NEW - Updated Pension Information for 2010:
U of T Pension Funding
2010 U of T Pension Information

Pension Quick Facts:

Your Pension Plan: Formula

• Highest Average Salary/Wages (HAS/W): Annual average of highest 36 completed months of salary/wages while a member of the pension plan
• Average CPP Maximum Salary: Annual average of Year’s Maximum Pensionable Earnings under Canada Pension Plan in the last 36 months of participation in the Pension Plan
• Pensionable Service: continuous service while a member of the Pension Plan; Part-time employees earn prorated pensionable service to reflect percentage of full-time hours worked
• Normal Retirement Date: June 30th after your 65th birthday

Pension Formula:

FORMULA Lower Deck: 1.6% of HAS/W up to average CPP maximum plus Upper Deck: 2.0% of HAS/W over average CPP maximum salary times pensionable service equals annual pension	EXAMPLE—$45,000 1.6% x $41,233   = $659.73 + 2% x ($45,000 - $41,233) = $75.33 x 30 years = $22,052 per year ($1837.67/month)

Calculate your pension benefit here

Survivor Benefits After Retirement:

• If you do not have a spouse at retirement date: lifetime pension with a guarantee of at least 60 monthly payments
• If you do have a spouse (includes married, common law same sex or opposite sex): lifetime pension, with 60% of the monthly pension continued to surviving spouse; No reduction in original pension to pay for the 60% continuation unless spouse is more than 15 years younger

Improving the benefit rate:
Your union has negotiated increases to the benefit rate so that the rate has increased from 1.3% to 1.6%. By increasing the benefit rate on earnings up to the average CPP max, you have closed the gap and moved closer to a full 2% pension. A member earning around $45,000 will now receive a monthly pension 6% higher than before because of the rate increase you bargained (all other things held equal)                                                                          

Why you have a good pension plan:

• Every time your salary increases your pension increases
• Indexed
• Unreduced early retirement
• Good survivor benefits
• Good replacement ratio                                                                                        

Pay Replacement at Age 65:

Monthly Salary	$3,750
30 Year Pension	$1,838
Canada Pension Plan	$845
Old Age Security	$485
Replacement Ratio	84%

 

 

 

What does it cost a member?

• Members contribute from every pay cheque towards their pension
• The contribution rate is 5% on the lower deck (earnings up to CPP max), and 6% on the upper deck (earnings in excess of CPP max)
• Employer covers the rest of cost
• Employer currently contributes about triple what members do

Who is a plan member?

• Anyone earning more than 35% of CPP Maximum Salary (currently $14,735) is eligible
• The following eligible people can opt out:
  

• Those on appointment of 25% or less
• Those under age 35
• Those with better pension elsewhere
  

Should you opt in before age 35? (YES)

• If you retire from U of T, you’ll wish you had all years of service credited
• If you leave before retirement, you can take some form of your pension with you
• You have nothing to lose by opting in early.

If you’re interested in the pension committee, please send an email to allison.dubarry@usw1998.ca.