How do government pensions work?

In addition to a lifetime pension from the CAAT Pension Plan, you have access to government pensions, and your own personal savings. Working together, each of these "pillars" will help provide the stable foundation on which your retirement income will be based.

Do you work part-time or on contract?

Visit the DBplus page to discover how DBplus maximizes the lifetime pensions of members who work part-time or on contract.

Budgeting

It’s important to remember that your government benefits, like CPP or QPP and OAS, are paid in the last three business days of each month. Your CAAT Plan pension is paid on the first day of each month. This means your retirement income payments will be staggered during the month. Remember that your CAAT Plan pension and your government pensions (CPP and OAS) are all taxable.


What if you decide to return to work?

After you retire, you may decide to return to work for a new employer, or even for yourself. If you become employed and your new employer does not participate in the CAAT Pension Plan, you can continue to collect your CAAT Plan pension, as well as your income from employment. Once you've started your pension or have reached your normal retirement date, however, you no longer have the option to transfer your CAAT Plan service to another organization's pension plan.

If you return to work for an employer that does participate in the CAAT Pension Plan, you have options that are based on your age and your employment status.

If you are under age 65 and return to full-time employment, your pension payments stop and you will automatically resume participating in the Plan, and begin to make contributions. If you are over 65, you will have the option to suspend your pension payments, and rejoin the Plan. If you return to part-time or contract employment, you have the option to suspend your pension payments, and resume contributions. If any of these situations apply to you, contact your employer’s HR department. When your return to work, if your new employer participates in DBplus only, you would begin contributing to DBplus whether you return to full time or part time employment.

Even though age 65 is considered your “normal retirement” age, you can continue working and contributing to the Plan past that age without any interruption to your membership. You simply continue to work, make contributions to the Plan, and watch your pension grow. When you retire, you can enjoy a pension that is based on  a longer period of service. By November 30 of the year in which you turn 71, you will have to stop contributing to the Plan, and start collecting your pension by December 1 of that year, even if you continue working.

Possible implications of returning to work

Planning for post-retirement employment involves determining the possible impact on your other sources of retirement income. Employment earnings may have an effect on the retirement benefits you are eligible to receive from the government. For example, your retirement income may consist of your CAAT Plan pension and your Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) benefits as well as your employment earnings. When you become eligible to collect your Old Age Security (OAS) benefit at age 65, your overall income may surpass the OAS threshold. If that is the case, your OAS benefit may be subject to a "clawback."


In addition, your employment earnings may affect the amount of income tax you are required to pay each year. Depending on your situation, you may wish to adjust the amount of tax deducted from your paycheques or your pension income by completing and submitting Personal Tax Credits Return forms (available from the Canada Revenue Agency).