In the case of deferred members of the pension plan, what are the implications of the proposed changes?

As deferred members are no longer accruing service credits, the minimum guarantee calculation and indexing would remain under the current rules. That being said, and depending on the length of time between the deferral date and pension initiation, investment returns continue to be applied to account balances, increasing the likelihood that a deferred member will receive a money purchase pension — in which case the five per cent contribution towards the non-reduction guarantee would apply, as would the changes to the excess interest procedure.

 

Posted in: The Pension Puzzle: Ask Bob! Part 2

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