GROWTHplus modeller help

Inputs

The GROWTHplus Investment Account Modeller makes projections based on the data and assumptions you input and those described below. If you are a CAAT member with an existing GROWTHplus balance, use the modeller on the My Pension portal to incorporate information about your most recent year-end balance and recent transactions. Your inputs and the results are not reviewed or verified by CAAT Pension Plan.

Use the slider to choose your current age and the age you'd like to start withdrawing: The slider allows you to select your current age, as well as the age you would like to begin to model a regular withdrawal from the GROWTHplus Investment Account. The modeller allows you to choose a current age up to age 70 and allows you to start withdrawing at age 50. The deposit and withdrawal ages you can select in the modeller are simplified compared to the GROWTHplus options in practice.

How much would you deposit as a one-time lump sum: Enter a new amount to deposit into GROWTHplus in a single lump sum, if desired. Eligible members can initiate a transfer from an existing eligible registered retirement savings vehicle into GROWTHplus. Transfers-in can be initiated up until the end of the year a member turns 70 as long as they are a resident of Canada for income tax purposes.

How much would you deposit per year: Enter an annual deposit amount to GROWTHplus, if desired.

At what rate would you increase your yearly deposits: If you would like the annual deposit to increase each year, choose an amount greater than 0%. For example, if the annual deposit input is $1,000, and you select an increase rate of 2%, the annual deposit will increase to $1,020.00 the next year, $1,040.40 in the following year, and this will continue to increase at a rate of 2%.

Select an assumed annual rate of return: The rate of return you select will represent the assumed rate of return credited to a GROWTHplus balance over time. This simplified modeller assumes a positive static rate of return year-over-year and does not account for expected volatility. Any actual GROWTHplus balances will receive the CAAT net rate of return, or a rate of return that can be reasonably attributed to the operation of the pension fund for the applicable period, less GROWTHplus administration fees. The actual GROWTHplus rate of return will likely differ from the options provided and the option selected.

How much would you withdraw every year: Enter an amount to model as an annual withdrawal from GROWTHplus starting at the age you selected to start withdrawing. The inputted withdrawal amount may differ from permissible or required withdrawals under GROWTHplus.

Use the slider to show how many years you want your savings to last: Choose the number of years that you would like the balance to last, and the modeller will project an annual withdrawal amount to get you to this goal. The annual withdrawal amount generated will not consider any maximum or minimum applicable legislated requirements starting at age 72 or withholding taxes. It also does not consider that funds that are locked-in under the legislation for Alberta, British Columbia, Manitoba, Saskatchewan or Quebec must be transferred out of GROWTHplus by the end of the year a member turns 71. The GROWTHplus balance will vary based on deposits, withdrawals and investment returns and there is no guarantee it will last for the projected period.

At what rate would your withdrawals increase each year: If you want to increase yearly withdrawals during the spending phase to help maintain purchasing power, you can use this input to select an annual increase to the withdrawal amount. The modeller increases the withdrawal amount each year by the amount you select, beginning the year after you plan to start withdrawals. In practice, GROWTHplus withdrawal amounts will not automatically adjust each year and the inputted withdrawal amount may differ from permissible or required withdrawals under GROWTHplus.

Assumptions and limitations

The projections provided to you are strictly for illustrative purposes. They are based in part on future assumptions and simplified inputs and do not provide a guarantee of a GROWTHplus balance in the future, which may change based on actual experience or changes to the data. The modeller also does not incorporate all applicable terms and conditions of GROWTHplus. For more information see the GROWTHplus Investment Account Handbook.

Assumptions

Assumed Rate of Return
The modeller assumes a consistent annual rate of return based on the inputs you provide. The selected rate of return assumes the GROWTHplus administration fee has already been deducted when determining the projected balance.

Deposit and Withdrawal Amounts
The modeller assumes static deposit and withdrawal amounts unless you select a rate at which these amounts will increase. These amounts may be different from actual GROWTHplus deposits or withdrawals. The modeller also assumes that any deposits and withdrawal amounts inputted are permissible under applicable legislation and the Plan.

