How the Plan Works
Eligible Employees
The pension plan applies without discrimination to all individuals who hold regular employment status, whether they work full time or part time. Employees must enroll three months after hiring. Specific rules apply to non-regular employees.
Cost of the Plan
Each organization determines its contribution rate as a percentage. For the employer, the cost of the plan corresponds to the gross salaries multiplied by the chosen percentage. There are no administration or management fees, nor any additional payroll tax, since the employer’s contribution to the pension plan is not a taxable benefit.
For the employee, the contribution takes the form of a payroll deduction, which qualifies for a tax deduction.
Rules for Determining Contribution Rates
- The minimum total contribution (employer + employee) is 2%
- The contribution rate must be the same for everyone — both the employer rate and the employee rate
- The employee contribution cannot exceed the employer contribution
Accumulation
of the Pension
The employer deposits both their contribution and that of the employees into the pension plan each month. The amounts deposited generate a guaranteed, indexable pension credit. This accumulated pension will never decrease. Thus, as soon as the money is deposited, the person earns pension credits toward their future retirement.
The accumulation factor is 11%. In other words, every $100 in contributions buys $11 in annual pension.
