A Brief Checklist for Retirement Planning

First, talk to both your financial advisor and to your Union representative about your thoughts on retirement, and how to take the necessary steps before you submit a letter of resignation.

Here are some points that faculty should consider when planning to retire:

1.     If you are retiring between October 1, 2017 to October 1, 2022 you should consider buying back the pension contribution lost during the strike of 2017. Discuss with your financial advisor to review the benefits. If you decide to buy it back, Local 237 will reimburse 50% of the cost which would have been the employer's contribution. To qualify for the please refer to the Local 237 Strikes - Pension Top- Up bylaw.

 

2.     The CAAT Pension Plan sends you an annual statement by June 30th each year. The annual pension plan statements provide your current ball-park CAAT pension payout estimates.  To be more precise, you can estimate your current pension using the http://www.caatpension.on.ca web site.   Your goal is to calculate what your net monthly CAAT Pension, Canada Pension Plan (CPP), and/or Old Age Pension (OAS) proceeds will be, after taxes.  Calculating the net amount is straight-forward, but how your monthly pension payment is taxed, is not. More about the

 

o   Note: What they DON’T tell you:

§  Your individual CAAT Pension income will be taxed as if you are a single person, regardless of your marital status. The CAAT Pension does not consider a “married” (income sharing) income tax bracket.  The tax deducted as a single person is accumulated and can be re-claimed when you file your joint spousal tax return the following year.

·        Example: Excess (single vs. married) CAAT Pension tax deductions incurred in 2019 can be refunded in your 2019 tax return, which is filed in 2020.

 

§  Your CPP “income”, if applicable, and/or your Old Age Security (OAS) “income”, if applicable, are each deemed taxable income, but no taxes are withheld on these monthly lump-sum payments.  The tax bracket you will be taxed on by Canada Revenue will be based upon the annual TOTAL of your CAAT Pension payments, plus CPP payments, plus OAS payments, whichever are applicable.

·        Consider prepaying an appropriate amount of income tax in monthly installments in your name to Canada Revenue. The Canada Revenue Agency Individual Accounts Web site will guide you through creating an automatic monthly deduction from your bank account.

 

3.     Select a retirement date. Generally, June 30th is the best day for faculty to retire. The reason for this is that two months of pay (for July and August) are added to your final pay and thus are factored into your “best 60 months” calculation.

 

4.     Do you have a sick day gratuity that you are transferring to an RSP? Here is a link to some Canada Revenue Agency rules that you should be aware of:

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/transferring/transferring-retiring-allowances-severance-pay.html

 

5.     Prevent delays to your payments. If you have previously divorced or have a separation agreement, forward those documents to the CAAT Pension Plan. Missing documentation is the most frequent cause of delays to the first pension payment.


 

About the CAAT Pension Plan

Unlike the situation facing other unions and their pension plans, the CAAT Plan is excluded from collective bargaining under the Colleges Collective Bargaining Act.

Instead, the CAAT Pension Plan is governed an independent Board of Trustees with representatives from OPSEU Academic and Support Staff, OCASA (Administrative Staff), and Colleges Ontario. The employer and employee trustees jointly make decisions for the benefit of all plan members.

Part Time, Partial Load, and Sessional Faculty can participate too!

A common misconception is that you must be a member of the union to contribute to the CAAT Pension Plan. Not so.

If you work as a part time, partial load, or sessional college faculty member in Ontario, the CAAT Plan refers to you as “Other Than Regular Full-Time” (OTRFT) employee. An OTRFT employee is technically defined by the Plan as someone with a fixed contract end date. As of January 1, 2014, OTRFT members can opt to join the Plan immediately upon hire.

The CAAT Pension Plan Web site, is found at:

https://www.caatpension.on.ca/en, ou, enfrancais, https://thecouncil.on.ca/?locale=fr

 

 

A good way to start educating yourself on the CAAT Pension Plan features is to avail yourself of the nine “Retirement Planning – On Demand” videos, which self-stream contiguously.  The videos can be found at:

https://www.caatpension.on.ca/en/members/planning-your-retirement/retirement-planning-demand

 

How Much will my Pension Be?

