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Who is eligible to join the NSAHO Pension Plan?
Membership in the Plan is open to employees of those
organizations that participate in the Plan. Each employee must:
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be in a group that is designated by the employer as “included in the Plan”;
and,
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meet the Plan’s participation rules (See “When can I join?” below).
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When can I join?
There are two types of participation:
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Compulsory – If you meet the Plan’s definition of a
full-time employee
, you must join the Plan within three months of becoming a full-time employee
(and you can join the Plan immediately upon your date of hire).
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Optional – If you meet the Plan’s definition of a
part-time employee , you may choose to join the Plan once you have:
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completed 24 months of continuous employment, and
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either worked 700 hours or earned at least 35% of the Year’s Maximum
Pensionable Earnings (YMPE) in each of the two
calendar years prior to enrolling.
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How much do I have to contribute?
You and your employer share the cost of the benefits
provided by the Plan. As a Plan member, you are required to contribute:
Your
contributions, which are tax deductible, will be deducted from your pre-tax
pensionable earnings each pay.
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Is my pension secure?
Yes. The Board of Trustees has a legal responsibility to
ensure that there is enough money in the pension fund to meet the Plan’s
obligations.
To ensure the Plan is adequately funded, pension plan law
requires that a valuation be conducted by an independent actuary at least every
three years. This valuation is used to assess the Plan’s financial status and
to help set contribution rates.
To the extent that the Plan’s assets fall short of required
funding levels, there are both legal requirements and internal policies that
would trigger an increase in contribution rates to bring the Plan back to an
adequate funding level.
In addition, the Plan has implemented a number of
safeguards to help protect the assets of the pension fund. These include:
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a well-defined governance structure,
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formal investment guidelines, and
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clearly documented controls and reporting procedures.
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Who decides how the pension fund is invested?
The Board of Trustees approves an Investment Asset Mix
Policy and a “Risk Budget”. This Policy establishes the percentage of the
Plan’s assets that can be invested in each asset class (e.g., Canadian
equities, U.S. equities, and so on). The Risk Budget ensures that the Plan’s
investments are run at an appropriate risk level.
Staff evaluates professional investment management entities
from all over the world and allocates a small percentage of the total assets
(usually less than 5% per investment management entity) to the most suitable
candidates.
The Board of
Trustees reviews the investment results and risk levels on an ongoing
basis.
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Can I opt out of the Plan if I reduce my hours?
No. Once you are enrolled in the Plan, you cannot withdraw
from the Plan as long as you remain an employee – even if your hours of work
and earnings fall below the initial enrolment criteria for part-time employees.
Your participation in the Plan will end only when you terminate your
employment, or retire, or die.
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Can I withdraw my money from the plan while I am a member?
No. Cash withdrawals are not permitted by the Plan. As long
as you are a member, your benefits must remain in the Plan.
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What happens to my pension benefits if I terminate my employment before
retirement?
If you no longer work for an employer that participates in
the NSAHO Pension Plan and have two or more years of Plan membership, you will
be entitled to a benefit from the Plan.
The amount of that benefit, and the options available for
receiving it, will depend on whether you already qualify for an immediate
pension. In any event, your pension benefits must be used to provide an income
in retirement – which means you cannot withdraw the benefit as a lump-sum cash
payment.
If you no longer work for an employer that participates in
the NSAHO Pension Plan and have less than two years of Plan
membership, and are not eligible for an immediate pension, you will receive a
refund of your contributions, plus interest.
(Tell me more about
termination benefits.)
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What happens to my pension benefits if I die before retirement?
If you have two or more years of Plan membership,
a benefit will be paid to your surviving spouse,
dependent children,
named beneficiary or to your estate (as applicable). The amount of the
benefit, and how it is paid, will depend on your years of
continuous service and your marital status at the date of your death.
If you have fewer than two years of Plan
membership, and are not eligible for an immediate pension, the contributions
you made to the Plan, plus interest, will be paid to your spouse, common-law
partner, named beneficiary or to your estate (as applicable).
