pre-retirement information session · in order for you to receive your first pension deposit on...

Pre-Retirement Information Session

November 2, 2018

Thinking of Retiring? Consider the following: When to retire – this is a personal decision; no one time is best for everyone. We

encourage speaking with financial advisors to determine what is best for you!

Ask your Pay and Benefits Specialist for an estimate of your vacation/severance pay (have a tentative date in mind)

Start thinking of how you are going to handle your vacation/severance pay

Retiree Benefits on our blog site at https://rrc.ca/hr/information/pension/

You may request a retirement package from CSSB (including all forms) within 6 months prior to retirement date. The earlier you complete the forms and return to CSSB the smoother the transition from work to retirement will happen. CSSB has indicated that they require the forms 4 – 6 weeks prior to your date of retirement in order for you to receive your first pension deposit on time. Documents not submitted within 30 days after retirement may cause serious issues with your options and will result in missed payments. A meeting with a member of the CSSB is not required, but is highly recommended.

https://rrc.ca/hr/information/pension/

Thinking of Retiring?Severance

As per the Collective Agreement: Employees who retire with nine (9) or more years of continuous employment shall

be paid severance pay in the amount of one (1) weeks’ pay for each complete year of continuous employment or portion thereof, but the total amount of severance pay shall not exceed fifteen (15) weeks.

Is also eligible to receive 2 additional weeks as follows:

with 20 or more years of service , for a maximum of 17 weeks pay





Example: employee retiring w ith 27 years of continuous employment w ill be awarded 15 weeks pay plus 2 additional weeks for 20 years of service and 2 more weeks for 25 years of service for a total of 19 weeks pay.

Severance, things to consider:

Transfer funds to RRSP or Cash out?

If you are transferring to an RRSP, you will require a Notice of Assessment (NOA) from current Income Tax filed (can be obtained from Canada Revenue Agency (CRA)

Employee must Terminate from all positions at the college in order to transfer funds to RRSP if using the Retiring Allowance (see next page for interpretation)

**It is the responsibility of the employee to advise all other departments that they currently work under of their official retirement date** e.g.

Continuing & Distance Education

Thinking of Retiring?


Retiring Allowances (AKA Severance Payment):Retiring allowances are reported on the T4 slip.

A retiring allowance (also called severance pay) is an amount paid to officers or employees when or after they retire from an office or employment, in recognition of long service or for the loss of office or employment.

If you pay a retiring allowance to a resident of Canada, deduct income tax from any part you pay directly to the recipient using the lump-sum withholding rates.

Transfer all or part of the retiring allowance **eligible retiring allowance on the Retirement Estimate**There are situations when a person can transfer all or part of a retiring allowance to a registered pension plan(RPP) or a registered retirement savings plan (RRSP). For more information, go to Transfer or a retiring allowance at

www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/completing-filing-information-returns/t4-information-employers/special-situations/transfer-a-retiring-allowance.html

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/completing-filing-information-returns/t4-information-employers/special-situations/transfer-a-retiring-allowance.htmlhttps://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/completing-filing-information-returns/t4-information-employers/special-situations/transfer-a-retiring-allowance.html

If you wish to cash out all or a portion of your severance payment, these are the applicable tax rates:

Under $5, 000.00 = tax deducted @ 10%$5, 000 - $15, 000 = tax deducted @ 20%Over $15, 000 = tax deducted @ 30%


Thinking of Retiring? Vacation Carry Over for Retirement (Policy H7)

Main points to remember: Carry Over amount can not exceed annual entitlement The maximum time period for carryover for retirement purposes

is 5 years. As soon as 1 day is set aside, retirement should fall within 5 years.

Employee can request to carryover a max of 15 days prior to providing a confirmed retirement date

If employee requests more than 15 days, they are required to provide written notice of retirement date

Combined total of carryover and earned vacation credits cashed out at retirement should not exceed 362.5 hours (50) days

WebAdvisorGo to ‘Employee Profile’ RRC Leave Plan Summary – review balances (always in hours)

Thinking of Retiring?Vacation, things to consider:

Transfer funds to RRSP or Cash out?

If you are transferring to an RRSP (net pay after applicable deductions), you will require a Notice of Assessment (NOA) from most recent Income Tax filed (can be obtained from Canada Revenue Agency (CRA)

Amount being transferred will be the balance after Pension contributions and applicable statutory deductions (CPP & EI), your NET pay.

**It is the responsibility of the employee to advise the other departments that they currently work under of their official retirement date**

Vacation, things to consider cont.

CSSB Pensionable earnings include vacation pay paid on termination, retirement or death, up to the lessor of:

2 years of normal vacation accruals, being the annual accrual rate in the fiscal year of termination, death or retirement plus the annual accrual rate in the prior fiscal year, or

Example: Vacation entitlement of 20 days per year, maximum of 40 days’ vacation cash out subject to pension deductions, any unused vacation days over 40 days will be cashed out not subject to Pension deductions

50 days.

