RETIREMENT PLANNING

1. RETIREMENT PLANNING

2. Services Offered • Pension Estimates • Tax Calculations • Benefit Costing • EAP referral (1 hour financial services)

3. Notice Periods • Support Staff 2 weeks notice • Administrative Staff 30 days notice • Academic Staff 90 days notice • Pension Plan requirements

4. When Can You Retire? • Unreduced Pension – 3 Factors * Age 65 * 60/20 factor * 85 factor Reduced Pension * Age 50 – 54 with 20 years service * Age 55 with at least 2 years of service

5. Reduction Factor • 3% reduction factor for every year or .25% per month away from the closest unreduced factor

6. Calculating Your Pension Lifetime Pension 1.3% x average pensionable x credited earnings up to the service average YMPE Plus 2.0% x average pensionable x credited earnings in excess service of the average YMPE (less any applicable reduction factor)

7. Calculating Your Pension • Bridge Benefit * Available only if your pension begins before age 65 and continues until age 65 -------------------------------------------------------------- 0.7% x average pensionable x credited earnings up to the service average YMPE from Jan/66 (less any applicable reduction factor)

8. Calculating Your Pension Assumptions: Average salary is $60,000 and 30 years of pensionable service 1.3% x $43,620 x 30 years = $ 17,011.80 Plus 2% x $16,380 x 30 years = $ 9,828.00 Plus the bridge (to age 65) 0.7% x $43,620 x 30 years = $ 9160.20 TOTAL = $ 36,000

9. Calculating Your Best 5 Years • Calculated on your best 60 consecutive months. • You have the option to make your current year’s annual leave pensionable upon retirement

10. Calculating Your Pension Example: Annual leave at retirement = $10,000 Add $10,000 into the calculation for average pensionable earnings for a new average of $62,000

11. Calculating Your Pension Assumptions: Average salary is $62,000 and 30 years of pensionable service 1.3% x $43,620 x 30 years = $ 17,011.80 Plus 2% x $18,380 x 30 years = $ 11,028.00 Plus the bridge (to age 65) 0.7% x $43,620 x 30 years = $ 9160.20 TOTAL = $ 37,200 (difference = $1200 more per year)

12. Canada Pension Plan (CPP) • Introduced in Canada Jan. 1, 1966 • Monthly maximum as of Jan 1/09 was $908.75 ($10,905 annual) • CPP can begin as early as age 60, with a 6% penalty per year away from age 65. • The offset to your CAAT Pension Plan does not occur until you reach age 65, regardless of when you elect to take CPP

13. Old Age Security (OAS) • Monthly maximum as of Jan/09 was $516.96 (6204 annual) • Entitled to OAS at age 65. • Entitlement is based on residence in Canada

14. CPP, OAS and CAAT Pension Lifetime Pension is $28,039.80 Bridge Pension is $ 9160.20 = $37,200 Employee retires at age 58 _________________________________________________________________________________________________________________________________ Age 58Age 60Age65 CAAT Pension $37,200 $37,200 $28,040 CPP Pension 0 $7,634 $7,634 OAS Pension 0 $ 0 $6,204 TOTAL: $37,200 $44,834 $41,878

15. Pension Income Splitting • Pre 65 eligible payments: • Registered Pension Plan • If payment is a result of the death of a spouse, then RRSP (Registered Retirement Savings Plan), DPSP (Deferred Profit Sharing Plan) annuity, RRIF (Registered Retirement Income Fund) or LIF (Locked in RRIF)

16. Pension Income Splitting • Post 65 eligible payments: • RPP • RRSP as an annuity (not in lump sums) • RRIF or LIF • DPSP

17. Pension Income Splitting • Ineligible payments: • Old Age Security • Guaranteed Income Supplement • Canada Pension Plan (provisions exist) • If under age 65 then RRSP, DPSP, RRIF/LIF unless upon death of spouse • RRSP by withdrawal • Retirement Compensation Arrangement

18. Retiree Benefits

19. Sun Life Benefit Plans • All retirees, regardless of age or group, have the option of choosing retirement benefits from the 3 alternative plans. The premiums for plans 1 & 2 are based on a pre and post 65 structure. • Under the 3 new plans, retirees will have the same options in terms of maintaining their current life insurance until age 65.