(Tell me more about
pre-retirement death benefits.)
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How do I apply for my pension?
Once you decide on the date you want to retire, you must
inform your employer’s Human Resources office. You will need to:
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complete the required forms; and,
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provide other information we need to start your pension on your proposed
retirement date.
The employer will communicate directly with Plan staff on
all matters related to the start of your retirement pension.
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When can I retire?
The normal retirement age is 65; however, you can retire
before that.
You can retire before age 65 with an unreduced pension if
you are:
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age 60 or over with at least 10 years of continuous
service; or
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from age 55 through age 59, if your age plus your years of continuous service
equals 85 points or more (The Rule of 85).
You can retire before age 65 with a reduced pension if:
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you are age 50 or over with 10 or more years of continuous service;
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you are age 55 or over (regardless of how much continuous service you have); or
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your age plus continuous service equals 80 points or more.
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How much pension will I receive?
Your pension is based on a pre-set formula that takes into
account your annualized pensionable earnings
and your years of credited service. In a
nutshell, your monthly benefit will equal:
(Tell me more
about the pension formula.)
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Will I have enough to retire?
That depends on a number of factors, such as:
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how long you’ve contributed to the Plan,
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your retirement age,
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your personal savings,
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your government benefits, and,
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most importantly, your retirement income needs.
If you are a long-service member of the Plan, your pension
will probably be a significant part of your total retirement income. But it’s
not the only part. Your total retirement income will come from your NSAHO
pension, government benefits, and personal assets.
To ensure that you reach your retirement income goals, you
should consider talking to a qualified retirement planner.
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Will my pension be adjusted for inflation?
Yes, once you retire the NSAHO Pension Plan provides guaranteed
cost-of-living adjustments (COLA) to your NSAHO pension.
Each January 1st, your monthly lifetime pension (and your
monthly bridging benefit, if applicable) will be adjusted by 100% of the
increase in the previous year’s cost of living index, up to a maximum of 3% per
year.
If the year-over-year increase in the CPI exceeds the 3%
maximum covered by the Plan, the Board of Trustees will consider whether
further increases for any amount over 3% will be granted.
To measure the year-over-year increase in the cost of
living, we use the Consumer Price Index (CPI) figures for Canada as of each
September 30th.
Keep in mind that if you retire part way through the year,
you will receive only part of the annual increase in the year following your
retirement. For example, if you start to collect a pension July 1, you will
receive one-half of the annual cost-of-living adjustment on the following
January 1st.
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Will tax be deducted from my pension benefits?
The NSAHO Pension Plan must, by law, deduct tax from your
pension if it exceeds prescribed levels. How much tax is deducted will depend
on government tax tables, as well as other information.
You may be able to arrange for less tax to be deducted if
you are eligible for federal or provincial tax credits. To tell us about any
tax credits you may be eligible for, simply send us a completed
TD1 form (Personal Tax Credits Return).
You can also use the TD1 form if you want to have more tax
deducted from your pension (perhaps because you have income from other
sources). Alternatively, you may write to us explaining the specifics. Please
ensure that you specify the exact dollar amount of the extra tax that you want
taken from your pension over and above any tax that will be deducted normally
as required by government tax tables.
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What is a past service purchase?
As an active member of the Plan, you may have the opportunity to purchase certain periods of past service
that had not been credited under the Plan.
Certain restrictions and time limits apply. Please review the
Past Service Purchases section of our website for further details.
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Why would I purchase past service?
Purchasing periods of past service will increase the amount
of your pension and, in some cases, may allow you to retire earlier.
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What is a “pension adjustment” (PA)?
A PA represents the deemed value of the pension benefit you
earned in a registered pension during the calendar year. A PA will be
calculated for you each year that you participate in the Plan.
Your PA is reported on your annual T4 tax slip. CRA will
reduce your personal RRSP contribution room in a given year by the amount of
your PA that was reported to them for the previous year. (Example: the PA
reported on your 2007 T4 tax slip will be used by CRA in calculating your
personal RRSP contribution room for 2008.)
