Pension

Pediatric Critical Care Columnist · Nov 18, 2017

As of right now, most pension plans for Canadian nurses fall under a defined-benefit payout at retirement. The monthly amount paid to an annuitant is based on the person's best five earning years, which usually come nearer the end of their career rather than at the beginning. Contributions into the plan come from both employer and employee, with the employer paying slightly more. This is money in lieu of what the employer would otherwise be expected to pay as salary and other benefits. The money you put in now should be viewed as income deferred to a time when you have no option for increasing your income. Some provinces (excluding Ontario) allow part-timers to contribute to the pension plan at the same rates as the full-timers. Another factor you should be aware of is that part-time employment isn't counted as calendar years but actual years worked. I moved provinces 15 years ago and was forced to take the pension money deposited in my name as a return of contributions which then was invested in a locked-in retirement account. I've worked 70% FTE for 13 of the years I've been here, and 50% the last two. So although when I retire in 6 1/2 years at the age of 65, my age and calendar years employed by this system will add up to more than the "magic 85" for an unreduced pension, I'll only have reached a "magic 78 1/3". Having always worked part-time, I know my pension will be smaller than someone else's who worked the same number of years at full-time would be, and that's a risk I took on fully informed. To balance out that fact, I've managed over the last 10 years to top out my RRSP contributions to provide me with a bit more flexibility. In this day and age, women NEED to have their own income and pensions. Should my husband predecease me, I'll still receive his Armed Forces pension but only half of it. CPP survivor pensions are also about half of what the pensioner was receiving. The last thing I want at the age of 75 or older is to have to worry about paying my bills. So I'm saving now to have a nest egg for later. And you know what they say... Out of sight is out of mind. If you don't see that pension contribution money, you live on the money you do see. I strongly urge ALL nurses to save for retirement from the very beginning.

Dany102 · Nov 18, 2017

The advices given by NotReady4PrimeTime are pretty good. But don't underestimate the usefulness of a TFSA. Any extra income should first go into it, then RRSP.

Dany

dishes, BSN, RN · Nov 18, 2017

It's optional for part time hospital staff in Ontario to contribute to Healthcare of Ontario Pension Plan (HOOPP), but it's an option that all part timers should sign up for, as early as possible like notready4primetime said.