YOUR PENSION PLAN IS PROTECTED

What happens to your NHRIPP Pension Plan when you change unions?

 

According to the NHRIPP Handbook at www.nhripp.ca, members will have two options of what to do with their accumulated pension.

 

If you are 55 or older and have a break in service, your benefits must remain in the Plan until you are ready to collect a pension.

 

If you are under age 55 and have a break in service, you have two options:

  • Option 1: keep your benefits in the Plan until you are ready to collect your pension; or
  • Option 2: transfer the current value of your pension benefits out of the Plan. If you leave and transfer your benefits out of the Plan, no pension will be paid at retirement unless you rejoin the Plan and earn additional benefits.

 

IMPORTANT: NHRIPP has a penalty for Ontario members who elect to transfer out their pension earnings:

 

“Effective June 1, 2016, If an Ontario Participant incurs a Break in Service before their 55th birthday, they can then transfer their benefits out of the Plan.

 

The lump sum value of a Terminated Participant’s benefit is equal to the present-day value of their pension benefits multiplied by the solvency funding ratio of the Plan. The solvency funding ratio of the Plan is calculated quarterly and is now about 63.8%.” (source: www.nhripp.ca)

 

Recommendation

The fact that you are forced to participate in an inferior pension plan should not hold you hostage from seeking better union representation.

 

If you vote for change to CLAC, our recommendation would be to leave your existing pension contributions with NHRIPP until retirement in order to avoid the penalty imposed to Ontario Plan members.

 

Additional Considerations

The money you have invested in the NHRIPP Pension is safe if you elect to leave it in the plan until you retire.

 

Moving forward, there are compelling reasons why you want to stop contributing money to the NHRIPP Pension Plan by voting for CLAC:

 

  • NHRIPP Solvency

The solvency test assumes the Plan was terminated on the valuation date and had to pay out all pension benefits immediately. If your NHRIPP Plan had ended on January 1, 2018, it would have had enough money to pay out 63.8% of all benefits.

 

  • Inflation

Your current NHRIPP service pension is based on a formula applied to the total contributions received by the fund office on your behalf. The current formula is $1.55 of monthly pension for every $100 contributed by you and your employers. This formula has not been changed since 2013 which means that your pension earnings at retirement are not keeping up with inflation.

 

  • Guaranteed Income

Under the terms of the Plan, the Board of Trustees has the power to change the Plan at any time in accordance with Ontario’s Pension Benefits Act and the federal Income Tax Act. This includes reducing benefit levels for current and/or retired members, if the Plan does not have enough funds to pay for all the targeted benefits.

 

The CLAC Pension Plan is a defined contribution plan (DCPP). Your funds are yours—they aren’t used to pay other people’s pensions. The amount of money you have in your group plan account at retirement is based on the amount of contributions made over the years and the earnings these investments have made.

 

The CLAC Pension Plan has very low administration fees and has historically achieved very high returns.