During your membership, you’ll make contributions based on a percentage of your salary. Your employer contributes toward your future retirement income as well, by matching your contributions in the Plan. Your contributions are tax deductible to you, meaning they lower your income for tax purposes. In addition, you pay no income tax on the matching contributions made by your employer.
Contributing to your future
The CAAT Pension Plan makes it easy to save for retirement and build a stable, predictable retirement income. You contribute a percentage of your earnings into the Plan each pay and your employer matches your contributions dollar for dollar.
Your contributions, and those of your employer, are prudently invested in the Plan fund from which your pension is paid when you retire. Contributions are used to fund your benefit, but your benefit is worth so much more than just the contributions you made.
Contributions and benefit security - Video series
Contribute as long as you work (until you turn 71)
If you decide to work past the normal retirement age of 65, you can keep contributing and earning more retirement income until you stop working. However once you turn 71, you must stop contributing to the fund and start collecting your pension, even if you continue working.
Tax free contributions
One of the most cost effective aspects of belonging to a defined benefit pension plan is often one of the most overlooked. Under the Income Tax Act, the federal government provides several forms of tax relief to Canadians who make contributions to registered pension plans like ours.
- You receive immediate tax savings when you contribute to the Plan. Your pension contributions are deducted from your gross income, which reduces your taxable income – the amount on which your taxes are deducted. By the end of the year, the income on which you pay taxes has been reduced by the amount of your pension contributions. This has the same effect as an RRSP contribution – but your employer reduces your tax right away, so that you don't have to wait until you file your tax return.
- Your contributions are 100% matched, or doubled, by your employer. These contributions are not a taxable benefit to you – you do not count this as income.
- Like your RRSP savings, the contributions you and your employer make are allowed to accumulate in the pension fund tax-free. Once you retire and begin collecting your pension from the Plan, income tax will be applied to your payments. However, in most cases, it will be at a lower marginal tax rate than when you were employed.
DBprime contribution rates
DBprime contribution rates are 11.2% on earnings below the YMPE and 14.8% on earnings above the YMPE, matched dollar for dollar by your employer.
Your contributions are based on your contributory earnings, which include basic salary and other payments such as shift premiums and coordinator allowances, but do not include overtime pay, most lump sum termination payments, and certain other types of payments.
DBplus contribution rates
Starting January 1, 2019, all OTRFT members will switch to DBplus. DBplus contribution rates are a fixed 9% on your pensionable earnings, and are matched dollar for dollar by your employer.
DBplus contributions are based on any employment earnings that are received by you and are reflected on your T4.
If you work part-time or on contract, visit the DBplus page to learn more.
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.