Start your calculations by linking to the “How Much will my Pension Be?” web page on the CAAT Pension Plan Web site. You will need to total up your “Best 60 Months” salary total first. This will be the last five years you have been receiving a salary. 

Whether you are full-time, part-time, partial Load, or sessional the CAAT Pension Plan Web site will help you. Start at https://www.caatpension.on.ca/en/tools/pension_estimator

To see how your pension will be paid to you, go to https://www.caatpension.on.ca/en/retired-members/collecting-your-pension

 

NOTE: The CAAT Pension plan deducts a tax withholding amount equal to a single person deduction.  If you re living in a spousal arrangement, you can reclaim the different in the single versus the spousal income tax deduction the following year when you file your annual tax returns to the Canada Revenue Agency.

What you will need to do before your next fax return is described on the CAAT Pension Plan Web site at https://www.caatpension.on.ca/en/retired-members/income-tax

 

 

About Extended Health and Dental Care

If you retire from your full-time, part time, partial load, or sessional college faculty employment in Ontario, you will no longer receive a regular pay cheque from the College. 

One deduction on your pay cheque was for Health and Dental care. Because the pay cheques stop, you are no longer eligible for Employee Health and Dental care coverage. Health and dental care packages are available to you at your additional personal cost.

You have 31 days to decide whether you wish to bridge into an available retirée extended health and dental care packages.  You will assume payments yourself for this coverage.  31 days is the deadline for opting to bridge into the available extended health and dental care packages available. You cannot opt to enroll in said packages once 31 days have elapsed.

Should you choose to enroll in an extended health care and/or dental care program, you will personally assume monthly payments for the type of retirée extended health and dental care packages you choose.

The annual premiums you pay toward extended health care and/or dental care program are eligible for a tax credit at income tax return time in April.  A TAX CREDIT is different from a tax REBATE, however.  Tax credits are handled on your tax return as follows:  Let’s say you paid $1,000 annually for an extended care plan coverage.  The $1,000 is eligible for a $1,000 tax credit.  The amount of tax rebate you can claim for a $1,000 tax credit depends upon the tax percentage of your tax bracket.  For example, if your income places you in a 34% taxable bracket, you can claim a $340 tax rebate, based on your $1,000 tax credit and your 34% tax bracket.

The Council http://www.thecouncil.on.ca , and OPSEU, recommend you consider Sun Life as your extended health care and dental care provider, as costs are better maintained with large numbers of enrolled participants. Provisions for out-of-province travel coverage are being explored by the carrier. Clearly you should tailor the plan that is most applicable for you and your family’s needs. OPSEU recommends that, if you can afford the more-costly plan, choose Plan 1 first.  The coverage carrier does not allow changing from Plan 2 to Plan 1. However, one can change from Plan 1 to Plan 2 should it be necessary.

CAAT Pension Plan members can access periodic CAAT Pension Plane newsletters. To see a list of all the newsletters click here.

Coverage and Costs

You may want to printout an extended health care, dental care, and additional life insurance worksheet at this time, to help you estimate monthly premium costs, including taxes. The costs of extended health care and dental care benefits are taxable. 

The printable worksheet is available here.

The extended health care coverage comes with two options, and costs, of the options.  To view the current extended health care coverage options, click here. 

To view the current dental care coverage, click here.

To view the monthly premiums for each of the two extended health care options, and the monthly premiums for dental care, click here.

 

About Available Life Insurance Coverage

When you retire from your full-time, part time, partial load, or sessional college faculty employment in Ontario, you will no longer receive a regular pay cheque from the College. 

Consequently, as a retirée you have effectively withdrawn from the Employee Life Insurance plan. 

You may opt to replace your company-provided life insurance coverage, or to augment your existing personal life insurance coverage with an additional personal plan at this time.

The current coverage available, and premium costs are available here.

 

Go back to A Brief Checklist for Retirement Planning

Go back to About the CAAT Pension Plan

Go back to Extended Health and Dental Care