Glossary

¹ The pension credit gives a percentage (1.3% or 1.5%) of average salary up to average maximum pensionable earnings (MPE5) and 2% of average salary exceeding average MPE5.                           

Let us assume that this former employee wishes to receive their retirement pension at age 60, i.e. 14 years after having left Desjardins Group, and that the annuity indexation during those years is 2% for the years up until the December 31, 2008 and 1% for the years starting on January 1, 2009. The annuity payable under the plan, at age 60, will be $14,865.09, i.e.:

*The 30% percentage is approximate. This percentage may be less or more.

In addition, excess contributions calculated upon termination, plus interest, will serve to purchase an annuity that will be added to the previously determined annuity.                              

Defined benefit plan
In a defined benefit plan, the amount of the annuity is set in advance according to a precise formula. This formula generally corresponds to a percentage of the salary, multiplied by the credited years of service recognized by the plan. 

Dependent children
Any child under 18 considered to be your dependent is automatically covered if you are signed up for family or single parent healthcare coverage and/or spousal and dependent life insurance coverage. When a child turns 18, he or she may continue to be covered under the Plan if the following conditions are met: 

• The child must be a student. A student is an insured person aged 25 or less who is duly registered as a full-time student at an establishment recognized by the proper government authorities.
• The child must not have a spouse, as defined under the Group Insurance Plan.
• The child must be subject to parental authority exercised by you or your spouse, or would be subject to same if said child were a minor. 

Please note that a person meeting the following definition is also considered to be a dependent person. The individual is of full age, without a spouse, living in the member’s or the member’s spouse’s household, and suffers from a functional deficiency as set forth by regulation under the applicable provincial statute, if applicable, and which is a deficiency that must have begun when the person’s condition corresponded to the provisions under bullet 1 or bullet 2 above; in addition, to be considered as suffering from a functional deficiency for the purposes of the insurance contract, the person must not receive any benefit whatsoever under a last resort assistance program provided by any provincial statute governing income support, and be domiciled with a person who would have exercised parental authority over him or her, had he or she been a minor.

Employee contributions
Contributions paid into the plan by the employee.
Contribution rate = 5.90% of the contributory earnings up to 65% of the MPE and 9.30% on the surplus.
Example on a $30,000 salary: 30,000 X 5.90% = $1,770 
Example on a $60,000 salary: ($43,290 X 5.90%) + [($60,000 - $43,290) X 9.30%]  = $4,108.14

Employer contributions
Contributions paid into the plan by the employer.

Excess contributions
Excess contributions are the result of a calculation required by law to ensure that your vested pension is at least 50% financed by your employer’s contributions. This means that if your cumulative contributions with interest represent more than 50% of the value of your pension, the difference is added to your entitlements as excess contributions.

Locked-in
The inability to fully withdraw money from a retirement plan, a LIRA or an LIF since the money is intended to provide retirement income.

Locked-in Retirement Account (LIRA)
In general, a LIRA is a savings account set up according to a written agreement between an individual and a financial institution authorized for that purpose, in order to accept and invest lump sums from a registered pension plan (RPP), until they are converted to a Life Income Fund (LIF) or a life annuity or transferred to another RPP. From a tax point of view, this agreement must meet the registration requirements for RRSPs as well as the rules specific to LIRAs and locked-in RRSPs. A LIRA is a product created by the Québec Supplemental Pension Plans Act (SPP Act). It is related to the locked-in RRSP governed by the federal Pension Benefits Standards Act (PBS Act).t

The Canada Revenue Agency (CRA) limits the amounts that can be transferred into a LIRA. If the value of your pension is higher than the limit set by the CRA, the amount that cannot be transferred to your LIRA will be paid back to you (income tax will be withheld). If you are 50 or less, the maximum pension value that can be transferred corresponds to your pension amount multiplied by 9. If you are between 50 and 55, this value increases gradually to reach 10.4 at age 55.

Maximum Pensiona​ble Earnings
MPE means Maximum Pensionable Earnings eligible for the Régime des rentes du Québec (RRQ) for members in Québec and for the Canada Pension Plans (CPP) in the other provinces.

The MPE is the annual salary maximum on which a member can contribute either to the RRQ or the CPP.

For 2023, the MPE is $66,600.

Pension adjustment (PA)
The government implemented the PA in order to make fiscal assistance ceilings for retirement more equitable. Thus, the PA makes it possible to take into account the fact that certain individuals cannot prepare for their retirement unless they contribute to an RRSP, while others benefit from retirement plans (RPP or DPSP) for which the advantages may differ from one employer to another. The PA ensures that members of an RPP or DPSP can only contribute to an RRSP to supplement the employer’s pension plan. In a certain way, it represents the contribution that a taxpayer who is not a member of an RPP or a DPSP should pay into an RRSP, if he or she wishes to obtain a benefit equal to that acquired during the same year by a member of a RPP or DPSP upon retirement. 

Plan assets
All financial securities held by the retirement fund.

Retirement fund
Fund where contributions are deposited in order to pay retirement benefits and other benefits promised to members under the plan.

Spouse (for the purposes of the DGPP)
Important notes: 

• The definition of  “spouse” is not the same in the Desjardins Group Pension Plan (DGPP) and the Group Insurance Plan.
  For DGPP members outside of Quebec, the provisions of the applicable provincial legislation take precedence over the Plan Regulation and may differ from those presented below.
  

The summary definition of a spouse for members living in Quebec for the purposes of the Desjardins Group Pension Plan (DGPP) is as follows:

The spouse is the person who is married to or united in civil union with the member and who is not legally separated from bed and board from the member.

If the member is neither married nor civilly united, the spouse is a person who has been living with the member in a marital relationship for at least 3 years or, in the following cases, for at least 1 year 

• at least one child has been born or will be born of their union;
• they have jointly adopted at least one child during their marital relationship;
• one of them has adopted at least one of the other’s children during this period. 

Finally, if no one meets any of the above definitions, the member is deemed not to have a spouse for the purposes of the DGPP.

Supplemental Pension Plans Act (SPP Act)
The Supplemental Pension Plans Act governs the additional retirement plans of which private and municipal sector workers in Québec are members, as well as certain public sector plans. The Act is administered by Retraite Québec.

Tax withholding on refunds

All refunds in cash are subject to tax withholding in case of termination of participation. The applicable taxes withheld vary according to the amount of the refund as outlined in the following table. The exact amount of taxes payable will be determined when filing your income tax return for the year of the refund.

For participants living in the province of Québec:

For participants living elsewhere in Canada: