DESJARDINS GROUP PENSION PLAN (DGPP) GRADUAL RETIREMENT

Transcription

1 DESJARDINS GROUP PENSION PLAN (DGPP) GRADUAL RETIREMENT Gradual retirement enables employees aged 55 or over, pursuant to an agreement with their employer, to reduce their working hours (See: Section 8-13 of the DGPP Regulation). In order to compensate for the loss of income, members can request an annual lump sum payment from the DGPP not exceeding the limit set by law. This amount must be taken into consideration at the actual time of retirement (the lump sum payment is applicable only to Quebec members). During the gradual retirement period, the employee s plan contributions are calculated based on the new work schedule or, if the employee does not want to withdraw funds from the DGPP (to compensate for a lower salary), contributions can be made based on real hours worked, under the same terms and conditions as part-time employees. Under the Group Insurance Plan, the salary to be used for calculating insurance and premiums for the Life portion is the salary that the employee would have received if their number of working hours had not been reduced. For the Disability portion, the salary used to calculate the insurance and premiums is the salary that the employee actually earns based on the number of working hours and premiums will be adjusted to that salary. In addition, at the age of 60, an employee may receive their annuity for early retirement from the QPP but they must make a request directly to the QPP. In short, the eligibility conditions are: Be over 55 and under 71* Sign a gradual retirement agreement with the employer Reduce the number of working hours Have a planned date of retirement Lump sum withdrawals are made on a voluntary basis and are limited to one per year The following two documents must be completed: Request for a lump sum payment pursuant to a gradual retirement agreement, if any * Employees 65 years or over may receive their pension benefit from the DGPP while continuing to work. For additional information, please contact the DGPP Member Services Team at

2 GRADUAL RETIREMENT AGREEMENT BETWEEN: Name of employer Address of employer HEREINAFTER the EMPLOYER AND: Name of employee Address of employee HEREINAFTER the EMPLOYEE WHEREAS the Employee is 55 or over. WHEREAS the Employee s pay cycle is. weekly or bi-weekly WHEREAS, for each pay cycle (according to Section 6-1 of the DGPP Regulation), the Employee works hours and receives as regular compensation. gross amount per pay WHEREAS the parties hereto wish to modify their obligations relative to the Employee s work and establish an agreement setting the terms during the period of gradual retirement. Page 1 of 4

3 IT IS AGREED AS FOLLOWS: 1. DURATION OF THE AGREEMENT The Employee and the Employer enter into a gradual retirement agreement for the period from to. start date end date The Employee s job ends when this agreement expires. 2. REDUCED WORK SCHEDULE The number of hours worked shall be reduced by hours per pay cycle, for the period mentioned in point 1. The new work schedule shall therefore be hours per pay period. 3. REMUNERATION After reducing the number of hours worked, the Employee s benchmark salary is $ starting on the date specified in point 1. The Employer may modify this salary in the future based on applicable working conditions. 4. GROUP INSURANCE PLAN The payment of life insurance premiums (basic life insurance, compensatory life insurance and additional life insurance) shall be based on the salary that the Employee was receiving before the agreement. Disability premiums shall be calculated based on the salary earned for the hours worked (same terms and conditions as part-time employees). For other types of coverage, the rates are fixed. Group insurance premiums shall be shared between the Employee and the Employer, under the usual terms and conditions. During the term of the agreement, the Employee and the Employer shall be subject to any changes made to the Group Insurance Plan, including changes to rates, coverage and the shared portion of group insurance premiums. 5. DESJARDINS GROUP PENSION PLAN DGPP contributions are calculated based on the Employee s salary for their hours worked. The DGPP considers that the Employee becomes a part-time employee. Contributions shall be shared between the Employee and the Employer based on the share percentages in effect. During the term of the agreement, the Employee and the Employer shall be subject to any changes made to the Group Insurance Plan, including the contribution rate and changes to the DGPP Regulation. Page 2 of 4

4 6. LUMP SUM PAYMENT The Employee may request payment of an annual lump sum from the DGPP. The amount requested shall not exceed the following amounts, whichever is the least: 70% of the decrease in remuneration from the reduced number of working hours during the withdrawal year 40% of the maximum pensionable earnings for the withdrawal year adjusted in proportion to the number of months covered under the agreement Value of the pension accrued in the DGPP This agreement only allows for and covers one withdrawal per calendar year. The Employee shall make a request for each withdrawal. Withdrawals are optional. 7. TERMINATION OF AGREEMENT The agreement shall be terminated at the first pay cycle following the pay cycle during which one of the following events occurs: The number of hours specified in point 1 is modified. The employee becomes disabled. The employee no longer resides in Quebec under the terms of the Taxation Act. The employee s job is terminated. 8. INFORMATION The Employee declares having had the time to read this document and obtain all necessary information. The Employee further declares that they freely and voluntarily consent to this agreement. 9. TRANSACTION The Parties agree that this agreement shall constitute a transaction under the Civil Code, which is made without any admission of liability by the Parties and which cannot under any circumstances be used as a precedent. 10. CONFIDENTIALITY The Employee agrees not to use or disclose, directly or indirectly, any confidential information entrusted or revealed to them by the Employer insofar as the use or disclosure of such information could be prejudicial to the Employer or to any other organization it is affiliated with. The Employee further agrees to return to the Employer any documents or materials that belong to the Employer or that might contain confidential information concerning the Employer. Page 3 of 4

5 The undersigned agree to the conditions herein. Employee s signature Date Employer s signature Date A copy must be sent to EACH of the following addresses: Desjardins Financial Security Defined Benefit Plan Administration LEV e T 200 rue des Commandeurs Lévis, QC G6V 6R2 AND Desjardins Insurance Contract Administration, Group and Business Insurance 200 rue des Commandeurs Lévis, QC G6V 6R2 ADDITIONAL INFORMATION DGPP Member Services Team Monday to Friday, 8:00 a.m. to 5:00 p.m or Website: desjardinsgroupplans@desjardins.com Page 4 of 4

6 REQUEST FOR LUMP SUM PAYMENT UNDER THE GRADUAL RETIREMENT AGREEMENT (applicable only to Quebec members) As stipulated in the gradual retirement agreement signed with my Employer, I hereby request the following lump sum payment which shall not exceed the following amounts, whichever is the least: 70% of the decrease in remuneration from the reduced number of working hours during the withdrawal year 40% of the maximum pensionable earnings for the withdrawal year adjusted in proportion to the number of months covered under the agreement Value of the pension accrued in the DGPP PAYMENT AMOUNT Maximum amount allowed The amount of: $ PAYMENT AMOUNT Upon receipt of this request, following salary review. PAYMENT METHODS Cheque with tax deductions RRSP transfer (non-taxable) Enclose form T2151 or equivalent transfer form Name of financial institution: _ I understand that this request must be made annually for each year of the agreement in which I want a lump sum payment, as the case may be. I also understand that the payment that I receive from my retirement plan will consequently reduce my pension when I fully retire. Date Member s name: Member s address: ID: Member s signature IN PRINT 9 characters (See your DGPP annual statement) PLEASE SEND THIS FORM TO: Desjardins Financial Security Defined Benefit Plan Administration LEV e T 200, rue des Commandeurs Lévis, QC G6V 6R2 ADDITIONAL INFORMATION DGPP Member Services Team Monday to Friday, 8:00 a.m. to 5:00 p.m or Website: desjardinsgroupplans@desjardins.com