Commuted Values Explained | Pension Plan Termination Selection Statement

[@evadeanu1]

Very informative. Thank you, Adam.

[@sandys158]

Very well explained

[@ParallelWealth]

Thank you!

[@ryanvanderheyden3324]

Great video

[@Hyperpandas]

Is there a way to estimate the taxable part of a commuted value? Understanding that the total amount is a function of expected monthly benefit and interest rates at the time, it would be good to know how much RRSP room someone might want to keep available if they thought they might opt for commuted value in the future. And thanks for the great content!

[@archibaldsangrador1931]

Thanks for your videos, Adam. I learned so much from them. What I don't like about taking the CV is that it's almost certainly lower than the contributions made to the plan. Taking pension payments on the other hand, I will have to live up to my late 70s just to breakeven and only see profit in my 80s. Also, pension payments are only guaranteed for 5 years so my beneficiaries won't get a dime after that. Seems like the odds of enjoying in some profit or at least getting my money back is slim to none. Pension contributions aren't cheap either. 😒

[@ParallelWealth]

All pensions have different options, often will have up to 15 year guarantee payments or a survivor payment.

[@archibaldsangrador1931]

@@ParallelWealth Yes, the pension has an option for 15 years guaranteed for single but only 5 years for joint. I have an RRSP which I have contributed in for only 4.5 years with employer matching from my previous job. By my projections, I'd most likely get a higher income from my RRSP versus my pension after I'd have contributed to it for 20+ years. Also I'm contributing more $ (almost 2x more) to the pension versus my RRSP back then. In short RRSP (4.5 years of contribution) beats Pension (20+ years of contribution). It seems to me like my pension plan is like a piggy bank with a hole at the bottom. It would be great if you can make a video comparing pension versus RRSP with some numbers crunching showing which is better. I'd appreciate it, thanks!

[@FonzCoral]

Is Ontario PP CV available up to age 65?

[@ParallelWealth]

Every DB pension is different. You would have to check with yours directly.

[@josephx6786]

I was let go from seasonal employment with only 7,800 in RPP. I was wondering if withdrawing the funds to have it in my possession is a good idea?

[@Udjeox]

I don't know what Alberta teacher pension plan is doing but my commuted value currently in 2021 is going backwards. It's less than last year and my income is the same. Not sure if it has something to do with the drama from the government who tried to transfer the money to a different management company earlier. The mess up part is your monthly pension estimate is the same value. Not sure how many teachers know about the commuted value. Something fishy is going on.

[@ParallelWealth]

Yes, commuted values have dropped a fair amount the past year. Look at 30 year bond rates as a guide.

[@deport5280]

With HOOPP, if a single person dies 5 years after receiving the pension, the beneficiary ( eg. son) will receive the remaining pension for 10 years. It has a guaranteed payment of 15 years. Would you still advise this person to withdraw the commuted value of the pension?To save on taxes, you are advising to transfer it to RRSP. But isn’t it that if a single person dies, the rsp is considered as income on the year of death which means in this case it is taxed at a hefty 50%?

[@ParallelWealth]

Usually pensions have a 5-15 year guarantee in case of early death. In that case I have never seen a commuted value once payments starts. Could be possible, but never come across it. As for second question - run the math, yes it's taxed but still lump in beneficiaries hands versus just a few more years of payments.