Should I use the Pension Estimator?

Posted for Members, December 6, 2017

The CAAT Plan online Pension Estimator is one of the most useful retirement planning tools available for members.

Sylvia Golebiowski, in her role as the Lead, Pension Education, has been travelling the province visiting CAAT Plan participating employers, and helping members understand their pensions. In this article, Sylvia answers some of the most frequent questions she hears from members about the online Pension Estimator.

One of the topics members often bring up is how to pick their retirement date. Understandably, we all want to pick the date to retire that works best for us, and want to know how to do it. That’s why I always recommend members use the online Pension Estimator.

Here are some of the key features of the Pension Estimator:

  • It gives an accurate calculation, is available at your convenience 24-hours a day, and only takes only a few minutes to use.
  • It lets you quickly identify three retirement “milestone” dates and estimates your pension on those dates—your earliest retirement date, the earliest date you can start an unreduced pension, and your normal retirement date (age 65).
  • If you want, you can model any number of retirement scenarios by choosing different retirement dates or retirement ages so you can see how your age and years of service affect your pension.
  • The “Total Retirement Income” module lets you estimate your Canada Pension Plan and Old Age Security pension amounts, giving you a better picture of your total retirement income.
  • Your results are displayed in easy-to-understand graphs that allow you to track your retirement income over time.

If you’re still not convinced that the Pension Estimator is useful, here are some of the questions I’ve been asked by other members who haven’t tried it yet.

How can I get the most out of my estimates?

With the Pension Estimator, you control the information you enter – either using current information you have on hand, or the data found in your Annual Statement. The more up-to-date and accurate the information you enter, the more accurate your pension estimate will be. That’s why we always recommend using your most recent Annual Statement for the input. This way, you enter the highest average earnings calculated by the Plan, and the service reported by your employer.

(Pro Tip: You can find the information you need on page 4 of your Annual Statement. If you need a copy of your most recent Annual Statement, contact the CAAT Plan and we can send you a copy, typically within two business days.)

I work part-time. Can I use the Pension Estimator?

Yes. And we recommend you use your most recent Annual Statement to simplify entering your information.

How does the Pension Estimator know what my pension will be?

To estimate your future retirement dates, the Pension Estimator makes certain assumptions about your service and earnings, and projects them into the future. For example, the Pension Estimator assumes you’ll continue to earn service until retirement at the same rate you input. For example, if you choose “part-time” hours in Step one, and input 50% of a full-time position, it will assume you will continue to earn 50% of a year of service each year until your retirement date. In reality, if you end up working more, or less than the service you entered in the Pension Estimator, your ultimate pension, and the dates that you become eligible for an early unreduced pension, will be different than your Pension Estimator results. These are the same assumptions the Plan uses when providing pension estimates.

Another example is estimating future earnings. The Pension Estimator asks you to enter a rate of earnings increase between 0% and 5%. It will then assume that your earnings will increase by this amount for every year in the future until the calculated retirement dates. If, in fact, your actual earnings end up increasing at a different rate, your ultimate pension amount would be different from the Pension Estimator’s results.

Can I get an estimate from the Plan?

Yes. The Plan will provide estimates for members who request them. To keep costs low, we recommend you request estimates when you are within five years of retirement. For these estimates, the Plan draws on your historical information from our pension database. These estimates take time, while the online Pension Estimator offers an immediate result.

(Pro Tip: To get an estimate from the Plan, you have to complete and submit a form. Allow ten business days to get a completed estimate from the Plan.)

Can everyone use the Pension Estimator?

Yes. Most active members of the Plan can benefit from using Pension Estimator, but there are some limits to what it can do: if you have a deferred pension, or are a rehired pensioner, you should contact the Plan for an estimate.

If you haven’t used the Estimator, why not give it a try today? In less than five minutes, you can get an estimate of your pension at your earliest, earliest unreduced, and normal retirement dates, or at any date of your choosing. You can use the Estimator as often as you like – your data is not stored, saved, or transmitted to the Plan or to your employer. And you can try it as many times as you want to model different retirement scenarios.