GRADUAL RETIREMENT Gradual retirement enables employees aged 55 or over, pursuant to an agreement with their employer, to reduce their hours of work (See: Section 8-13 of the DGPP Regulation). In ordrer to compensate for the loss of income, the member can request an annual lump-sum payment from the Desjardins Group Pension Plan (DGPP), not to exceed 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's members). During gradual retirement, the employee s contributions to the DGPP will be adjusted to the new work schedule or, if the employee does not withdraw money from the DGPP (to partly compensate for the lower salary), contributions can be made for the hours that were effectively worked, according to the same terms as part-time employees. For the purposes of 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 the number of hours had not been lowered. For the Disability portion, the salary used to calculate the insurance and premiums is the salary that the employee actually earns with respect to the number of hours worked and premiums will be adjusted according to that salary. In addition, at the age of 60, an employee may receive his annuity for early retirement from the RRQ. In brief, the eligibility conditions are: Be over 55 and under 71 * Sign a gradual retirement agreement with the employer Reduce the hours worked Have a planned date of retirement Lump sum withdrawals are made on a voluntary basis and are limited to one per year * Employees 65 years or over may receive their pension benefit from the DGPP while continuing to work. You will find below: A model agreement relative to remuneration paid during gradual retirement A request for early benefits under the gradual retirement program
AGREEMENT RELATIVE TO REMUNERATION PAID DURING GRADUAL RETIREMENT (BILL 102) BETWEEN: A legally constituted corporation, having its head office at: Hereinafter referred to as THE EMPLOYER, Represented herein by: AND Domiciled and having residence at the following address: Employee s date of birth: Employee s Social Insurance Number: Hereinafter referred to as THE EMPLOYEE.
WHEREAS the Employee is aged 55 or over. WHEREAS the Employee's pay periode is. WHEREAS the Employee, before the work schedule is reduced, works hours per pay period and receives as regular remuneration (according to the definition in Section 6-1 of the Desjardins Group Pension Plan By-laws) the sum of $. WHEREAS the Parties hereto wish to modify their obligations relative to the Employee s work schedule and establish an agreement setting terms during the period of gradual retirement. THEREFORE, THE PARTIES MUTUALLY AGREE AS FOLLOWS: 1. DURATION OF THE AGREEMENT A gradual retirement agreement is undertaken between the Employee and the Employer for the period from to. 2. REDUCED WORK SCHEDULE The number of hours worked shall be reduced by period mentioned in Point 1. The new work schedule shall therefore be hours per pay period, for the hours per pay period. 3. REMUNERATION The Employee shall receive, as regular salary for his or her work under the reduced hours schedule, the sum of $ per pay period, for the period mentioned in Point 1. This salary may be modified on January 1 of each year. 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. For disability insurance, premiums shall be calculated according to the salary earned for the hours worked (same terms as for part-time employees). For other coverage, the pricing remains fixed. Group Insurance premiums shall be shared between the Employee and the Employer, in accordance with the usual terms and conditions.
5. DG PENSION PLAN Contributions to the DG Pension Plan shall be established according to the new work schedule or, if the Employee does not withdraw money from the DGPP (to compensate in part for the lower salary), the contributions may be calculated on the hours actually worked, according to the same terms as part-time employees. Recognized years paid into the DGPP shall therefore be calculated in proportion to the normal work week. DGPP contributions (Employee and Employer share) shall be shared so that the Employee pays 35% and the Employer pays 65%. For the entire duration of this period, continuous years of service shall be recognized in full. 6. MODIFICATIONS TO THE GROUP INSURANCE PLAN AND TO THE DESJARDINS GROUP PENSION PLAN AS WELL AS VARIOUS DEDUCTIONS REQUIRED BY LAW For the duration of the agreement, the Employee and the Employer shall be subject to any modification applicable to Group Insurance premiums and to the DGPP contribution rate. In addition, the Employee and Employer shall be subject to various changes to the DGPP Regulation and required by law in terms of deductions. 7. MODIFICATIONS TO THE AGREEMENT Should any modifications be made to this agreement, the Employer and Employee must inform the Desjardins Group Retirement Committee. 8. WITHDRAWALS Only one withdrawal per calendar year is allowed, and the request must be made annually to the DGPP for each year of the agreement in which the Employee wishes to obtain a lump sum. 9. TERMINATION OF THE AGREEMENT The agreement shall be terminated at the first pay period following a pay period during which one of following events occurs: The number of hours of the work week provided in the agreement is changed Under the Act respecting the Québec Pension Plan, the Employee becomes the beneficiary of disability income or retirement income The Employee no longer resides in Québec under the terms of the Taxation Act (RSQ, c. 1-3). 10. INFORMATION The Employee declares having had the time to read this document and obtain all necessary information.
The Employee further declares that he/she freely and voluntarily consents to this agreement. 11. TRANSACTION The Parties agree that this contract shall constitute a transaction in the sense given under the Civil Code, made without any admission of liability on the part of the Parties and may not in any case be invoked as precedent. 12. CONFIDENTIALITY The Employee agrees not to use or disclose, directly or indirectly, any confidential information entrusted or revealed to him/her by the Employer insofar as the use or disclosure of such information may be prejudicial to the Employer or any other organization affiliated with the Employer and agrees to remit to the Employer any document, written item or material belonging to the Employer or that may contain confidential information concerning the Employer. SIGNATURES: IN WITNESS WHEREOF, the Parties have signed: at this Employee Employer Originals are kept by the Employee and Employer (send a copy to the payroll administrator) A copy has to be sent to: Desjardins Financial Security Defined Benefit Plan Administration LEV 200 4e T 200, rue des Commandeurs Lévis QC G6V 6R2 Another copy must be sent to: Desjardins Financial Security Group and Business Insurance Contract, Administration Department 200, rue des Commandeurs Lévis QC G6V 6R2
DESJARDINS GROUP PENSION PLAN REQUEST FOR EARLY BENEFITS UNDER THE GRADUAL RETIREMENT PROGRAM (BILL 102)* Given the gradual retirement agreement signed with my Employer on request the following lump-sum** payment:, I hereby $ Date of payment I request that this sum be paid to me in the following manner: Taxable amount Transferable to RRSP (non-taxable) # (Attach T2151) Name of institution: I understand that this request must be made annually for each year of the agreement in which I wish to obtain a lump sum, 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. Signature of the Employee Date Desjardins Group Retirement Committee Date ** Under to the law, the amount requested cannot be higher than the lesser of: 70% of the reduction in remuneration brought about by the reduction in work time during the year of the payment 40% of the maximum pensionable earnings (MPE) for the year of payment The value of rights under the retirement programs, should employment have ceased on the date of payment of the early benefit for gradual retirement. Send original to: Desjardins Financial Security Defined Benefit Plan Administration LEV 200 4e T 200, rue des Commandeurs Lévis QC G6V 6R2 * Applicable only to Quebec's members