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Can I name anyone I want as my beneficiary?
Yes. However, keep in mind the following:
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If you die before retirement, Nova Scotia pension law states that your spouse
or common-law partner (as applicable) as of your date of death
will automatically receive death benefits from the Plan – even if you have
named a different beneficiary.
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If you die after retirement, your spouse or common-law partner (as applicable)
as at your retirement date will automatically receive death benefits
from the Plan – even if you have named a different beneficiary.
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How do I change my beneficiary?
To change your beneficiary, simply complete the Change of Beneficiary section of the
Employee Change of Information Form and submit it to your human resources department.
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Can I continue to make contributions during a leave of absence?
The short answer is yes you can contribute for a period of
leave of up to two years. But here are some details:
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If you are on an approved leave with
pay, both you and your employer will continue to contribute to the Plan as if
you were at work, and you will continue to earn pension benefits based on those
contributions.
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If you are on an approved pregnancy or parental leave without
pay or in receipt of Workers' Compensation Board benefits, you can choose to
contribute to the Plan during the period of your leave.
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If you choose to contribute, your employer must pay the employer’s share,
unless there is a collective agreement or employment contract that requires a
different cost sharing arrangement. You must decide before your leave begins
whether to contribute during the leave.
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If you are on an approved leave without pay (for any reason other than
a pregnancy or parental leave), you can choose to contribute to the Plan during
the period of the leave. If you choose to contribute, you are required to pay both
the employee and employer share of required contributions (unless there is a
collective agreement or employment contract that requires a different cost
sharing arrangement.) You must decide before your leave begins whether to
contribute during the leave.
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What happens if I become totally disabled?
If you are receiving monthly benefits from your employer’s
Long Term Disability (LTD) plan:
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your Plan membership will continue and you will still earn continuous service;
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all your required contributions will be waived during the LTD benefit period;
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you will continue to earn credited service in the Plan; and
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your pensionable earnings during this period will be deemed by the Plan to be
equal to your pensionable earnings as at your date of disability.
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Is my spouse (or my common-law partner, if applicable) entitled to a share of
my pension if our marriage/relationship breaks down?
Under Nova Scotia pension law, if your marriage or
common-law relationship breaks down, your spouse
or common-law partner (as the case may be) may
be assigned up to one-half of the pension benefits you earned during the years
applicable to the marriage or the common-law relationship.
You and your spouse (or common-law partner, if applicable)
must decide if the pension benefits will be split. However, in order to act on
a direction to split pension benefits, the Plan must receive either a court
order or a separation agreement.
Note: As with the splitting of any other
assets upon marriage or common-law relationship breakdown, to split pension
benefits (or not) may be a major financial decision. If you are involved in a
marriage or common-law relationship breakdown, you should consider the advice
of your lawyer and your financial advisor before you agree to split your
pension.
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Am I required to stop working and start to receive my
retirement pension when I reach age 65?
There are really two separate questions here:
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can you continue to work with your Employer beyond age 65? and
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if the answer to (1) is “yes”, can you continue to participate in the pension
Plan?
Please note the following:
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Whether you continue to work with your Employer after you reach age 65 is a
matter to be decided between you and your Employer. The NSAHO Pension Plan has
a Normal Retirement Date (the first day of the month coincident with,
or next following, your attainment of age 65), but it allows Members who
continue to be employed with their employer beyond age 65 to postpone their
pension start date and continue participation in the Plan, within certain
limits-- see (2) below.
You will need to finalize this matter with your Employer before you reach age
65.
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If you continue your employment with your Employer beyond age 65, you will also
continue normal participation in the Plan. However, even though you and your
Employer may have agreed that you can work as long as you want to after you
become age 65, the laws that govern our Pension Plan impose strict limits. The
Income Tax Act of Canada requires that you end your participation in our Plan
and begin to receive your monthly pension from the Plan not later than December
1 of the year in which you become age 71.
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