 nitzguy
Premium Member
join:2002-07-11
Sudbury, ON |
to Devanchya
Re: RSP based company Contributionsaid by Devanchya:I'm being recruited by a new company due to a contract change and unlike my current place which is 100% Employer Pension plan, the new company has a 50 cents on the $1 to a limit of $6000 per year. They allow the RSP to start with in 6 months of start.
Are there any traps to be considered with this type of plan? I'm looking at negotiating a "bump" in base pay to cover my side of the contribution but other than that I'm not sure what to question or if I have any major concerns with this type of plan.
...I don't know if there are any traps vs. it not being as good as your current pension plan. I'm confused by this "100% employer pension plan" comment though...typically its a match between you and your employer...ie, you contribute 3%, they contribute 3%....I want to say its rare that the employer would pay 100% into an employees pension plan, but maybe that you're just not seeing the deduction on your paystubs properly? I mean even in the public service they have matching contributions...employee pays 6%, Employer pays 6%...or something to that effect.... All this means is that they'll contribute 1/2 of whatever you put in to a maximum of $6k/yr. Or, in a bi-weekly manner that's up to ~$230/per pay on the year to get the maximum from you. Meaning you'd have to contribute $460/pay to get their $230/pay just to put it in perspective...I'm not sure what $460/pay is as a percentage of your income but that's $12k/yr roughly that you'd be putting in.... Personally speaking I feel like that's a lot for a defined contribution pension plan, am I wrong? Last company I had a pension plan at it was 3% from me and 3% from employer... |
|
 J E F F4Whatta Ya Think About Dat?
Premium Member
join:2004-04-01
Kitchener, ON |
J E F F4
Premium Member
2013-Mar-20 4:59 pm
For public sector, it's 9.3-10.3% each. It was underfunded for years, now the newer hires have to pay for past mistakes. |
|
TP-Link Archer C7
Technicolor DCM476
Grandstream HT701
1 edit |
I have a share plan that works that way. For every dollar I put in (up to 5% of salary) the company puts in 50 cents. Works great. I'm lucky enough to also have a defined benefit pension plan.
Forgot to mention that I hold these shares within an RRSP so it's really a similar arrangement to yours. Basically it's free money so I'm not sure why you'd be looking at it with suspicion. |
|
 dirtyjeffer0Posers don't use avatars.
Premium Member
join:2002-02-21
London, ON |
said by Mike2009:I have a share plan that works that way. For every dollar I put in (up to 5% of salary) the company puts in 50 cents. Works great.
mine is the same (but i don't have the DB portion)...my wife's is the same as yours (with the DB portion). |
|
nitzguy
Premium Member
join:2002-07-11
Sudbury, ON |
to J E F F4
said by J E F F4:For public sector, it's 9.3-10.3% each. It was underfunded for years, now the newer hires have to pay for past mistakes.
Yes, Nitzguy's gf is a teacher and she pays quite a large sum...I was surprised at the amount...being about 12% of her net pay I believe... I guess I was in a different industry...I'm waiting on the new employer to jump in as jumping into the OPB at this point would be pointless as a DB plan. |
|
J E F F4Whatta Ya Think About Dat?
Premium Member
join:2004-04-01
Kitchener, ON |
J E F F4
Premium Member
2013-Mar-21 3:34 pm
Does that 12% include their sabbatical? |
|
mr weather
Premium Member
join:2002-02-27
Mississauga, ON |
to nitzguy
said by nitzguy:Yes, Nitzguy's gf is a teacher and she pays quite a large sum...I was surprised at the amount...being about 12% of her net pay I believe... Mrs. Weather is a teacher as well and she pays about 12%. It essentially means she has no room for personal RRSP's although she does have a TFSA. |
|
 DKSDamn Kidney Stones
join:2001-03-22
Owen Sound, ON |
to J E F F4
said by J E F F4:For public sector, it's 9.3-10.3% each. It was underfunded for years, now the newer hires have to pay for past mistakes.
Or, if you are a part of HOOP, they are sitting on about 50 billion dollars. Fully funded and will be for years. My own DB plan is 9%/7% employer/employee,, which is the new norm and new members get reduced pensions. |
|
| DKS |
to mr weather
said by mr weather:said by nitzguy:Yes, Nitzguy's gf is a teacher and she pays quite a large sum...I was surprised at the amount...being about 12% of her net pay I believe... Mrs. Weather is a teacher as well and she pays about 12%. It essentially means she has no room for personal RRSP's although she does have a TFSA. Same with me. Not much RRSP room but TFSA is fine. |
|
J E F F4Whatta Ya Think About Dat?
Premium Member
join:2004-04-01
Kitchener, ON |
to DKS
No reductions here for newbies...although one thing they did was get some people to retire early and offer full pension (as defined).
What does HOOP stand for? I'm OMERS. We're sitting on a lot of money, but it's not "a lot" when you factor in pension payouts over the next 40 years. |
|
|
| |
Healthcare of Ontario Pension. Not sure what the extra O stands for. You'll find a lot of hospitals are members. They send me a letter every year saying everything is hunky dory. » hoopp.com/ |
|
peterboro (banned)Avatars are for posers
join:2006-11-03
Peterborough, ON |
to DKS
said by DKS: Or, if you are a part of HOOP, they are sitting on about 50 billion dollars. I'll be getting a taste of that 50 billion eventually myself and it's HOOPP (Healthcare of Ontario Pension Plan). We got a 17-per-cent return on investments last year BTW people. |
|
| peterboro |
to graniterock
said by graniterock: They send me a letter every year saying everything is hunky dory. I think every plan does that regardless of their growth. |
|
J E F F4Whatta Ya Think About Dat?
Premium Member
join:2004-04-01
Kitchener, ON |
J E F F4
Premium Member
2013-Mar-23 5:54 pm
said by peterboro:said by graniterock: They send me a letter every year saying everything is hunky dory. I think every plan does that regardless of their growth. They sure do....  |
|
| |
But.... I have no reason to not believe them. It's not like I'm gonna have to wait 30 years to find out... Wait a sec! |
|
|
DKSDamn Kidney Stones
join:2001-03-22
Owen Sound, ON |
to peterboro
said by peterboro:said by DKS: Or, if you are a part of HOOP, they are sitting on about 50 billion dollars. I'll be getting a taste of that 50 billion eventually myself and it's HOOPP (Healthcare of Ontario Pension Plan). We got a 17-per-cent return on investments last year BTW people. Yup. We are already getting a taste in our house. Very nice. |
|
| DKS |
to peterboro
said by peterboro:said by graniterock: They send me a letter every year saying everything is hunky dory. I think every plan does that regardless of their growth. Pension law requires it. |
|