20. Retiree Plans • Once benefits are elected, retirees WILL ONLY be able to make changes to benefits on February 1st of each year, however, the retiree can cancel coverage at any time during the year. • Changes to the elections can only be to a lesser plan or based on the “change in life provision”

21. Alternative Plan 1 • Represents the best of the current 3 active plans for extended health, hearing and vision • Dental coverage is optional under this plan • Premiums will depend on whether individual has reached age 65 • Out of country coverage – Effective September 1, 2008 – limited to $1,000,000 per person per year. Effective July 1, 2010 – NO COVERAGE • Comfort & Convenience Items (85% coverage) • Private Duty Nursing (effective July 1, 2010 – max of $25,000 per year) – currently 85% unlimited

22. Alternative Plan 2 • Covers extended health, hearing and dental Does NOT cover:(as compared to Plan 1) Semi private hospital, out of country coverage, recall exams and routine dental work and vision care (except for a one time $200 coverage for contacts following cataract surgery) Annual dental limit is $2000 total

23. Alternative Plan 2 (cont’d) • Massage therapy is covered at 50% Additional coverage:(as compared to Plan 1) 100% reimbursement for generic drugs (85% for brand name drugs)

24. Alternative Plan 3 • A “bare bones” package with option of dental Does NOT cover:(as compared to Plan 1) Semi private hospital, out of country coverage, vision care (except for a one time $200 coverage for contacts following cataract surgery and 1 eye test and glaucoma test per year) Paramedical services (except $500 physiotherapy per year, Ophthalmologist or Optometrist @85%)

25. Alternative Plan 3 (cont’d) Reduced coverage for:(as compared to Plan 1) Hearing Aids ($1500 vs. $3000 and integrated with OHIP) Private Duty Nursing ($10,000 max. per year) Orthotics & Orthopaedic shoes ($600 each 2 years) Mandatory Generic substitutions for drugs and deductibles of $100 per insured is applied

26. Life Insurance Academic • Basic Life ($10,000) $3.90 (to age 75 only) • Supplemental ($115,000) $109.25 (Premium is .95 per 1,000 in increments of 5,000, up to the amount you had at retirement)

27. Life Insurance Administrative • Basic Life ($10,000) $20.00 • Supplemental ($465,000) $441.75 (Premium is .95 per 1,000 in increments of 5,000, up to the amount you had at retirement but with a maximum of $500,000 total)

28. Life Insurance Support • Basic Life ($10,000) $20.00 • Supplemental ($65,000) $61.75 (Premium is .95 per 1,000 in increments of 5,000, up to the amount you had at retirement)

29. Additional • Please refer to the HR web page for the further details of coverage and premiums http://www.algonquincollege.com/humanresources/retireebenefits.htm

30. Useful Web sites CPP, OAS, GIS: http://www.sdc.gc.ca/en/home.shtml Canadian Association of Retired Persons: http://www.fifty-plus.net/ Ontario Colleges Retirees Association: http://www.caatretirees.org/ CAAT Pension Plan: http://www.caatpension.on.ca/index.html Human Resources Web Page: http://www.algonquincollege.com/humanresources/informationcentre.htm#PensionRetirementResources

31. Retiree Privileges: • You have the option of maintaining your email account and server access from home • You can take courses at the College on the same basis as full time employees • Access to College facilities

32. Human Resources Contacts Pension estimates: Please contact either Connie or Jen Connie (x5119): powersc@algonquincollege.com Jennifer (x5367): drummoj@algonquincollege.com Benefits questions: Please contact either Kelly or Diane Diane (x2080): rossmad@algonquincollege.com Kelly (x5121): irwink@algonquincollege.com