Your pension includes two additional valuable benefits: inflation protection and survivor benefits.
Your pension includes some inflation protection, which is calculated based on changes to the previous year’s Consumer Price Index (CPI).
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.
Inflation protection is cumulative
Inflation protection, when it is granted, is added to your pension on January 1. This new amount becomes your new lifetime pension. As a result, each year’s inflation protection increase is applied to your previous inflation protection, as well as your pension.
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.
Calculating inflation protection
The years in which you earned your pension are the main factor in calculating any inflation protection increase for which you may qualify. There are three time periods in which pensionable service is treated in different ways.
- For pensionable service after 2007, inflation protection increases are conditional on the Plan’s funded status, granted when the Plan is fully funded. Since being introduced, conditional inflation protection has always been paid.
- For pensionable service earned between 1992 and 2007, inflation protection increases are guaranteed and will be granted indefinitely.
- For pensionable service before 1992, there are no inflation protection increases.
We’ll notify you of any increase
Each year in December, retired members are sent a letter detailing any increase to their pensions for the upcoming year. When you're retired, you’ll also receive a Retired Member Annual Statement, which outlines your inflation protection increases, based on your years of service.
For DBprime members, pensions that began less than 12 months before the January 1 increase date will receive a prorated increase. In subsequent years, a full increase will apply.
How is the increase calculated?
Inflation protection increases are based on 75% of the CPI up to a maximum of 8%. In recent years, when inflation has been low, the increase has rarely risen above 2%. If there is no increase in the CPI of a given year, there would be no increase to pensions in the following year.
The other valuable benefit you receive with your pension is survivor benefits.
Your pension includes a lifetime pension for your surviving eligible spouse, equal to 60% of the lifetime pension you were receiving at the date of your death. The survivor pension receives inflation protection in the same manner as your lifetime pension did.
If you have an eligible spouse when you retire, you will have the option to choose either the default 60% survivor pension, or a 75% survivor pension. If you choose the 75% survivor pension option, your lifetime pension will be actuarially reduced to reflect the cost of the higher survivor pension, and that reduction is permanent.
If you do not have an eligible spouse when you retire, but subsequently have one in retirement, that spouse can receive the 60% survivor pension.
In addition to these benefits, the CAAT Plan offers a pension guarantee. The pension guarantee could result in a lump sum payment to your beneficiary, but only if you die early in retirement without an eligible spouse or children. Under the pension guarantee, the total amount paid to you while you live, and to any survivors or beneficiaries after your death, cannot be less than 60 times your initial monthly payment. Practically, this applies only in the first five years of retirement: if you die before your pension payments equal 60 times your first lifetime pension payment (i.e. in less than five years), and you have no eligible spouse or children, the designated beneficiary receives a payment of the balance of 60 times your initial pension payment, minus what has already been paid to you or on your behalf. Members whose jurisdiction of employment at retirement is Quebec have the option to select 120-months. This option, and the cost, will be shown on your Retirement Option document.
You can learn more about how these valuable additional benefits work in the on demand retirement planning session.
For more details on survivor benefits, visit the Survivor benefits page
Estate planning - Wills and Insurance
While you’re reviewing your beneficiary designations for the CAAT Pension Plan, you might want to review your will and see if it’s up-to-date. If you haven’t looked at it since your children turned 18, you might want to take the time to update it. Ensuring your will is up-to-date will help make sure your loved ones are protected when you’re gone. You do not need to name your CAAT Pension Plan beneficiary in your will. The CAAT Plan Change of Information or beneficiary form is the best way to ensure your beneficiary designation is carried out.
This is also a good time to look at your insurance needs. Consider all your policies – life, home, and auto. You might be eligible for seniors’ discounts. When you retire, you’ll also be able to choose from a selection of health plans, enabling you to maintain drug coverage, and more. You arrange the selection of this health plan with your employer at retirement. It’s a good idea to assess your long-term health needs and determine which policy will work best for you. As these policies are entirely member paid, it’s also a good idea to get a costing from your HR department so you know how much you’ll be paying.