IMPORTANT Pension Report
General Motors has released their implementation date for Ontario Regulation 420/19. As mentioned in my September, 2020 Pension Report, this could lower commuted values. I now have a concrete answer from the company and will outline it in the following report. General Motors will adopt the new CV regulations starting January 1st, 2021. This will NOT affect the GM Monthly Pension.
Q: What date do I have to end my employment by if I want to be sure my CV calculation is under the current method?
A: Your last day as an active employee must be no later than November 30th, 2020. This means you must be retired as of December 1st, 2020.
Q: I’m planning on retiring in early 2021. How much difference should I expect on my CV balance?
A: The amount of difference will change monthly, depending on the amount of the bond market. If Federal, Provincial and Corporate bond yields are similar to July, 2020, the estimated reduction in CV value would likely be in the range of 3% – 4%. Other factors that will impact the amount of the reduction include your age at retirement, your spouse’s age (if applicable), and the size of your lifetime pension to your bridge pension.
Ex; A $700,000 commuted value pension could see a potential reduction of $21,000 to $28,000.
Q: Can I get an estimate reflecting the new Commuted Value calculations?
A: General Motors is currently working with the GM Canada Benefit Centre to have their modeler updated. The estimated completion date is late October 2020. This means I cannot provide estimates for retirements after December 1st, 2020 currently.
Q: Where can I go to read the details of the new CV standards?
A: The new CV standards are prescribed by the Canadian Institute of Actuaries Standards of Practice, Section 3500. Please refer to Standards of Practice, Section 3500 under the “Resources” tab, at: www.cia-ica.ca
For further information: CLICK HERE Hourly QA for CV standard change – General Motors Provided
It is important that members review the following links in order to help them make an informed decision going forward and it is recommended that members speak with a trusted financial advisor or accountant before making any pension election:
Jordan Lennox, Pension Representative
In-plant : 905-641-6443
Union Hall 905682-2611 x 232
E Mail: Jordan.Lennox@GM.com
Ken Maclean, Alt. Pension Representative