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Here is the missing piece, David. It is not
all the same whether you contribute 10% to DB or stay witth DC
and save the money. First there is the fact that you are not
allowed to save 10% tax free, but only 8% (for an 18% total
with the 10% contributed by SFU)
But, more importantly, as several people
pointed out: " In this case,
annuities are 35% to 45% cheaper through the BCCCP (or indeed
any group annuity pension provider) than through individual
(non-group) purchase. " (from a Krishna Pendakur
contribution).
So if it isa pension your are after (as
opposed to cash you can do whatever you want with), the DB
plan is vastly superior.
MH
On 11/25/2018 11:59 AM, David
Zimmerman wrote:
Hello SFU Faculty.....
This comment on the current pension situation is sent on a
strictly FWIW basis.
So, FWIW:
I am
an SFU retiree, who left teaching behind six years ago, took
the DC Sun Life pension available at the time, and had it
invested in a retirement plan [also Sun Life, as it
happens, the best of the offered alternatives I canvassed in
2012, but that's another story].....
My question to those who have been agonizing over the choice now facing them is
this:
If you have any doubts about the new plan offered, with
the 10 % mandatory contribution
feature, then, why not just....
- Vote "No,"
i.e vote to remain in the current plan, which has no
mandatory contribution, and...
- in order to
reap the benefits of having an additional monthly contribution
not covered by the SFU portion of the current plan,
and then simply....
- designate some percentage of your monthly
salary as an additional pension contribution?
It's your choice to make what the rate deducted will be.....
if 10% is too high given your mortgage, etc., then designate something lower, but....do
designate some percentage in order to increase your monthly
pension contribution above the SFU portion.
Agonizing choice resolved?
If not, why not?
After all, the choice of making
or not making that additional contribution, above the SFU
minimum, is in your hands, and always has been.
If you do opt to have some percentage deducted, then you just have to exercise the requisite discipline to authorize those additional
contributions per month, and stick to that plan.
Moreover, SFU will help you exercise
that discipline.... by
first, accepting your instructions to make the
additional withdrawals from your pay check, and then
actually doing that every month.
Foolishly, during my 40 years or so at SFU, I never did what I am
now suggesting that you-all do, the faculty who
are agonizing over the current choice.
If I had, my retirement income in 2012 would
easily have been double of what I currently live on.
In the light of that foolish decision on my part, my nightly prayer is.....
"Thank you, SFU, for having made, for all those
years, a monthly contribution to my pension fund...
whether I matched it or not [which I never did].... unlike many universities, who do demand matching
contributions."
If SFU had not done that, I would now be living
pretty much solely on my CPP and OAS, which, while more
generous than anything available in the USA, would hardly
sustain the luxurious life that I now lead.
"Thank you, SFU retirement fund."
Further questions:
- Why did the Faculty Association even bother to present SFU faculty with
the current choice, which has turned out to
be so agonizing for so many?
- The principal feature of
the new proposed system seems to be the mandatory 10% deduction....
- The stated reason was a fear that faculty
members were not putting enough by for their
retirement.
- Ok....
but wouldn't a better approach have been simply to
remind faculty that they already have the option of
making a monthly voluntary contribution... and
strongly urging everyone to do so, to the tune of
whatever percent is feasible to the individual?
Of course, I may be
missing something really important about the proposed
plan, registered in the recent flurry of emails.
Best wishes,
David Zimmerman
On 11/25/2018 11:59 AM, David Zimmerman
wrote:
Hello SFU Faculty.....
This comment on the current pension situation is sent on a
strictly FWIW basis.
So, FWIW:
I am an SFU retiree, who left teaching behind six years ago,
took the DC Sun Life pension available at the time, and had it
invested in a retirement plan [also Sun Life, as it
happens, the best of the offered alternatives I canvassed in
2012, but that's another story].....
My question to those who have
been agonizing over the choice now facing them is
this:
If you have any doubts about the new plan offered, with
the 10 % mandatory contribution feature,
then, why not just....
- Vote "No,"
i.e vote to remain in the current plan, which has no
mandatory contribution, and...
- in order to
reap the benefits of having an additional monthly contribution
not covered by the SFU portion of the current plan, and
then simply....
- designate some percentage of your monthly
salary as an additional pension contribution?
It's your choice to make what the rate deducted will be..... if
10% is too high given your mortgage, etc., then designate something lower, but....do
designate some percentage in order to increase your monthly
pension contribution above the SFU portion.
Agonizing choice resolved?
If not, why not?
After all, the choice of making or
not making that additional contribution, above the SFU
minimum, is in your hands, and always has been.
If you do opt to have some percentage deducted, then you
just have to exercise the requisite discipline to authorize those additional
contributions per month, and stick to that plan.
Moreover, SFU will help you exercise
that discipline.... by
first, accepting your instructions to make the additional
withdrawals from your pay check, and then actually doing
that every month.
Foolishly, during my 40 years or so at SFU, I never did what I am
now suggesting that you-all do, the faculty who
are agonizing over the current choice.
If I had, my retirement income in 2012 would
easily have been double of what I currently live on.
In the light of that foolish decision on my part, my nightly prayer is.....
"Thank you, SFU, for having made, for all those
years, a monthly contribution to my pension fund... whether
I matched it or not [which I never did]....
unlike many universities, who do demand matching contributions."
If SFU had not done that, I would now be living
pretty much solely on my CPP and OAS, which, while more
generous than anything available in the USA, would hardly
sustain the luxurious life that I now lead.
"Thank you, SFU retirement fund."
Further questions:
- Why did the Faculty Association even bother to present SFU faculty with
the current choice, which has turned out to be so agonizing for so many?
-
The principal feature of the new proposed
system seems to be the mandatory 10% deduction....
- The
stated reason was a fear that faculty members were not
putting enough by for their retirement.
- Ok.... but wouldn't a
better approach have been simply to remind faculty that
they already have the option of making a monthly
voluntary contribution... and strongly urging everyone
to do so, to the tune of whatever percent is feasible to
the individual?
Of course, I may be missing something really
important about the proposed plan, registered in the recent
flurry of emails.
Best wishes,
David Zimmerman
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