Depending on your age at the time of settlement, you may elect one or more of the available settlement options for your pension plan holdings.
For more information, please refer to the Pension Plan Brochures.
Options that provide a retirement income
Members contemplating receiving a retirement income may generally do so by purchasing either an annuity or transferring their pension holdings into a Life Income Fund (LIF).
When you buy an annuity, you exchange a lump sum of money for a lifetime income. Various optional forms of life annuity allow you to provide continuing payments after your death to a spouse or other beneficiary. Annuities can be purchased from life insurance companies.
- Life only: Pension is paid for your life only. Payments cease at death.
- Life with 5, 10 or 15-year guarantee: If you die before the end of the guarantee period, full payments continue to your beneficiary until the end of the guarantee period. If you live longer than the guarantee period, payments continue until your death.
- Joint & survivor: If you die before your spouse, a chosen percentage of your pension continues to be paid for the lifetime of your spouse.
- Joint & survivor with guarantee: If you die before the end of those chosen guarantee period (5, 10 or 15 years), your full pension continues to be paid to your spouse until the end of the guarantee period. At the end of the guarantee period, a chosen percentage of your pension continues to be paid for the remainder of your spouse's life. If you and your spouse both die during the guarantee period, your full pension is paid to the estate of the last surviving spouse for the remainder of the guarantee period.
You will find below a table which outlines the monthly payment offered by life insurance companies for single-life annuities (with no guarantee period) based on premiums of $75,000, $100,000, $250,000 and $500,000 of registered funds. Annuity Issuer Ratings provides the credit ratings on the life insurance companies noted below. These tables are updated monthly, are provided for illustration purposes only, and are subject to change without notice. While every effort has been made to ensure the accuracy of the information provided, the McGill University Pension Administration Committee and the University are not responsible or any errors or omissions, or for the results obtained from the use of such information. Members are cautioned to seek professional advice from a qualified independent advisor or financial planner.
Internal annuities (McGill University Pension Plan)
The internal annuity option was eliminated for all settlements after December 31, 2010.
Life income fund
A LIF is a specific type of registered retirement income fund (RRIF) to which you can transfer amounts coming from your supplemental pension plan. The difference between an RRIF (which has no withdrawal ceiling) is that you cannot withdraw more than an authorized maximum amount each year from a LIF.
A life income is the retirement income that you can receive from your LIF each year until your death. You can apply for it at any age. You must withdraw the minimum required under tax rules. However, since the amount in your LIF must be large enough to provide you with an income until your death, you cannot withdraw more than the authorized maximum each year. The maximum is calculated on the basis of your age, the balance in your LIF and the reference rate set for LIFs.
At the beginning of each year, your financial institution will calculate the minimum and maximum withdrawals you can make for the year in question. You will then receive the amount you request in the number of payments provided for in the contract you signed with your financial institution. The amount you withdraw are subject to income tax.
The Pension Administration Committee of the McGill University Pension Plan is has negotiated preferential rates with certain financial institutions for members wishing to purchase an annuity or open a LIF account. This may provide members with non-commissioned annuity rates as well as access to a wide range of professionally- managed investments funds at preferential management rates.
To learn more about the Sun Life offer, you are invited to contact them directly at:
Sun Life Financial
8:00 A.M. and 8:00 P.M Eastern Time every business day
For your convenience, information packages prepared by Sun Life and Standard Life may also be obtained at the McGill University Pension Administration office located at 688 Sherbrooke, suite 1420. You may also refer to Sun Life's documentation:
These options are not the only retirement options or necessarily the best options given your individual needs and circumstances. You are cautioned to carefully consider the merits of each offer in addition to all other retirement options before making any decisions.
This offer should not be considered to represent an endorsement for either institution by the University or the Pension Administration Committee. You should consider discussing your financial future with a qualified professional advisor.