collecting workplace disability benefits (either from LTD or total disability benefits from the Workplace Safety and Insurance Board (WSIB)), you will retain your membership in the CAAT Plan and continue accruing pensionable service towards your pension.
Your Employer will notify us if you begin collecting such disability benefits.
If you were an active member of the ROM Pension Plan on December 31, 2015, and are still an active member, the provisions that apply to your pension may be different than those outlined on this page. Visit Active members – formerly ROM Pension Plan members for details.
Your pension keeps growing
If you begin receiving workplace disability benefits you are still considered a member of the Plan. In other words, even though you are not actively working, you will continue to earn a pension while you are receiving workplace disability benefits. During your period of disability, you stop contributing to the CAAT Pension Plan and your employer also stops contributing to the Plan on your behalf. During this period, your earnings are deemed for the calculation of the pension you accrue during the disability period. Deemed earnings are based on the salary you were receiving from your employer right before you started collecting your disability benefits. If you return to your regular employment, both you and your employer will resume contributions.
Starting in the first calendar year of disability leave and in each subsequent year, your annual rate of deemed earnings will increase at the same rate as is granted for conditional inflation protection. This increase is based on 75% of the increase in the Consumer Price Index (CPI) from September of the prior year compared to September twelve months earlier. It helps keep earnings from eroding due to inflation.
If you started disability leave before July 1, 2016
- You continue to accrue a pension, and do not make contributions.
- Starting with the first calendar year of disability (and thereafter), your pension accrues at a rate of 2% on all of your deemed earnings (prior to this your pension accrues at 1.3% and 2%).
If you start disability leave on or after July 1, 2016
- You will continue to accrue a pension, and will not make contributions.
- Your pension will accrue at a tiered rate of 1.3% and 2% for the entire duration of the disability period. (1.3% on earnings below the YMPE and 2% on earnings above the YMPE.)
When do disability accruals end?
Your employer will advise the Plan when your period of disability is over. You are no longer considered disabled for the purposes of the Plan when you:
Return to work after a disability
Once you stop receiving disability benefits and return to active employment, you and your employer will resume contributing to the Plan. In the future when you retire, your benefit will be based on your highest average pensionable earnings and the pensionable service you have accumulated in the Plan, which includes the period of pensionable service you accrued while you were disabled.
Terminate your employment
If you do not return to work at your employer after your period of disability has ended, or if you accept a lump sum settlement from the insurance provider, and you have not reached normal retirement age, you will be considered to have terminated your employment. At that point, you begin the 24-month membership extension.
Read more about your options during the 24 month extension of membership.
If you are eligible to retire you may retire anytime during the 24-month extension of Plan membership. You are eligible to retire when you become age 55, or age 50 if you have 20 years of service. Click here for more information.
If your employment is terminated by your employer while you are on workplace disability benefits, you will remain a member of the Plan and continue to earn a pension as if you were still employed, as long as you continue to receive workplace disability benefits. If you stop receiving these benefits and you are under age 65 (your normal retirement date), you stop earning a pension and begin the 24 months extension of membership period from the date your benefits end.
In any case, when you terminate or retire, your pension will be based on your highest average pensionable earnings and your pensionable service, including the period of service you were receiving disability benefits.
The CAAT Plan may contact you periodically under this scenario to confirm your workplace disability benefits are continuing.
If your disability continues until your normal retirement date (the month in which you turn 65), you must start your pension on that date. When you become eligible for an early retirement pension, you can choose to begin collecting the benefit you earned in the CAAT Plan. Your pension will be based on the highest average pensionable earnings and the pensionable service you have earned up to your retirement date, including the period of pensionable service you accrued while you were disabled. Your pension is calculated the same way as pensions of Members who are not disabled, however your pensionable earnings during the period of disability are deemed, not actual, earnings.
Die while receiving LTD or WSIB benefits
If you pass away while accruing a pension in the CAAT Plan and receiving workplace disability benefits, you are considered to have died as an active Plan member and your survivors will be eligible to receive the applicable death benefit.
Any death benefit payable to your beneficiaries will be calculated based on your highest average pensionable earnings and the pensionable service you earned up to your death, including the period of pensionable service you accrued while you were disabled.
Other sources of disability benefits
Disability income may come from one or several sources depending on your individual circumstance. Veteran's Affairs Canada, Employment Insurance and the Canada Pension Plan all provide some form of disability or sickness benefit based on eligibility. These benefits, however have no impact on your CAAT Plan pension. WSIB and LTD benefits do have an effect on your CAAT Plan pension. For more details, contact your Human Resources representative.
WSIB Disability benefits
Most businesses in Ontario must register with the WSIB and pay the costs of funding WSIB benefits. The most common benefit - “Loss of Earnings” - normally covers the income lost due to a work-related injury or disease. This benefit is indexed to keep up with inflation and offers survivor benefits to spouses or beneficiaries.
Long Term Disability (LTD) insurance benefits
LTD benefits offered by group insurance plans are meant to provide you with income following an illness or accident that renders you unable to work. You normally qualify for LTD benefits if you are employed and covered by an LTD plan when you become disabled. Your benefit and coverage are dependent on the provisions of your insurance carrier and the terms of your plan.
Keeping you informed
During your disability period, you will continue to receive your Member's Annual Pension Statements which reflect the pensionable service you have accumulated as well as your deemed contributory earnings. Each year you will also receive from the CAAT Plan T4A slips that you will use to file your annual income tax return. Our website provides a variety of Plan information that will keep you up to date.
Keep us up to date
It's important to remain in contact with your employer even if there is chance you will not return to work. Your employer will advise us if you move, get married or change your beneficiary since we require this information to keep our records up to date.
Estimate your pension
If you’re curious about what your pension might look like when you’re ready to retire, why not try our 3-Step Pension Estimator? Simply type in your highest average earnings and total service (you can find these numbers on your most recent annual pension statement) and let the estimator show you your retirement dates and estimated pension amounts.