Some members of Western’s retirement plan are required to pay annual administration fees to cover the administrative costs incurred by the University. Fees are paid by:
In 2012, those annual fees are increasing from $200 to $400 to more closely reflect the actual administrative costs incurred by the university.
The administration fees are deducted directly from retirement plan accounts in two payments ($200 each) – June 30th and December 31st.
I have left Western prior to retirement, but my pension funds remain with Western. Should I leave my funds there or transfer them to another institution?
Some members who leave Western prior to retirement choose to transfer their Western pension funds to another financial institution. That decision is up to the individual and may be based on the desire to consolidate retirement funds in one institution, or based on the fees charged by Western for the service as compared to other institutions. You may wish to seek the advice of a financial planner.
Remember also that as a member of Western’s retirement plans, you are responsible for monitoring your contributions and making decisions on how you wish to invest those funds.
How much does it cost to stay in Western’s pension plan?
The annual fee of $400 is charged to pension plan members who leave Western before their normal retirement date, but leave their funds in the Western pension plan. It is also charged to members who work at affiliated university colleges and other affiliated organizations.
In addition, all members of Western’s pension plans pay investment fees. These fees are charged by the external managers of the funds in which you invest. The total management expense cost is about 46 basis points (0.46%) of assets per year for pension plan members and slightly more for some participants in the Western Retirement Income Fund program. You will find that, in general, these investment fees in the Western plans are generally lower than for outside RRSPs. More information and specific fund fees are available on page 10 of the annual Investment Performance Review.
Can I “cash in” my pension funds?
Pension laws determine whether funds are “locked-in”. In general, regular contributions made by you and/or by Western to your pension fund are locked in until your retirement. If you leave Western, they can be transferred to another locked-in retirement account at a financial institution, or transferred to another employer’s registered pension plan, but they may not accessed for cash.
If you made any voluntary contributions to your plan, these funds can be removed from the plan, less a $100 administrative feed. The amount removed will become taxable to you and some tax will be taken before you receive the money. Some people delay removing these funds until a year that they have little or no earned income to take advantage of a lower marginal income tax rate.
If I leave before retirement, do all the funds contributed by Western belong to me?
All contributions made by you and by the University belong to you.