COLLECTING YOUR PENSION
You can start receiving payments from the plan anytime between the ages of 55 and 71, even if you’re still employed. Canada Revenue Agency (CRA) requires your funds to be converted into retirement income no later than December of the year you turn 71.
Our staff will answer any SPP pension questions and provide the information you need to make the transition to a comfortable retirement an easy one. All you have to do is send us a message or call 1-800-667-7153
WHEN IT COMES TO COLLECTING YOUR PENSION, YOU HAVE MULTIPLE OPTIONS:
- Choose an annuity from SPP and receive pension payments for life
- Convert your account to an SPP variable benefit (VB)
- Transfer your funds to a locked-in account at a financial institution
- Combine annuity and transfer options to best suit your needs
TELL US A LITTLE ABOUT YOURSELF AND YOUR RETIREMENT VISION
IF YOU ANSWERED ‘I’M NOT SURE’ TO QUESTION 2, WHAT NOW?
You likely need more information. That’s why we’re available to talk with you about your options. But we’ve also included answers to some of your likely questions. So keep scrolling…
Please download and review the ‘Time to Collect’ Guide, which provides answers to most of the questions you will have.
WHY IS AN SPP ANNUITY A RELIABLE OPTION?
Annuities offer an income certainty that many people prefer—without the potential risk that comes with other options. You receive your pension as a monthly payment for your lifetime. The annuity is a contract and the amount of that monthly pension amount is determined by a number of factors, but that determined amount will never go down.
Get the largest possible monthly pension guaranteed for your lifetime. Payments stop when you die. There is no death benefit payable to a beneficiary.
Receive the assurance of a death benefit to your beneficiary in the event you do not receive your account balance at retirement in pension payments. You can name anyone as beneficiary but if you name your spouse as beneficiary of your account, CRA allows death benefits to be transferred, tax-deferred, directly to his/her SPP non-retired account or to an RRSP, RRIF or guaranteed Life Annuity. Tax-deferred transfer options are also available if the beneficiary is a financially dependent child or grandchild. You may change your beneficiary any time before your death.
Payable for the duration of your life and your spouse’s. Benefits are based on your age and the age of your spouse. In the month following your death, payments continue to your surviving spouse for the remainder of his or her lifetime. Continuing benefits are selected at the time of retirement as 60%, 75% or 100% of your annuity payments. If your spouse predeceases you, the payments stop with your death.
How is an SPP variable benefit (VB) a flexible option for me?
The VB gives you control over your investment choice and payment amounts. Use SPP’s investments options to keep your account actively invested and draw income at the same time.
For more information about SPP’s VB options, click here.
Between the ages of 55 and 71, members may transfer their account to the SPP VB. The VB gives you control over how much retirement income you wish to withdraw and when you wish to withdraw throughout the year. You have the choice of how the money is invested within the Plan: the balanced fund and/or the diversified income fund. You continue to benefit from the low fees and dedicated service you have experienced with SPP. The VB is available to all members, no matter which province you live in, and is similar to a prescribed RRIF issued by other financial institutions.
HOW CAN I TRANSFER MY SPP FUNDS TO ANOTHER FINANCIAL FIRM?
Between the ages of 55 and 71 you may transfer your pension to another financial institution using any of the described options.* To learn more about the benefits of each, just click each option.
* Subject to a transfer fee.
LIRA is an account to hold pension money and is basically what your active SPP account provides, except you cannot make further contributions. If you do not need income, a LIRA allows you to manage your money personally until you choose a retirement option. Funds remain tax sheltered until transferred to a life annuity or PRRIF. The LIRA is only available until the end of the year in which you turn 71. Funds transferred to a LIRA must be administered as a locked-in amount as required by The Pension Benefits Act, 1992.
A PRRIF is a retirement option that provides annual income. You maintain control of the investments, and investment earnings continue to accumulate on a tax-sheltered basis. CRA determines the minimum amount an individual must take as income each year following set up. There is no maximum. Funds withdrawn are taxable income in the year received.
This type of annuity is purchased from another financial institution. Payments must be guaranteed for life by the issuer and cannot be paid out in a lump sum.
WHAT IS THE COMBINATION OPTION?
You can mix an annuity and transfer to suit your needs. For example, use a portion of your balance to purchase an SPP annuity, and transfer the remaining funds to a LIRA or PRRIF to ensure a guaranteed monthly payment for your lifetime while maintaining the flexibility to manage your investment and income.
CAN I CHOOSE A LUMP SUM PAYMENT?
Yes. If your account balance is very small, you may be able to receive a lump sum payment instead of monthly payments. If you qualify under this option, you can choose to have the funds paid directly to you, less withholding tax, or it can be transferred to an RRSP or RRIF at another financial institution.
** The small pension amount is subject to change on January 1 each year.
WANT MORE INFORMATION? WE HAVE ANSWERS
We can help guide you through all the above considerations and anything else. Just send us a message or call 1-800-667-7153 to get clarification.
Frequently Asked Questions
Will my monthly pension ever change?
No. Every month we set the earnings and annuity rates according to current markets. The month you retire determines your monthly benefit for the rest of your life.
Will my SPP annuity income qualify for the Pension Income Tax Credit?
Yes, your SPP annuity payment qualifies for the Pension Income Tax Credit.
Do I have to wait until I retire to start collecting pension payments?
No. You can start collecting an SPP pension anytime between the ages of 55 and 71 regardless if you’re retired from working. Once you start collecting pension payments you can no longer make contributions to SPP – Learn more about collecting pension payments.
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