Notifying the Plan of Your Retirement
There are a number of administrative steps required to process clients’ pension benefits. Clients should advise their employer at least three (3) months before they plan to retire. The employer will advise NEBS and will outline the steps that they need to take to ensure that they receive their pension benefits in a timely manner.
Receiving Pension Payments
NEBS requires 60 days to process a termination and set up a new pensioner, provided all documents are received in a timely fashion. Plan members are entitled to receive their pension the month following their last day of work. Retroactive payments are provided should a pensioner's start date be delayed for any reason.
Pensions are paid as a lifetime annuity in equal monthly payments based on the value determined by the pension benefits formula. Pension payments are issued by direct deposit on the last day of the month by our bank, Canada Western Trust. In special circumstances where clients do not have a bank account, CWT can issue cheques in lieu of direct deposit payments. These payments will continue for the remainder of the client’s life, and the last payment received will be the last day of the month in which the client dies.
If the client has a spouse when they retire, their pension benefits must be paid as a “joint and survivor pension” unless the client and their spouse waives this right. This means that the surviving spouse will receive a lifetime pension after the client’s death that will be 50% of the monthly pension that was paid to the client.
Client’s pension is guaranteed for 60 monthly payments. This means that if the client dies without a spouse or dependent children before 60 payments have been made, the remaining payments will be made to their designated beneficiaries.
The Pension Plan also provides for post-retirement indexing. Once clients start to receive their pension benefit, it will be increased each year by an amount equal to the increase in the Consumer Price Index. If there is no change in the Consumer Price Index or if it decreases, the client’s pension will not be adjusted that year. Please know that post-retirement indexing is not a guaranteed benefit under the Plan. If the Plan was ever terminated, indexing could be reduced or eliminated.
Each year that the client’s pension is increased by the amount equal to the increase in the Consumer Price Index, a copy of the pay remittance stub will be mailed to all pensioners, in order to highlight the increase, as well as show the updated tax deductions.
Income Tax
Please be aware that pension benefits that clients receive from the Plan in retirement are taxable. Income tax will be deducted from pension payments. Clients should make sure to always file a tax return each year, as in some cases some of this tax will be returned to the client.
Each year in mid-February, Canada Western Trust will issue T4As to all pensioners in order to file their tax returns. If by early March the T4A has not been received, clients can contact the NEBS Office for an additional copy to be issued.
Updating Information with NEBS / Canada Western Trust
NEBS needs to be updated whenever pensioners move addresses, change their contact information, have a spousal change, need to update their beneficiaries, or would like to change their bank account for receiving their pension payments. This can be done using the forms found under the "Pensioners Forms" section of our website, and these should be completed, signed in blue ink, and submitted to the NEBS Office. We will submit the forms to CWT on the client’s behalf.
If pensioners move to a different province/territory, new tax documents will be required to submit to CWT. Please contact NEBS to request the appropriate tax documents.