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Retirement |
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Retirement
- When can I
retire on Pension?
- What if I become
disabled?
- What
if I retire and am later re-hired by a contributing
employer?
Retirement Income
- How much
Pension will I receive?
- What
if I don't want to receive an annuity?
- What
does "locked-in" mean?
- Are
any Pensions not "locked-in"?
- What is a Life
Income Fund?
Forms of Pension
- How long
does my Pension continue?
- What if I
choose a LIF or LRIF?
- Are
there any special rules that I need to be aware of?
Illustrations
- Are any illustrations
available to me regarding retirement benefit amounts?
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Retirement
1. When can I retire on
Pension?
You can retire at any time after your 55th birthday,
assuming you have retired from active employment. You must
retire from the Plan before the end of the year in which you
turn 69.
2. What if I become disabled?
If you become totally and permanently disabled as defined
in the Plan rules, you can retire from the Plan. Your
disability retirement date may be the first day of any month
before your 65th birthday and after the date your disability
is found to be total and permanent.
3.
What if I retire and am later re-hired by a contributing
employer?
You will be treated as if you were a new member of the
Plan.
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Retirement Income
1. How much pension will I receive?
Retirement benefits are based upon the total contributions
your Employer(s) makes to the Plan and the total amount of
interest earned on those contributions. This total amount will
be used to buy you a pension, in the form of an annuity, which
will provide you with retirement income. Examples of
retirement income are given below.
2. What if I don’t want to receive an annuity?
You will be given a number of options when you retire,
including the annuity. If you do not wish an annuity to be
purchased on your behalf, you will be able to transfer your
money into a locked-in RRSP or non-locked-in RRSP, depending
on the locked-in status of the money. Also, you can use it to
buy a Retirement Income Fund (RIF), Life Income Fund (LIF) or
an LRIF. The RIF, LIF and LRIF can all be used to provide you
with retirement income.
3. What does "locked-in" mean?
Locked-in money is money that can only be used to buy you
retirement income. It will never be available to you in cash.
4. Are any pensions not "locked-in"?
Total contributions with interest less than a certain
percentage of the CPP earnings ceiling ($39,100 in 2002) will
be paid out in a lump sum. The percentage depends on the rules
in effect in your province of employment. You must pay
withholding and income taxes on any cash payment you receive
from the Plan.
5. What is a Life Income Fund?
It is a locked-in registered retirement income fund (RRIF)
contract from which you must receive payments each year
(starting not earlier than age 55 nor later than December 31
of the year you turn 69). The LIF must be converted to a life
annuity not later than December 31 of the year you turn 80.
The LRIF is a similar vehicle that does not require
annuitization at age 80. Some provinces do not allow money to
be transferred to the LRIF.
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Forms of Pension
1. How long does my pension continue?
If you purchase a pension (also called an annuity) at
retirement, it will provide you with payments until you die.
After your death, depending on the form of pension you choose,
your spouse may also be provided with income, either equal in
size to the payment you received or at a lesser level,
depending on what you decide.
2. What if I choose a LIF or LRIF?
Canada Customs and Revenue Agency has established a
minimum and a maximum annual withdrawal amount for LIF’s.
You can choose any level of income between the two.
3.
Are there any special rules that I need to be aware of?
If you have a Spouse, you must, by law, receive your
pension in a form that will provide her with a minimum amount
of the pension that was in payment to you during your
retirement. If you were employed in Manitoba at the time of
your retirement, that minimum amount is 2/3rds. For all other
provinces and territories, the minimum is 60%. Your Spouse can
choose to waive his or her right to this mandatory form, and
allow you to choose some other form of income.
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Illustrations
1.
Are any
illustrations available to me regarding retirement benefit
amounts?
Yes. The NDT
Pension Plan booklet contains illustrations on pages 13
and 14.
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