General Information
What This Plan Offers Me
The Régime de retraite des groupes communautaires et de femmes offers retirement income security through the payment of a life annuity that can be indexed. Unlike RRSPs and VRSPs, which focus on individual management, our wage-financed retirement plan is a collective plan that shares longevity risk and investment return risk among all participants. This risk pooling guarantees the payment of the retirement annuity until death.
The Plan’s Tax Benefits
Employee contributions are tax-deductible. Since they are deducted directly from pay, the tax reduction is immediate. For its part, employer contributions are not considered a taxable benefit. You do not have to pay social benefits (employment insurance, QPP, QPIP, etc.) on this amount, as is the case for an employer contribution to an RRSP. When you withdraw an annuity from the plan, this income will be taxable.
Start of Contributions
If you are a regular employee, you begin contributing three months after being hired. The employer may have chosen to start contributing sooner (you can verify this by consulting Appendix 4 of the Plan Text). If you were already a contributor to the plan, you contribute from the moment of your hiring, regardless of your employment status. For non-regular employees, other rules apply. For more details, please consult the Plan Membership section.
Annuity Accumulation
The employer pays contributions to the retirement plan monthly. As soon as the money is deposited, the individual receives a guaranteed annual annuity credit for their future retirement. This is indexed periodically when the plan’s financial situation allows.
This accumulated annuity will never decrease. In concrete terms, the annuity accumulation rate is 11%, meaning that each $100 contribution paid into the plan immediately buys an annual annuity of $11, before indexation. The number of $100 payments will determine the retirement annuity. Thus, three factors contribute to annuity accumulation: the number of years of contribution, the contribution rate, and the individual’s salary. To help you calculate your retirement annuity amount, use the calculator found on the homepage.
According to this annuity formula, penalty-free retirement is payable from age 65. However, it is possible to retire before age 65 with a penalty (-6%/year) or after age 65 with an annuity increase (+6%/year).
Knowing the amount of annuity accumulated in the plan
Each year, in July, you will receive your annual participation statement. This statement can be found on your personal page in the “My Statements” section of the plan’s administrative site. It tells you the amount of annuity you have accumulated as of December 31 of the previous year, as well as a projection of your retirement annuity. You can consult your “Participation History” to add payments made to the acquired annuity since the last annual statement.
