When to Retire?
When you decide to retire, you must notify the
college within a reasonable
delay.The College will then notify CARRA. It normally takes notice of three
to four months to ensure that your first pension cheque arrives during
the first month of retirement. In terms of the College, Art. 5-1.06 states,
“A permanent professor may resign, effective the following teaching year,
by giving written notice to the College not later than April 1.” If at all possible,
we encourage you to respect this deadline. JACFA believes however
that legally you can resign at any time. This may, however, cause delays
in receiving your pension and serious inconvenience to your department.
The College has agreed to accept retirements as of the beginning of the
summer vacation period, paying the two months of vacation pay owed as
a lump sum and pension income to begin as of June 15. However, this will
affect the number of years of service credited and the best five years used
in the pension income calculations. The benefit of two months pay must be
weighed against the reduced pension income -- the advantages vary
depending on your situation.
CARRA and RREGOP
The Commission administrative des régimes
de retraite et d’assurances
(CARRA) is mandated to administer the pension and insurance plans
entrusted to it by statute or by the Québec government. In particular, CARRA administers the Government and Public Employees Retirement Plan (RREGOP).
CARRA is responsible to the Chair of the Treasure Board and the Minister
responsible for Government Administration. Its mission is to ensure that all the members and beneficiaries of the plans it administers receive the benefits
to which they are entitled.
CARRA Website: http://www.carra.gouv.qc.ca/ang/index.htm
A few years ago, JACFA purchased a software program
allows us to run various scenarios of pension income for future retirees.
If you wish to receive a similar statement for yourself in anticipation
of making a pension decision in the near future, please bring a
photocopy of your latest CARRA statement, three projected retirement
dates and, if possible, your latest QPP statement. It will normally take us
a maximum of 30 days to provide you with a pension income projection.
A previous edition of the JACFA News was devoted
to issues connected to
November 2006: vol. 6 no. 2 — Special Retirement Issue.
Fondaction is an investment fund mainly intended
to lend financial
aid to Quebec enterprises in order to maintain or create jobs, stimulate
the economy, contribute to the training of Quebec men and women workers
and promote their participation in the development of such enterprises.
Fondaction was created by CSN in 1996. It invests 60% of its assets in
Quebec. Up to now these investments have contributed in creating
as much as 8300 new jobs in the province. Fondaction is interested
and active with emerging companies (as well as established ones)
preoccupied by environmental issues and aiming sustainable development.
It is possible to contribute to Fondaction’s
RRSP through payroll deductions
(PD) here at John Abbott. PD gives you an immediate tax reduction
of approximately 80%. For example, should you wish to contribute
$2500 in your RRSP per year, your net pay will be reduced by only $20.80.
This calculation is based on a 50,000$ salary and 26 periods of pay.
Why a 80% tax reduction?
For regular RRSPs, you get a 40% tax reduction. Fondaction
(like the Fond de Solidarité FTQ) is a labour-sponsored fund and
it offers an extra 40% in tax credits (25% Quebec, 15% Canada).
Some people say these RRSPs are locked in…
Fondaction RRSP redemption is more difficult than
with a regular one.
However, this is less true than before as many different criteria allows
you to cash in: return to full-time studies for you or your spouse,
injecting capital in a newly started enterprise, emigration, pressing
need for cash, critical financial situation, home buyer’s plan and of course
retirement or phase retirement.
Who should buy Fondaction RRSPs?
If you do not like investing in companies involved
going against your values, if you like to know where your money goes,
if you are close to retirement, if you are starting your career and plan
to buy a house or if you have trouble saving anyways, then Fondaction
might be something to look at.
Contact JACFA at local 5506 for more information.
Fondaction Website: http://www.fondaction.com/
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Last update: January 22, 2013 [ap]