‘What’s Important’ video captions
Speaker 1: There are lots of things that are important in life, family, friends, health, career, and financial security. It's also important to understand how the pension decisions you make today can impact your retirement income in the future.
As a member of one of Canada's public sector defined benefit pension plans, you can rest easy knowing the contributions you and your employer make today, along with investment returns, will provide a lifetime pension in retirement, and that offers peace of mind for you and your loved ones. Simply put, your pension offers a predictable steady stream of income that will be there for you throughout your retirement. That's because your defined benefit pension is based on a set formula to determine the amount you will receive in retirement. As a result, your pension is not affected by the day-to-day ups and downs of market or investment performance. And to help protect your pension dollars, annual increases for inflation may also be available.
What's more, you can leave the investment decisions to a team of experienced investment professionals with access to large-scale investment opportunities around the globe that are usually not available to most people. But did you also know if you decide to leave your current job before retirement, you can leave your pension with your plan? So when you're ready to retire, you can count on secure income in retirement, thanks to your pension. And because you will know the amount you'll receive before you retire, you can better plan for your financial future, and that's very important.
Making decisions is a part of life. You may get married, start a family, or go back to school. Your career path may take different turns with new job opportunities during your working years. And along the way, depending on your plan, you may hear you can take the value of your pension out before a certain age or years of service, but it's important to get all the facts before you act. Taking money, known as the commuted value, out of your plan to invest elsewhere is a big decision, and once it's done it, can't be undone.
Did you know you need to leave your current job to take out the value of your pension? There may be tax implications, and a portion of your pension funds cannot be accessed until retirement. Taking out the value of your pension also means ending your membership in the plan and, in most cases, walking away from survivor benefits and any health benefits in retirement that may be offered. Most importantly, by leaving your pension plan, you're missing out on the security of predictable retirement income for life.
So decisions like these matter. That's why your pension plan has a team of knowledgeable experts to answer any questions you may have about your pension, and they will be with you from the minute you join the plan throughout your retirement. Understanding the financial impacts of the decisions you make about your pension is important because safeguarding your financial future in retirement, and that of your loved ones, is important too.