November 30, 2020
The transfer of $21 million in pension assets to the CAAT Pension Plan from The Retirement Plan for Employees of United Way of Greater Toronto (Registration Number: 0316240) was completed on November 4, 2020.
With the transfer of assets, the CAAT Pension Plan assumes responsibility for all defined benefit pension payments to members of The Retirement Plan for Employees of United Way of Greater Toronto.
Following a thorough review, the Financial Services Regulatory Authority of Ontario (FSRA), provided consent to the transfer on October 8, 2020.
On November 12, 2019, an overwhelming 99% of the United Way of Greater Toronto plan members voted in favour of merging with the CAAT Pension Plan. Members of the United Way of Greater Toronto’s employee pension plan – its defined benefit (DB) and defined contribution (DC) components – started contributing to, and earning, a pension under CAAT’s DBplus plan design effective January 1, 2020.
On September 18, 2020, the Ontario pension regulator, the Financial Services Regulatory Authority of Ontario (FSRA), advised that it would change how it would communicate its consent to the asset transfer (commonly referred to as “mergers”) with respect to The Retirement Plan for Employees of United Way of Greater Toronto.
In the past, FSRA has issued a Notice of Intended Decision (NOID) prior to providing its consent for a single employer pension plan to be merged with CAAT or another jointly sponsored pension plan. Given the extensive notice provided to date regarding the proposed asset transfers with respect to the pension plan listed above, and the delays related to the COVID pandemic, FSRA advised that it would not issue a NOID prior to issuing its consent regarding the merger of this plan.
Because this change was made while the applications were being considered for the plan of United Way of Greater Toronto, those affected by the proposed merger had 10 business days (or until October 1, 2020), to make written submissions with respect to FSRA’s proposed consent to the asset transfers.
Employees hired on or after January 1, 2020 will contribute to DBplus at 6.0%, matched dollar for dollar by United Way of Greater Toronto (UWGT).
Employees hired prior to January 1, 2020 will start contributing in each year as follows:
UWGT member services at the CAAT Pension Plan c/o Mercer Toll Free: 1.888.441.4066 Email: UWGT@mercer.com
If you have prior pension benefits from United Way Greater Toronto, your total annual pension will be the sum of two parts:
UWGT pension + DBplus pension = Total annual pension payable from the CAAT Pension Plan
Inflation protection increases are made when the CAAT Pension Plan is over 100% funded to pensions in pay. This is called conditional inflation protection. Such annual increases are 75% of the annual percentage increase in the Consumer Price Index (CPI) and capped at 8% with a carry forward provision (i.e., in years when inflation is high, any amount above 8% would be carried forward and applied to inflation protection in the following years). Increases are effective on January 1st of each year beginning in 2021, for the pension benefits you earn under DBplus, once you start your pension.
Any benefit earned under the UWGT plan will the greater of: CAAT’s conditional inflation protection which is subject to the CAAT Funding Policy and is equal to 75% of the Consumer Price Index (CPI) and the UWGT Plan indexation provision of 75% of CPI minus 1%, with a maximum CPI of 8%. This will be assessed annually from January 1, 2021 onwards, so that you will get the better of the two indexation formulas on a cumulative basis once you start your pension.
Starting January 2021 AIW enhancements are applied at the start of each year you contribute to the Plan and are subject to the CAAT Pension Plan Funding Policy. At the same time guaranteed AIW enhancements will also be applied to the United Way portion of your pension.