Save as Much as You Can

Whether your retirement is far away or coming soon, it’s important to be prepared

If you have the chance to participate in a workplace retirement plan, whether it’s with CLAC or not, it’s important that you take full advantage of it. Building your savings throughout your career can help you retire early, and with the lifestyle you want.

Some collective agreements offer workplace retirement plans, but you need to enrol to participate. Not sure if you’re enrolled? Check your pay stub for payroll deductions (look for codes/descriptions like ER/EE RPP or ER/EE RRSP) or speak to your payroll department.

Why Workplace Retirement Plans Make Sense

• Lower fees – Due to their size, employers or unions that offer workplace retirement plans can negotiate directly with service providers on behalf of all plan members. This results in lower fees than you would be able to get on your own.
• Regular contributions add up – Contributions are typically made automatically through payroll deductions. These smaller, regular amounts eventually add up to provide an income in retirement. 
• Free money – If a workplace retirement plan is offered, collective agreements normally set out a required contribution amount for both you and your employer. Some employers also have a matching program where they will match your contribution. Choosing not to participate, or not maximizing your contribution, is like saying no to free money.
• Tax deductions – Your contributions are tax-deductible and contribution and investment earnings are tax-deferred until you withdraw them.
• Additional voluntary contributions (AVCs) – Your collective agreement may allow you to make AVCs over and above what is set out as required contributions. If you can afford to do so, AVCs are an easy way to increase your savings.
• Transferring money in – Members of the CLAC Pension Plan and/or CLAC Group RSP can transfer existing registered funds, such as personal RRSPs and pension plan money earned with a different employer, into their CLAC retirement accounts. This helps members consolidate accounts and take advantage of lower fees and solid returns.

Two New Investment Options

In October, CLAC will introduce two new investment options for members of the CLAC Pension Plan and the CLAC Group RRSP. The CLAC Balanced Fund is designed to achieve long term growth, while the CLAC Conservative Fund reduces investment risk. For CLAC Group RRSP members, these funds will be available as individual investment options. 

If you participate in the CLAC Pension Plan, these funds will be part of the investment glidepath. Your account is 100 percent invested in the CLAC Balanced Fund until you reach age 53. At age 53, your account becomes part of the glidepath whereby 20 percent of your account balance is moved to the CLAC Conservative Fund every three years until it is 100 percent invested in the CLAC Conservative Fund at age 65. 

The glidepath helps guard against sudden shifts in financial markets as you get closer to your retirement while also giving you the opportunity for greater growth potential during your earlier years. Once you become eligible for the glidepath, you can choose to opt out of it, should you prefer a more aggressive investment strategy.