There are lots of reasons why the myths around defined benefit pensions persist. After all, the landscape of DB pensions in Canada has evolved quite a bit over the past few decades. Pensions are complicated, and it can be hard sometimes to separate fact from fiction.
Read below to learn what is fact and what is fiction as members of the CAAT Pension Plan.
1. A defined benefit pension will give me a secure and reliable income for life → True
As a member of CAAT Pension Plan, you’ll receive retirement income that is paid every month for the rest of your life, meaning you can’t outlive your pension. Having a secure and reliable income allows you to better plan for your future – the upcoming days, months, and years ahead. Once you retire, your pension arrives in your account every month, no action required by you.
2. If I leave my employer, I’ll lose my pension → False
As a CAAT Pension Plan member, your pension remains safe if you change employers.
If you leave your employment with a participating employer, you will have options for the pension that you earned during your membership.
If you are retirement eligible, you can choose to start your pension immediately. If you are not retirement eligible, you’ll have a number of different options to consider that you can read more about here.
3. Participation in the CAAT Pension Plan is only available through specific industries or employer types → False
CAAT believes that every Canadian deserves retirement income security. To help meet that objective, CAAT created DBplus. DBplus is available to employers across Canada, in a variety of sectors, who want to join a pension or upgrade from an RRSP, defined contribution retirement plan, or even another defined benefit pension.
Employers who choose to join DBplus enjoy the benefit of the low administrative costs and employees can enjoy the security of retirement income that is paid monthly for life.
4. A Modern defined benefit pension plan, like DBplus, can provide better returns on pension contributions when compared to other retirement plans like an RRSP or a defined contribution plan → True.
On average, contributions to DBplus go twice as far in retirement compared to group RRSP or Defined Contribution (DC) plans. Plus, you’re freed from the stress and risks of making investment decisions. Additionally, DBplus also provides the features Canadians want most – such as conditional inflation protection, survivor benefits, and early retirement options.