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10/26/2020

​What are the options for my funds

when my employment terminates?

So, you’ve left your employment, and you may be wondering about what to do with your funds in the Pension Plan. Your first option is to essentially do nothing. In other words, you can leave your funds in the Plan until further notice. The second option is to withdraw or transfer your funds out of the Plan.

Let’s first discuss leaving your funds in the Plan. If you choose to do this, you can still exercise the second option later on, if you wish. By leaving your funds in the Plan, you continue to be a member of the CSS Pension Plan, and as they say “membership has its privileges” which are:

  • You continue to receive the same rate of return as other members of the Plan, and benefit from the Plan’s low investment management fees1
  • As a member who is no longer working for an employer member of the Plan, you can no longer contribute to the Plan. However, you can transfer in any RRSPs that you may already have or might contribute to in the future.
  • You will continue to have access to our Pension Plan Consultants, who can assist you with:
    • Your investment choices in the Pension Plan
    • Sorting out your retirement income options
    • Putting together a retirement plan
    • Any questions you may have about your pension funds or being a member of the Plan
  • Get a personalized annual statement, which is distributed in February each year 
  • Sign up for free quarterly email updates 
  • Be able to access your account information online via the myCSSPEN portal, where:
    • You can check your account balance
    • Submit investment instructions
    • Access various tools and calculators to assist in planning for retirement, including our Basic Retirement Planner
  • Be able to attend our free Retirement Income Options (RIO) workshops 2
  • Be able to receive a retirement income option directly from the Plan. Many defined contribution pension plans in Canada require that their members must transfer their pension funds out of the plan at retirement. This is not the case with the CSS Pension Plan. You can transfer your funds out if your want, but you don’t have to. In fact, most retiring members choose to receive their retirement income directly from the Plan. The retirement income options available form the Plan are:
    • Traditional monthly pension: an annuity type payment that ensures a fixed payment for the rest of your life (and your spouse if applicable)
    • Variable Benefit (VB)3 payments: periodic withdrawals from your account. Upon your death all remaining funds go to your surviving spouse (if applicable), or to your beneficiaries or estate.
If you are retiring and if you haven’t already done so, you should get in touch with one of our Pension Plan Consultants to find out about your retirement income options.

SURVIVOR BENEFITS

If you leave your pension funds in the CSS Pension Plan, and you pass away before converting the funds into a retirement income, all the funds in your account will go to your heirs. According to pension legislation, your surviving spouse has first claim to your pension funds. If you don’t have a surviving spouse, or he/she has signed a waiver form giving up his/her first claim status, then all your pension funds will be paid to your designated beneficiary(ies) or estate.

WITHDRAWAL AND/OR TRANSFER OPTIONS

If or when you decide to withdraw or transfer your funds from the Pension Plan, your options are as follows:
  • Locked-in Funds:
    • Transferred to another Registered Pension Plan (RPP)
    • Transferred to a Life Income Fund (LIF) or Prescribed RRIF (PRRIF) with a financial institution, if you’ve reached your early retirement date
    • Transferred to a Locked-in Retirement Account (LIRA) with a financial institution
  • Non-locked-in Funds (if any):
    • Withdrawn in cash, subject to income tax
    • Transferred to an RRSP or RRIF with a financial institution

What if I’m going from one employer member to another?

If you are going from one employer member to another, then your employment is not terminating. This is considered an employment transfer. Accordingly, none of the withdrawal or transfer options described in this article would be available to you.

By going from one employer member to another, your service is considered continuous. When your pension contributions start with your new employer, you pick up from where you left off with the previous employer – in other words, your pension contributions go into the same account you already have.

There are approximately 300 different co-operative and credit union organizations that participate in the CSS Pension Plan for their employees.

If you have any questions about your pension funds in the CSS Pension Plan, please do not hesitate to contact us.

1 Investment management fees are often referred to as Management Expense Ratios or MERs. The MERs of the CSS Pension Plan’s investment funds compare very favourably to those in the retail market.
2 These workshops have been temporarily suspended due to the COVID-19 pandemic.
3 VB payments are available to members whose pension funds are subject to BC, AB, SK, MB, ON, NS or Federal pension legislation. Except for SK, all other jurisdictions impose a maximum spending limit on your locked-in funds.

Article from the fall 2020 issue of TimeWise.