Individual Options
Individual Options
The régime de retraite offers individual options. These options aim to allow participants to leverage the group plan to increase their future retirement income.
Option 1: Voluntary Contributions
This option is for participants who wish to contribute beyond the regular contribution determined by their organization. Amounts accumulated through voluntary contributions are accounted for differently from regular contributions. You will receive the plan’s annual return, minus its management fees.
Why Make Voluntary Contributions?
Essentially, choosing to make voluntary contributions is an investment decision. The plan offers a very attractive investment opportunity that will help you achieve your retirement savings goals. Thus, these contributions can have several uses:
1.
Upon your retirement, they could be converted to increase your guaranteed life annuity, within permitted fiscal limits.
2.
Upon your retirement, you could withdraw all or part of the voluntary contributions (minus income tax) or transfer them to an RRSP to control the pace of disbursement of your savings yourself.
3.
They could finance a past service buy-back from your current employer or a former employer who is a plan member for the years you worked without contributing to the plan.
Just like your regular salary contribution, your voluntary contributions provides you with a tax deduction.
By making voluntary contributions, the contributor benefits from professional management, the plan’s investment opportunities and management fees that are lower than typical RRSPs. You may also be aware of the importance of ESG factors (environmental, social, and governance) that the plan considers when selecting its various funds. Similar to a mutual fund, financial market volatility can cause fluctuations in the value of voluntary contributions with possible decreases some years.
Performance History for Voluntary Contributions since 2008
Year | Annual Return | Year | Annual Return |
|---|---|---|---|
2008 | 5.59 % | 2017 | 7.08 % |
2009 | 17.76 % | 2018 | -1.10 % |
2010 | 6.38 % | 2019 | 14.62 % |
2011 | -3.82 % | 2020 | 6.79 % |
2012 | 3.41 % | 2021 | 13.16 % |
2013 | 10.81 % | 2022 | -5.78 % |
2014 | 7.70 % | 2023 | 7.98 % |
2015 | 1.88 % | 2024 | 12.20 % |
2016 | 7.21 % | 2025 | 10.54 % |
How to Make Voluntary Contributions?
Method | How to Proceed | Taxation |
|---|---|---|
Payroll Deduction | Your voluntary contributions are deducted from your pay. You can choose an additional percentage to your regular contribution or determine a fixed amount to deposit into the plan. 1. Complete the calculation form. You can request it from the secretariat or download it from our website. 2. Submit a copy to the plan secretariat and to the person responsible for payroll and monthly remittances in your organization. You can start, change, and stop voluntary contributions at any time. | Your tax savings will be reflected on your pay. The amount of your contribution will be included in the Pension Adjustment (PA) indicated on your employer-issued T4 slip. You must ensure that you stay within the maximum annual tax-deductible amount permitted based on your regular contribution and your salary. Our form will help you with this calculation. Do not hesitate to ask the secretariat for assistance. |
Transfer | To transfer an RRSP, LIRA, or VRSP to the plan, please contact us to obtain the dedicated transfer form. Please note that it is always possible to transfer RRSPs, VRSPs, and RRIFs as voluntary contributions up to two years after the termination of employment with the last member employer. Attention! Labour-sponsored funds (Fondaction CSN, Fonds de solidarité FTQ) have specific rules: you must wait until retirement or be 65 years or older to transfer assets that are more than 730 days old. | No tax impact. You received your tax savings at the time of the initial deposit. |
Administrative Rules Upon Withdrawal
Withdrawals of voluntary contributions can be made at any time by contacting us. The number of withdrawals is not limited, but starting with the third withdrawal request, the plan will charge an administrative fee for the transaction.
Option 2: Past Service Buy-Back
It is possible for a plan participant to immediately increase their guaranteed retirement annuity by paying an amount to purchase an additional annuity for periods employed at a plan member employer but for which no contributions were made.
Eligibility
Any active plan participant or anyone who has ceased to be active with a member employer within the last two years and has not yet started receiving a retirement annuity from the plan is eligible. This person can submit their buy-back request at any time up to 3 months before their retirement.
Periods Eligible for Buy-Back
Depending on your situation, several periods could be bought back:
• The years worked at your current employer prior to your enrollment in the plan
• The years worked at another employer who is currently a plan member, but prior to your enrollment in the plan
• Periods worked at your current employer or another employer after your enrollment in the plan, but for which no contributions were made during periods of absence (e.g., maternity leave, illness, etc.), subject, where applicable, to the maximum periods provided in Article 9 or Appendjx 4 of the plan text
Cost of Buy-Back and Annuity Obtained
The calculation of an annuity buy-back takes into account several factors: age at the calculation date, gender, salary for the current year, the total group contribution rate and the number of months and/or years eligible for buy-back. Like any annuity obtained through the plan, the bought-back annuity is guaranteed and cannot be reduced, regardless of the plan’s financial health. Furthermore, it will be indexed when the plan indexes the annuities.
A $75 fee is required in addition to the buy-back cost for the actuary’s administrative work. Note that it is only possible to buy back a portion of the amount. The bought-back annuity will thus be proportional to the amount paid.
Payment Methods
The following payment methods can be used and can be combined:
1.
Payment by cheque: entitles you to an income tax deduction
2.
Payment by employer: this buy-back does not entitle you to a tax deduction, but is also not added to your taxable income
3.
Transfer directly from a retirement vehicle (RRSP), which has no tax impact for you
4.
Transfer from the Fonds de solidarité FTQ or Fondaction CSN RRSP in the 3 months prior to your retirement or from age 65. This transfer has no tax impact for you
5.
Transfer of voluntary contributions made to the plan. This transfer has no tax impact for you.
Buy-Back Procedure
1.
You must first submit a request to the plan secretariat for the calculation to be made.
2.
You must then have your current employer complete a confirmation form. If you wish to buy back years worked with one or more former employers, you will also need to ask them to complete a confirmation form for former employers.
3.
If you wish to pay in whole or in part with a transfer from an RRSP, you must complete a transfer form. The secretariat will assist you with this step.
4.
Finally, you must submit the following documents to the plan secretariat:
• The signed calculation form,
• A copy of an official document bearing your date of birth (e.g., birth certificate, driver’s license, passport, health insurance card, etc.)
• The confirmation from from your previous employer (if applicable)
• The payment cheque (if applicable) and/or the signed transfer form(s)
Once the actuaries have validated the calculation, a certification request will be made to the Canada Revenue Agency (CRA). You will then receive written confirmation of your buy-back, as well as a copy of the CRA’s certification.