Longevity
The probability of retirees living beyond certain ages is based on the 2014 Canadian Pensioners’ Mortality Table [CPM2014] with fully generational mortality improvement scale CPM-B, with an initial projection to the calculation year and a unisex mortality assumption of 50%/50%. Mortality improvements between your current age and the future age you chose to start withdrawing have not been included.

Limitations

Savings phase and spending phase
The modeller limits deposits to the savings phase and withdrawals to the spending phase. Eligible members of GROWTHplus may have the option to make deposits and withdrawals from GROWTHplus each year, subject to the terms of GROWTHplus.

Locked-in vs. non-locked-in funds
With GROWTHplus, eligible members have the option to deposit both locked-in and non-locked-in funds. This modeller doesn't distinguish between these types of funds. In practice, withdrawal rules for GROWTHplus will vary based on whether funds are locked-in or non-locked-in. Note that before the end of the year a member turns 71, locked-in funds can only be transferred out to another eligible locked-in registered savings vehicle.

Requirement to transfer-out all locked-in funds in certain jurisdictions
Funds that are locked-in under the legislation for Alberta, British Columbia, Manitoba, Saskatchewan or Quebec must be transferred out of GROWTHplus by the end of the year a member turns 71. This has not been incorporated into the modeller.

Minimum withdrawal requirements
In GROWTHplus, locked-in and non-locked-in amounts are subject to a minimum withdrawal amount based on legislated requirements starting the year a member turns 72. Modeller projections do not incorporate any minimum withdrawal requirements. In reality, the applicable minimum amount will be applied independently to both locked-in and non-locked-in funds. Members may be required to withdraw more in certain years than has been indicated in the projections, and this could mean the balance may not last as long as projected. There may also be additional minimum withdrawal requirements applied by CAAT that have not been reflected in the modeller.

Maximum withdrawal requirements
In GROWTHplus, starting the year a member turns 72, locked-in amounts are subject to a maximum withdrawal amount based on the applicable pension legislation. Modeller projections do not incorporate any maximum withdrawal requirements. In reality, members may not be permitted to withdraw the amounts indicated in the projections, and this could mean the balance may last longer than projected.

Income Tax Withholding
Cash payments from GROWTHplus will trigger income tax withholdings which are not incorporated into the modeller.

Spending phase - maximum age
The modeller limits the spending phase to age 115, and any remaining balance projected to that age is provided as a model result.

Glossary

Deposits are optional transfers of funds into GROWTHplus from an eligible tax-sheltered retirement savings vehicle. A tax-sheltered transfer-in can be initiated by a member, deferred member, or retired member of the Plan up until the end of the year they turn 70 as long as they are a resident of Canada for income tax purposes. There is no limit to the amount of existing tax-sheltered funds you can transfer into GROWTHplus.

Withdrawals refers to either a mandatory or optional taxable cash payment or tax-sheltered transfer-out from a GROWTHplus Investment Account. In GROWTHplus, withdrawal options will vary depending on a member’s jurisdiction of employment and whether funds are locked-in or non-locked-in.

Locked-in funds are tax-sheltered savings earned in a registered pension plan that are intended to be used as income in retirement. They are subject to withdrawal restrictions. The rules surrounding the transfer and withdrawal of locked-in amounts differ across Canadian jurisdictions, and the Plan must comply with the minimum standards in each of these jurisdictions.

Non-locked-in funds are tax-sheltered funds that are not subject to withdrawal restrictions under applicable pension standards legislation. These funds can be transferred into a GROWTHplus Investment Account on a tax-sheltered basis and can be transferred from GROWTHplus on a tax-sheltered basis to an eligible tax-sheltered account, or paid in cash less withholding tax.

Rate of return is the measure of an investment's performance over a period of time and could be positive or negative. Any actual GROWTHplus balances will receive the CAAT net rate of return, or a rate of return that can be reasonably attributed to the operation of the pension fund for the applicable period, less GROWTHplus administration fees. This modeller assumes a static rate of return year-over-year based on the inputs you provide. The GROWTHplus Investment Account is intended as a long-term retirement savings vehicle and returns will vary year-over-year and may be positive or negative.