How to Read your York University Pension Plan Statement

How to Read your York University
Pension Plan Statement
Presented by the Pension & Benefits office
Pension Statement
Mandatory that a statement is produced for each member
every year.
Statement estimates pension at normal retirement date.
The statement should not be used for retirement planning
purposes.
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Income Tax Act (ITA)/Canada
Revenue Agency (CRA)
There is a combined maximum amount that can be
contributed to a pension plan or RRSP
2011 limit is 18% of earnings to a maximum of $22,970
whichever is less
There is also a limit to the amount of pension that can
be earned in a Defined Benefit, (Minimum
Guarantee) Pension Plan
2011 limit is $2,552.22 per year of credited service (to a
maximum of 35 years of service)
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Historical data – Contribution
Maximums
1996 – 2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
$13,500
$15,500
$16,500
$18,000
$19,000
$20,000
$21,000
$22,000
$22,450
$22, 970
18% limit has applied and continues to apply
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Historical data – Defined Benefit
(Minimum Guarantee) limits
1990 – 2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
$1,722.22
$1,833.33
$2,000.00
$2,111.11
$2,222.22
$2,333.33
$2,444.44
$2,494.44
$2,552.22
1/9 of the contribution limit
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December 31, 2010 Pension Statements
The University does not know what the money
purchase contribution limit or the minimum
guarantee benefit limit will be moving forward.
The December 31, 2010 pension statement uses
the limits that are currently known.
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December 31, 2010 Pension Statements
The pension statement documents the employee’s key
pension information including employee and
employer contributions along with credited service.
For those members affected by the ITA/CRA limits they
have seen a decrease in the minimum guarantee
figure. The benefit formula/calculation has not
changed. The member will receive the pension
they are entitled to at their retirement.
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FAE and MGP formula
Final Average Earnings - York uses a five year
highest earnings – the five years do not have to
be consecutive
1.4% of FAE up to the average YMPE,
PLUS
1.9% of FAE above the average YMPE,
MULTIPLIED BY
Credited service
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Credited Service vs. Continuous
Service
Credited Service – The total number of years of
pension plan membership. You can not earn
service if contributions by you or the University
are not maintained at the full rate for each
month in the calendar year.
Continuous Service – Your unbroken service
with the University including vacation,
authorized sick leave, and authorized leaves of
absence.
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MPC
Money Purchase Component
Employee Contributions, PLUS
Employer Contributions, PLUS
Rate of Return (can be positive or negative)
Employee contributions are:
4.5% up to the YMPE, PLUS
6% above the YMPE
Employer contributions are the same as above
PLUS an additional 3%
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YMPE
Year’s Maximum Pensionable Earnings
Canada Revenue Agency establishes this figure each year
2011 = $48,300
2010 = $47,200
2009 = $46,300
2008 = $44,900
2007 = $43,700
2006 = $42,100
2005 = $41,100
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Non Reduction Reserve
The Employer contributes an additional 3% in
pension contributions to your pension plan
account
At retirement, if you elect to take a monthly
pension this 3% is set aside to help fund the
reserve so your pension does not reduce in
your hands
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Special Transferred Contributions
If pension funds are transferred from another
registered pension plan without service from
that pension plan the funds will show in this
line
These funds are affected by mortality table
changes and the rate of return
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Additional Voluntary Contributions (AVCs)
The Pension & Benefits office can determine how
much room you have to make AVCs into the York
pension plan
AVCs are like making RRSP contributions but you
receive the tax advantage immediately
You may transfer non-locked RRSP funds into the York
pension plan and they would appear in this row
AVCs/transferred in non-locked RRSP funds are
affected by the mortality table and the rate of return
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Historical Rate of Return information
2000
11.0043%
2001
1.5096%
2002
-4.6074%
2003
14.6429%
2004
9.7468%
2005
11.7060%
2006
13.9244%
2007
-0.5356%
2008
-19.2429%
2009
15.9819%
2010
9.7618%
This affects the MPC, AVC and STC portions of the pension plan15
December 31, 2010 Pension Statements
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Example 1
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Example 2
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Form of Pension
If single your pension statement shows a single life pension
with no guarantee
If married your pension statement shows a joint & survivor
60% with no guarantee
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YURP
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York University Retirement
Planner (YURP)
The YURP will have the 2011 results factored in once the
December 31, 2011 pension statements have been posted –
likely May 2012
Until then any estimates you run uses the December 31, 2010
year end data
Individuals may change the ROR assumption and salary rate
assumption
Individuals may also add RRSP funds to see the effect it will
have on the pension
The link to YURP is: https://www.yorku-ret.ca/
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Contacting the Pension & Benefits Office
You may contact the Pension & Benefits office by phone, e-mail or make an
appointment to meet with us.
Call 416-736-2100
Last name Initial
Counsellor
Extension E-mail
A–E
Margaret Crowe
20377
G–L
Andreea Madaras 20702
[email protected]
M-R
Yvonne Rego
33912
[email protected]
F, S – Z
Peter Chakonza
20617
[email protected]
[email protected]
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