Our 50th anniversary year has been an eventful one, during which the Plan has welcomed new employers from within and outside the Ontario College system. As we close out our “50 Facts” series, with the final 15 facts, we’re taking the opportunity to reflect on the past, and on how the Plan continues to remain relevant to its members.
Five facts about survivor benefits
The CAAT Pension Plan is designed to provide a lifetime pension for Plan members at retirement. It also provides a lifetime survivor pension for a member’s surviving eligible spouse, and children’s survivor benefits if the member has no spouse, at no extra cost. Our annual member surveys show that survivor benefits are among the most popular features of the CAAT Plan.
Survivor pensions for eligible spouses were part of the CAAT Plan when it was founded 50 years ago. One unique feature of CAAT Plan’s survivor benefits is that they are provided at no extra cost to the member. In many plans, a member’s pension is actuarially reduced to pay for the 60% survivor pension, but in the CAAT Plan, there is no reduction in the member’s pension.
The Plan includes survivor pensions for dependent children who are under age 18 if a member dies without a spouse. This is another feature that was part of the Plan when it started.
In 1974, the definition of “spouse” was expanded to include a common-law spouse.
In 1999, as soon as it was permitted by law, the Plan’s definition of spouse changed to include same-sex relationships.
The Plan recognizes that not every member has a spouse at retirement, and some members have a spouse who pre-deceases them. For that reason, in 1996, the Plan added a unique feature in the event a retired member enters a spousal relationship after retirement. If this situation applies, and as long as you are married or are in a common-law relationship at the time of your death, your spouse receives a survivor benefit. This is a unique feature not found in many other pension plans.
Five facts about pensionable service
You probably know that pensionable service is a key component in your pension calculation: the more pensionable service you have, the bigger your pension will be. Pensionable service is also an important factor in your eligibility for an early unreduced pension, and for determining the size of your early start adjustment if you start your pension before you reach an unreduced retirement milestone. Here are five additional facts about pensionable service.
Canadians are likely to work for multiple employers during their career, making it difficult to accumulate an adequate pension. So in 2008, the CAAT Plan improved its portability features, by allowing members to transfer service earned in any Canadian Registered Pension Plan (RPP) into the CAAT Plan. This allows more members to consolidate their pensionable service, earn a bigger CAAT Plan pension, and reach early retirement milestones sooner.
Part of expanding portability included providing members with the option to purchase service earned from any Canadian Defined Contribution (DC) savings arrangement. Previously, transfers were limited to Defined Benefit pension plans. By including DC arrangements, the Plan provides more members with flexibility in building a valuable DB pension in the CAAT Pension Plan.
In 2010, the Plan lifted the timelines for purchasing past service, creating an “open buyback” system. This enables members to purchase any time they worked for a participating employer before enrolling in the Plan, making it easier for members to increase their service.
Also in 2010, the Plan launched the “Actuarial Cost Estimate Tool” (or “ACE Tool”), to let members estimate the cost of certain service purchases. This self-service online tool gives members the opportunity to either estimate the cost of purchasing all of their eligible service, or estimate the amount of service their funds (in another savings vehicle) will purchase. By using the tool, members can see whether the purchase is beneficial to them. If they want to make the purchase, the ACE Tool provides the forms they need to start the process. Since it was launched, it has been widely used with thousands of estimates completed each year. In 2017, the ACE Tool was updated so members can get cost estimates for additional types of service purchases.
The CAAT Plan used to limit how much pensionable service members could earn. Before 2005, members could only earn 35 years of pensionable service toward their pension, even if they were in the Plan for longer. In 2005, the CAAT Plan eliminated the “35-year cap,” so that members who continue working can earn service right up until November 30 of the year they turn 71 (a federally mandated pension start age).
- For a complete description of Plan terms, refer to the Plan Text.
A strong past and a look at our future
For the seventh straight year, the Plan has grown its reserves, with long-term projections showing that the Plan will stay fully funded. We live by our commitment to benefit security, contribution stability, and equity among members. For our last look back in our “50 facts” series, here are some facts about the Plan in the past, and a look towards the future.
Over the 50 years the Plan has been in existence, close to 70,000 Ontarians have been active members at some point. Currently, nearly 29,000 active members are earning valuable pension benefits in the Plan.
At the Plan’s first actuarial valuation as of the end of 1968, there were two retired members. There are currently more than 16,000 retired members in the Pension Plan. Each retired member is receiving a pension, paid every month for as long as they live.
The average CAAT Plan member is expected to live longer than the Canadian average. The average active member is expected to live to age 90. The longest-lived pension plan member to date lived to age 103.
In 2017, we launched a new retirement planning session – available as on-site presentations, on-demand videos, lunchtime webinars, and regional Saturday events. Regional events are open to members and their spouses and so far, more than 1,000 members and their spouses have attended. More than 2,000 members have attended an on-campus presentation, more than 500 have attended a webinar, and more than 1,500 have watched the on-demand videos. We look forward to continuing to expand these popular and valuable sessions in the future.
In the years to come, the Plan will continue to focus on providing secure pensions, at stable and appropriate contribution rates to members. The CAAT Plan has a 98% chance of remaining fully-funded in 20 years, based on recent Asset-Liability Modeling studies. The CAAT Plan, a model of the Modern DB pension plan model, remains relevant, offering its members secure pensions Canadians want and are willing to pay for. Visit the new “Be a Pension Champion” webpage.