Example: Vacation entitlement of 44 days per year, maximum of 50 days’ vacation cash out subject to pension deductions, any unused vacation days over 40 days will be cashed out not subject to Pension deductions

*Note that the maximum accrual rate is reduced proportionately if the employee worked on a part-time basis in either of the two fiscal years prior to termination, death or retirement.*

This provision does not limit the number of days of vacation that can be paid out, only the number of days of vacation pay that can be included as CSSB pensionable earnings.

Should you have more than the allotted CSSB pensionable vacation as outlined above, payment of these hours will be made upon termination.

TRAF members do not have the option for Pensionable vacation payout upon retirement.


Vacation, things to consider cont.

Should you wish to put vacation aside for retirement, this is now done as a Maestro process. Please go to your main HUB page

*note this is not considered your official retirement notification*•Look under My Applications

• Click on the Maestro

• Under My Processes please locate the Human Resource Services eForms (MP014)

• Type of request will be Vacation Carry Over for Retirement Purposes and complete accordingly.


Sample of Complete EstimateBENEFITS AVAILABLE – Estimate Only

Employee Name: ____________________ Retirement Date: July 5, 2017__________ Start Date: ____________________ Years of Service: 27 years_____________ Severance: $31,221.04 (19 wks x 36.25 hrs per wk x $45.33/hr = $ 31,221.04) Amount Transferable to Registered Retirement Savings Plan $20,000.00 (calculated on an individual basis as per CRA guidelines if applicable) (If this is your choice, Human Resource Services will require a completed “Transfer of Contributions" form [copy attached].) P lease note that employees MUST terminate from all positions at the college in order to roll over their severance into an RRSP . I f not, it w ill be cashed out and tax deducted at the applicable rate as indicated below . Eligible Retiring Allowance: $20,000.00 [(1986-1995) $2, 000/yr x 10 years = $20,000.00] Non-Eligible Retiring Allowance: $11,221.04 If this is your choice, Human Resource Services will require a completed “Transfer of Contributions” form If your severance payment is cashed out, a memo stating to do so is required by Payroll. Applicable tax rates deducted are: Under $5,000.00 = tax deducted @ 10% $5,000 - $15,000 = tax deducted @ 20% Over $15,000 = tax deducted @ 30% _______________________________________________________ Vacation Pay: Vacation calculation subject to change pending attendance not yet received YEAR # OF HOURS WAGE TOTAL PAYMENT Remaining Vacation Balance (includes set aside for retirement) 107.29 $45.33 $4,863.46 Accrual (up to June 30, 2017) 292.71 $45.33 $13,268.54

Total Vacation Payout 400.00 $18,132.00

Pensionable Vacation (pension deduction at 8% or 9% of vacation pay) up to 362.5 (max) $16,432.13

Non Pensionable Vacation 37.50 $1,699.87 *Taxable (at appropriate tax rate) if not transferred to an RRSP. Amount showing is not the amount that will be transferred as applicable Pension deduction must be applied to first 362.50 hrs (50 days) of your vacation pay out. CPP & EI must also be deducted from any vacation pay that is being transferred. Final Net vacation pay is what would be transferred. Your most recent “Notice of Assessment” is required in order for transfer to be allowed. If you choose to cash out vacation pay (not transfer to an RRSP) a memo stating to do so is required by Payroll.

BENEFITS AVAILABLE – Estimate Only

Employee Name:

____________________

Retirement Date: July 5, 2017__________

Start Date:

____________________

Years of Service: 27 years_____________

Severance:

$31,221.04

(19 wks x 36.25 hrs per wk x $45.33/hr = $ 31,221.04)

Amount Transferable to Registered Retirement Savings Plan $20,000.00 (calculated on an individual basis as per CRA guidelines if applicable) (If this is your choice, Human Resource Services will require a completed “Transfer of Contributions" form [copy attached].) Please note that employees MUST terminate from all positions at the college in

order to roll over their severance into an RRSP. If not, it will be cashed out and tax deducted at the applicable rate as indicated below.

