Part-time or contract employees
As a part-time (or full-time contract) employee of a participating employer (referred to as other than regular full-time or OTRFT), you have the option to join the CAAT Pension Plan at any point during your employment.
The provisions outlined below are in effect until December 31, 2018. Starting January 1, 2019, OTRFT employees who join the Plan will earn a pension under the terms of DBplus. DBplus is designed specifically for members who work part-time or on contract. DBplus maximizes your lifetime pension and provides similar value per contribution dollar as the current Plan design.
The CAAT Pension Plan makes it easy to build a stable, predictable retirement income for life.
Together with your personal savings and government pensions, the CAAT Plan could be a key component of your overall retirement income strategy. While it’s never too early to start saving for retirement, it is important to consider if CAAT Plan membership fits into your budget and career plans. If you choose to join the Plan, you immediately begin building retirement income. Here are some of the things to think about when deciding whether or not to join the Plan.
What do I get from joining?
As a member, when you retire, you will have predictable pension without having to make complex investment decisions. Your pension includes valuable additional features such as Survivor benefits while you’re employed and during retirement to provide income to your eligible spouse or loved ones upon your death and Inflation protection increases on your pension that help protect the buying power of your pension.
Once you have joined the Plan, you remain a member. While you are employed by a participating employer you cannot opt out and stop contributing.
Read on for details.
Valuable survivor benefits for your beneficiaries
If you die before you retire, the value of the pension you earned will go to your spouse or, if you have no eligible spouse, your eligible children, or your beneficiaries.
If you die after you retire your eligible spouse will receive a pension for his or her life. The survivor pension is equal to 60% of the lifetime pension you were receiving at the date of death. (The bridge benefit does not apply to survivor pensions.) At retirement, if you have a spouse, you have the option to reduce your pension so that your spouse can receive a 75% survivor pension when you die.
Under some circumstances, your eligible children and beneficiaries may also receive survivor benefits.
Conditional inflation protection increases applied to your pension
Over the years, the price of goods and services generally rise –the price of groceries, gas, or even movie tickets are some examples. The CAAT Plan helps offset the rising cost of living by providing inflation protection on pensions. This means, as a retired member, you may receive valuable annual increases to your pension payments.
Inflation protection is cumulative, which means once an increase is added to your pension, it becomes a permanent part of your pension and any subsequent inflation protection increases will be added to the total pension from the previous year.
The inflation protection that may be applied to your pension is based on when your pensionable service was earned. Funding for inflation protection was treated differently during specific time periods in the Plan’s history. This treatment impacts how inflation protection is granted.
Flexible retirement dates
All members can retire at any age from age 50 with a reduced pension.
Retire with an unreduced pension at age 65, regardless of how much service you have earned. You can also choose to keep working and building a pension – up to age 71.
You have options if you leave your job before retirement
If you terminate your employment before being eligible for an immediate pension, there is no cash payout: your membership is extended for 24 months, giving you time to make decisions about the pension income you have earned in the Plan.
If you start working for another college or other CAAT Plan participating employer during the 24-month extension of membership, you resume contributions to the Plan and continue to build your retirement income.
Opportunities to build your pension
Purchase past periods of employment – You can purchase any period of employment you worked with your employer before joining the Plan. This helps you build your pension.
Transfer from a previous employer –Transfer options allow you to transfer your pension from a previous employer’s plan, and consolidate your pension benefits in one place.
Your pension is secure
Both DBplus and the current Plan design are part of the CAAT Pension Plan. It is independent, jointly governed, and fully funded. Employers and members share equally in decisions and benefits and contributions through their representatives on two governing bodies. The Plan is highly respected for its pension and investment management expertise and operated for long-term sustainability.
Prepare for retirement while you’re working
Even if you do your best to invest for retirement on your own, you may not have enough money to maintain your lifestyle throughout your retirement. The CAAT Plan offers a pension for life, built while you’re working.
How do contributions work?
- You will contribute for as long as you are employed by a participating employer, on every pay, and your employer matches, dollar for dollar.
- The current Plan contribution rates are 11.2% on pensionable earnings below the YMPE and 14.8% on earnings above the YMPE ($55,900 in 2018). DBplus rates are a fixed 9% on your pensionable earnings. In both cases, contributions are matched by your employer.
- If you take on another contract, or work at another participating employer, you remain a member and contribute and build pension benefits on those earnings as well.
- If you become full-time, you automatically start contributing and earning a pension under the current Plan design.
- Once you join the Plan, you can’t opt out or stop contributions while employed.
- Pension plan contributions are tax-deductible, which means they reduce your income for tax purposes.
All OTRFT members will make the switch to DBplus on January 1, 2019.
Does joining fit in with my career plans?
In deciding to join, you should think carefully about your own situation. Different factors will be relevant for each individual and only you can determine the action that is best for you. Here are a few more points to consider, based on your career plans.
- Do you plan to work for your employer for a long time or a short time? When your contract ends at your employer you remain a Plan member for 24 months. If you take a job at a new employer that participates in the CAAT Plan during those 24 months, you will resume contributing to the Plan and you will earn additional benefits.
- Your benefit is locked-in, which means even if you leave the Plan before retirement, it must be used for retirement income, and cannot be taken as a cash payout.
- If your hours are flexible and your earnings go up or down, you still contribute to the Plan on every pay, based on your total earnings.
- Do you work more than one contract or at more than one participating employer? Once you join the Plan you and your employer make contributions and earn benefits on every contract, on every pay.
- Are you likely to become full-time in the future? Full-time employees join the current Plan design automatically on hire.
Questions and Answers
If you still have questions after you’ve been through our Q&A, give us a call. One of our pension specialists can answer your questions and explain the Plan. But remember, the decision to join is up to you.
What if I work for more than one participating employer?
If you enrol in the CAAT Plan with one participating employer, you must contact any other participating employer you work for, and ensure that the HR department is aware that you are a member of the Plan. In this way, contributions can be deducted for all employers on a timely basis, which avoids missed contributions requiring catch-up. You will make contributions on every contract, at every employer, and earn a pension with each employer.
How is my pension calculated?
Click here to learn more about the pension formula under the current Plan design (applicable to OTRFT members until December 31, 2018).
Click here to learn more about the pension formula under DBplus, which will apply to all OTRFT members starting January 1, 2019.
Can I estimate my pension before joining?
Click here to try the Pension Road Test: It will give you an estimate of your contributions if you join the Plan before January 1, 2019. NOTE: The Pension Road Test gives an estimate that assumes that you continue in the current Plan design until you retire. However, if you join before January 1, 2019, you will automatically switch to DBplus on January 1, 2019.
Can I leave the Plan after I’ve joined?
Once you have joined the Plan, you remain a member, and starting January 1, 2019 all OTRFT members will make the switch to DBplus. While you are employed by a participating employer you cannot opt out and stop contributing.
Only you can decide if joining the CAAT Pension Plan is right for you. Once you’ve reviewed all the information and used the tools, you should be ready to decide if you want to join now and start building your retirement income with the CAAT Plan. You have the option to join at any time during your part-time employment, and begin building a pension from that point forward. The earlier you join, the sooner you start accruing service which is a key component in building your future pension. Once you join, you can’t opt out.