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5/15/2018

​What do most members do with their pension funds at retirement?


As a member of the CSS Pension Plan, you have numerous options for converting your pension funds into a retirement income. Some of your options are available directly from the Pension Plan, while others are from financial institutions and insurance companies.

Most defined contribution (DC) pension plans require retiring members to transfer their pension funds out of the pension plan to a financial institution or insurance company. The CSS Pension Plan is one of the very few DC pension plans in Canada that offers its own retirement income options. In other words, at retirement you don’t have to transfer your pension funds out of the CSS Pension Plan if you don’t want to.

The CSS Pension Plan offers the following retirement income options:

  • Traditional monthly pension, which is very similar to life annuities from insurance companies

  • Variable Benefit (VB) payment, which is very similar to the Life Income Funds (LIFs) and Prescribed-RRIFs (PRRIFs) from financial institutions

Members approaching retirement often ask the Plan: What do most members do with their pension funds at retirement?

“It’s a really personal decision,” says Fiona May, a CSS Pension Plan Consultant (PPC) who assists members with the decision-making process. “You just need to gather all of the information and make a decision about your pension funds that works best for you.”

But, if you really want to know what most members do, recent statistics show that on average two out of every three retiring members choose to receive their retirement income directly from the CSS Pension Plan. In other words, only a third of the retiring members transfer their pension funds out of the Plan.


So why do most members choose to receive their retirement income directly from the CSS Pension Plan?

“It’s such a big decision for people, but one of the reasons members choose to receive their retirement income directly from the CSS Pension Plan that I hear frequently is because of the longevity of the Plan and continuity of the service we offer,” says Rhonda Rodh, PPC.

Along with finding comfort in the Plan’s 79-year history, there are other reasons why you might choose to leave your funds in the CSS Pension Plan at retirement:

  • You don’t have to shop around for a new place to invest your pension funds at retirement.

  • The traditional monthly pension from the CSS Pension Plan will typically provide you with a higher payment than a life annuity from an insurance company.

  • With the VB option, you have the same investment fund options available to you in retirement as you do before retirement. As a result, you can continue to benefit from the Plan’s low investment management fees (i.e. management expense ratios – MERs) in retirement as you do now before retirement.

  • You don’t have to put all of your pension funds into just a traditional monthly pension or VB payments – you can mix and match.

  • If you like, you can convert some or all of your pension funds in the VB option into a traditional monthly pension at a later date.

“I think the vast majority of members feel glad to be a part of the CSS family,” says Coleen Berge, PPC. “When I speak to members who decided to take a CSS retirement income option years ago, they are usually very happy they chose to stay.” 


Article from the spring 2018 issue of TimeWise