This web site deals with the implications of taking the Commuted Value out of a pension plan. Clearly the bigger decision you are making is the decision to retire in the first place. One thing you should understand is that you are only one corporate bankruptcy away from your pension changing, whether you like it or not. This sounds like fear-mongering, until you examine what has happened to a number of plans in the last few years. Most Defined Benefit members figure their pension is immune to these occurrences, even if their employer is having difficult financial times. If your plan is government funded it probably is safe. If not, you are not. Look at Air Canada, or Stelco. If you haven't, we can help. 

Your ability to retire early depends in large part on the financial resources available to you and your family to cover future needs. Your pension is a significant part of those resources but you will have the CPP, OAS as well as income from other investments if any. You may also be planning to work after retirement. You should take a close look at all your sources of income and how they compare with total projected living costs, including taxes. Do this essential exercise before you make the decision to retire, not after. Buy a book on the subject and, if you feel it necessary, get some financial planning help. If you do the latter, though, do your best to assess that you are getting advice that you feel places your needs first. This is especially so if your planner makes a commission on the management of your funds. What you have just been told is about as honest as it gets. 

The links page has helpful sites for retirement planning and tools that we have reviewed. Some effort at doing your own site searches is time well spent.

The Commuted Value pension deserves a great deal of thought for a number of reasons that do not apply to simple retirement and a service pension. You must understand, if you have a Defined Benefit plan, your Commute decision is probably the most important financial decision you will make in your lifetime. Knowing the risks and rewards, how they mesh with your anticipated future lifestyle and, upon acquiring this information, how your anticipation's may change, is important information. For those seriously considering their CV option we provide detailed analysis aimed at your specific situation so that you can see how your funds will provide for you and your beneficiaries. For further information and fees please E-mail to info@ontarioteachers.com or call Bill Gates at Armquest 905-855-8899. 

Q2: Can my spouse draw a pension, should I die prematurely?
A2: You can make provisions for your spouse to continue drawing the same amount as you.

Q3: How safe is the money?
A3: There are two key concerns: that the capital is safe, and that there will be enough to last your lifetime. Armquest is experienced in managing pension moneys and works closely with some of the best fund managers in the business. They select a fully diversified portfolio of securities to create returns that will provide cash flow while, at the same time, providing a high level of capital preservation.

Q4: Will I sleep nights or do I need to worry about my future income?
A4: Different people have different priorities and risk tolerance. Before we make a recommendation, we meet with you to hear about your chief concerns, both in terms of risk tolerance and lifestyle. Together, we choose the level of risk that will be comfortable to you, while still meeting your obligations and lifestyle. In a word, you sleep nights!

Q5: What will this cost me?
A5:  We keep our fees competitive, which is to say, lower than many mutual funds. The idea is to preserve your capital for you and your family. 

Q6: I like to know what is happening to my money. Will you keep me informed?
A6: One of Armquest's services is to do periodic reviews, using our specially designed Withdrawal and Scenario calculators, to make sure your CV pension is on long term track, and to advise how to correct it if it has encountered a 'bump'. You also receive regular reports from the managers we select.

Q7: Sorry to ask, but how safe is my money?
A7: All moneys are held in trust by a custodian, usually a bank. The custodian can vary, depending on the fund manager(s) selected. A custodian handles all the money and securities transactions. In other words, your money goes directly into the hands of the custodians, held in trust for you, and is invested on your behalf by the manager(s). The custodian also handles all the payments going to you and pay our fees on your behalf. The custodians produce their own independent reports, not only to you, but also to the Government agencies that control these matters.

Q8: At income tax time, do I have complicated forms to fill?
A8: The custodian will provide you with the necessary T2 slips, much as your pension plan would.

Q9: How do I arrange to meet with you?
A9: Call us at (905) 855-8899 for an appointment. If you prefer, just click the button CONTACT US to arrange a convenient meeting time. If you live out of Toronto, click the What’s New button to check our seminar schedule, or call us to see what can be arranged.

Q10: Is it very complicated to commute?
A10: No. We give you complete assistance with all the paperwork and communications with your Human Resources department, at no additional cost.

Q11: Will I lose money if I commute?
A11: Armquest's personnel regularly review your portfolio returns and perform their own calculation of what you should be receiving to ensure that you stay on track with the long-term plan.  We will show you under what conditions you can run out of money and steps you should take to guard against this. 

Q12: What are the advantages of commuting?
A12: The first advantage is that you keep a measure of control over your money. For instance, unlike a pension, if you don't like the way your fund is performing, you can transfer it elsewhere. Another advantage is that the plan is tailor-made to your particular preferences; this means that you can change your mind down the line, if your life style changes or if your risk tolerance changes. (We can make specific comparisons when you come to see us and give us more particulars on what you want out of your pension.) There is also the advantage that your spouse can continue to draw the same amount in the event of premature death. Finally, capital preservation so that you can leave an inheritance is also a great advantage to most retirees.
 
 

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