Eligible Retiring Allowance: $20,000.00

[(1986-1995) $2, 000/yr x 10 years = $20,000.00] Non-Eligible Retiring Allowance: $11,221.04

If this is your choice, Human Resource Services will require a completed “Transfer of Contributions” form

If your severance payment is cashed out, a memo stating to do so is required by Payroll. Applicable tax rates deducted are:

Under $5,000.00

= tax deducted @ 10%

$5,000 - $15,000 = tax deducted @ 20%

Over $15,000

= tax deducted @ 30%

_______________________________________________________

Vacation Pay: Vacation calculation subject to change pending attendance not yet received

YEAR

# OF HOURS

WAGE

TOTAL PAYMENT

Remaining Vacation Balance (includes set aside for retirement)

107.29

$45.33

$4,863.46

Accrual (up to June 30, 2017)

292.71

$45.33

$13,268.54

Total Vacation Payout

400.00

$18,132.00

Pensionable Vacation (pension deduction at 8% or 9% of vacation pay)up to 362.5 (max)

$16,432.13

Non Pensionable Vacation

37.50

$1,699.87

*Taxable (at appropriate tax rate) if not transferred to an RRSP. Amount showing is not the amount that will be transferred as applicable Pension

deduction must be applied to first 362.50 hrs (50 days) of your vacation pay out. CPP & EI must also be deducted from any vacation pay that is being transferred. Final Net vacation pay is what would be transferred. Your most recent “Notice of Assessment” is required in order for transfer to be allowed. If you choose to cash out vacation pay (not transfer to an RRSP) a memo stating to do so is required by Payroll.

Thinking of Retiring?Retiree Benefits

On the RRC Microsite please go to https://rrc.ca/hr/information/pension/for Retiree Benefits details

4 Great West Life (GWL) options to choose from: 1. Ambulance/Hospital coverage

2. Ambulance/Hospital & Extended Health coverage

3. Ambulance/Hospital & Extended Health & Basic Dental coverage

4. Enhanced Coverage

Your personal circumstances (number of dependents) will determine the cost.

Pay & Benefits will provide you with a copy of the GWL Retiree Application form within your Retirement Package.

https://blogs.rrc.ca/hr/information/pension/

Retiree Health Benefits

Submit application to HUB STRATA

Standard Application – whether or not enrolling

Payments are done through Pre-authorized Debit

Retiree Health Plan Account (NEW Policy# 160978); please destroy all other benefits cards

Current RRC Health Benefits will cease on last day of work if declining Retiree Benefits or if you opt into Retiree Benefits the last day of retiring month

Contact HUB STRATA: 1-866-787-2826 ext# 453 or email: [email protected]

mailto:[email protected]

Decision made

Contact CSSB/ TRAF

Employee

Submit in writing to Manager/ Director/Chair/

Dean

Human Resource Consultant (HRC)

Pay & Benefits Specialist (PBS) Employee

Retirement Package

EXIT Maestro

OVERTIME BALANCES

Follow these steps:

Retirement PackageYou will be provided with your retirement package and an explanation

of its contents:

Official Retirement confirmation letter

Specific to your needs

Outlines your payouts

Calculated breakdown of your final Severance and/or Vacation pay

Forms:

Transfer of funds to RRSP (Severance & Vacation Pay)

Retiree Health Benefit Options & Information & Application

CSSB Group Life Insurance Change

‘Acknowledgement upon Retiring from RRC’ legal document

Your Pay and Benefits Specialist may also discuss with you:

Parking; you are responsible to notify parking services to cancel parking services (Parking Request in Maestro)

All Charities Other College Donations Remaining VRWW deduction balances

Retirement Package

The big day!

RRC staff ID card – return to HR

Ensure all Retirement Package forms/documents are submitted to Pay & Benefits

Final payment of Severance/Vacation will be made upon receipt of final attendance

T4’s – ‘Withhold Consent’? On WebAdvisor be sure to unconsent, if you have consented to online T4’s. Your T4 will be mailed to you

Other Tips & Information

Ensure SIN card is updated with current surname

Retiring after expiry of current Collective Agreement

Advise service providers of Plan# change (i.e. pharmacy) once new benefits cards have been received

Address, phone or email changes should be communicated to Payroll to ensure your T4 is sent to the correct address if you have moved, or relocated to another province/country

As a retiree of RRC, you will still have access to the Lifeworks (EFAP) program. https://theboardofgovernorsofredrivercollege.lifeworks.com/life/employee-assistance/articles/life-changes/midlife-and-retirement

Pension Funds - differencesRegistered Pension Plans (RPP):

Civil Service Superannuation Board Fund (CSSB) Teachers Retirement Allowances Fund (TRAF)

Government plans:

Canadian Pension Plan (CPP) Old Age Security (OAS)

Personal plans:

Registered Retirement Savings Plan(RRSP)

Thank You for your time

Questions? Comments?

If you have any questions, contact Human Resource Services

204-632-2319

Slide Number 1Thinking of Retiring? Thinking of Retiring?Slide Number 4Slide Number 5Slide Number 6Thinking of Retiring?WebAdvisorThinking of Retiring?Slide Number 10Slide Number 11Sample of Complete EstimateThinking of Retiring?Retiree Health BenefitsDecision made��Retirement PackageSlide Number 17The big day!Other Tips & InformationPension Funds - differencesThank You for your time