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SFU Academic Pension Plan Debbie Wilson Plan Administrator September 25, 2014

SFU Academic Pension Plan

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SFU Academic Pension Plan. Debbie Wilson Plan Administrator September 25, 2014. Basic Structure Of Plan. Plan type: defined contribution , or money purchase Contributions made by SFU: 10% of basic salary, less a CPP offset to a maximum of $419.40 per year - PowerPoint PPT Presentation

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Page 1: SFU Academic Pension Plan

SFU Academic Pension Plan

Debbie WilsonPlan Administrator

September 25, 2014

Page 2: SFU Academic Pension Plan

Basic Structure Of Plan

• Plan type: defined contribution , or money purchase• Contributions made by SFU: 10% of basic salary, less a CPP

offset to a maximum of $419.40 per year• For a $150,000 salary, SFU contributes $14,580.60 per year• Plan members are permitted to make contributions, on a

voluntary basis; these contributions are tax deductible• Each plan member has an account at Sun Life to which their

contributions are directed each pay period

Page 3: SFU Academic Pension Plan

Investment of Contributions

• Each plan member is responsible for determining how their contributions will be invested

• Board of Trustees have selected 9 investment options, which are regularly monitored

• GIC’s, money market, bond, equity, balanced funds• If a plan member does not make an active decision about

investment of their funds, the balanced fund is the default option

• There is no restriction on the number of funds that you can choose

• You can change your investment choice at any time

Page 4: SFU Academic Pension Plan

Options on Retirement

• Options depend on when the contributions were made – contributions made before 1993 are more flexible; they were made before pension legislation was enacted in BC

• Pre 1993 contributions and investment income can be transferred to a Registered Retirement Income Fund (RRIF) or can be taken in cash (less withholding tax)

• Post 1992 contributions and investment income are locked-in; they must be used to provide a lifetime income. They can be transferred to an insurance company to provide you with an annuity, or they can be transferred to a Life Income Fund (LIF)

Page 5: SFU Academic Pension Plan

RRIF and LIF

• Money must start to be withdrawn in the year after you set up the account

• There is a minimum amount that must be withdrawn, based on your age

• The LIF has a maximum withdrawal amount that can not be exceeded each year, based on your age

• For the LIF you can choose the withdrawal amount between the minimum and the maximum, and this choice can change every year

• You select the frequency of payments (monthly, quarterly, etc)• On your death, the remaining money is paid to your beneficiary

Page 6: SFU Academic Pension Plan

Payout ScheduleAge Minimum for

RRIF and LIFMaximum for LIF Only

62 3.57% 6.9%

65 4.0% 7.2%

68 4.55% 7.6%

71 7.38% 8.1%

75 7.85% 9.1%

80 8.75% 11.5%

88 11.96% 20.0%

• At age 65 with an account of $500,000, you need to withdraw between $20,000 and $36,000

• At age 71 with an account of $500,000, you need to withdraw between $36,900 and $40,500

Page 7: SFU Academic Pension Plan

Life Annuity

• You exchange your funds in return for a monthly income for your lifetime (and your spouse’s lifetime, if elected)

• You can select an annuity that has a guarantee period, that provides income to your spouse on your death, that is indexed to inflation

• For a given amount of money, the insurance company will determine the amount of monthly income based on your age, and based on interest rates at the time of purchase

• Once purchased, you can not change any of the details