Making Voluntary Contributions
In addition to your Required Contributions to your pension plan, Western allows members to make additional monthly contributions that can enhance your retirement income. It’s important to understand how these Voluntary Contributions work, and how they can help you meet your retirement goals.
- “Voluntary Contributions” are similar to RRSP contributions, but they come off your paycheck and are added directly to your pension balance.
- Because Voluntary Contributions are taken from “pre-tax” dollars, income tax deducted from your pay will be lower to reflect the amount you are committing to your pension. In essence, you will receive an immediate tax benefit on every pay, unlike an RRSP contribution where the refund comes the following year.
- Voluntary Contributions may be started or stopped by filling out a Voluntary Contribution Change Form and submitting it the Human Resources Department. As with Required Contributions, you’ll need to make a decision on how you wish to invest your Voluntary Contributions.
- Voluntary contributions can be started and stopped at any time, and are cashable. Western does charge an administration fee of $100 for withdrawing funds in cash prior to retirement. As well, funds withdrawn in cash become taxable immediately so some tax would be withheld.
- As they work much like an RRSP, Canada Revenue Agency sets a maximum amount you can contribute to your pension account. Total contributions for 2014 including those made by Western, your Required Contributions and your Voluntary Contributions must not be more than 18 percent of pay or $24,930, whichever is lower. Each year the dollar amount is updated to reflect increases in wages. (See CRA table for current amounts)
- Voluntary Contributions are not considered when calculating any benefit under Western’s Supplemental Pension Arrangement. If you participate in this plan, you should seek qualified advice when considering Voluntary Contributions.
- To transfer your funds from your Voluntary account on a tax-sheltered basis to a personal LIRA or RRSP, use the Voluntary Funds Transfer Form.
- To withdraw your non locked-in voluntary contributions, use the Voluntary Funds Withdrawal Form.
Our Pension Plan accepts direct transfers from RRSP accounts, as well as certain types of transfers from other pension plans. If you have money at a former employer, or RRSPs outside Western that you would like to transfer into your account please contact us.
For more information or assistance making Voluntary Contributions, please contact the Human Resources Department at firstname.lastname@example.org or phone 519-661-2194. On campus call extension 82194.