Winnipeg Free Press

Winnipeg Free Press (Newspaper) - October 29, 1989, Winnipeg, Manitoba Q d i pension income Cap must go Winnipeg free october 11 by Brenda Dalglish the Canadian press Jack Doe has always been a hard he started at the Bank As a clerk when he was 19 and now Hes looking Forward to retirement and some serious Gar so Jack was stunned to shortly after his 62nd that his annual pension income would be no greater than if he had retired in his this fictitious employee was caught by a Little known flaw in the Federal governments pension legis lation that limits the amount of pension income paid out each although the problem is catching Only a relatively few Lon serving or higher income employees the numbers will grow rapidly in the next few years As inflation continues to erode the value of a suggests Gordon author of Low risk investing and building Federal officials admit the Law needs to in the mean people like Jack will be in their Only Hope is to recognize the problem Early enough to build alter native retirement income and to pressure the government to Amend the the problem stems from a Cap on pension income that Ottawa imposed in says the limit was last adjusted in 1976 in a formula which established As the maximum that a registered pension plan could pay out annually to a retired per it was not indexed to sixty thousand dollars in 1976 is Worth More like according to one its one of those things Revenue Canada put in years ago when inflation want much of a problem and was a lot of Pape upper income earners or individuals who have spent More than 35 years at one company Are discovering that their retirement in come is limited by the the ceiling applies to most de Fine Benefit pension plans in the although some government and Crown corporation plans oper ate under different Pape a define Benefit plan is one that promises to pay a retired employee a specified percentage of his Pere Tir ement income each the government set a limit on the amount of pension income a plan could pay out because contributions to a registered company pension plan Are sheltered from during Rice financial celebrates its first anniversary of its new retail Centre at 491 Ince weve moved to 491 Portage Over 4000 new clients have come to Why consider the Tillat we ire a Complete financial service offering both guaranteed term investments and Mutual we rep resent Over 80 companies All under one you do not de posit with but through old Vou j there arc no fees for gics and Al cd lorm rasps and you Are guaranteed the highest rates available our track record proves that people maximize their return through d Iff Vou if flow for fixed Terni clip sits including rasps and All companies j by us Are listed in the brochure dated Jan uary did you know old Vou by representing Over 100 Mutual we give you the ability to choose the Best in order to maximize your ultimate return in your investment you can Navy a mix gics Mutual funds in your ask about oui rec portfolio planning service and our retire 1 ment planning you can have a11 of our investments Mutual Kwiw Grifs not Only those purchased through Rice financial coordinated on our exclusive free Centric ser of these reasons give you the advantage and resources of being the nest informed consumer when selecting and managing your says Pat of Revenue Cana the government wanted to limit the amount of Money a High income earner could avoid paying taxes Robusky the government plans to Correct the problem in its much delayed pension Reform but under the present schedule for introducing that legislation the Cap wont increase until she the annual maximum pension Cap is calculated by taking the lesser of two formulas d multiplying the number of years of pensionable service with a Compa to a maximum of by this sets a maximum on annual pension income of d multiplying each year of pensionable to a maximum of by two per and then Multi plying that by the average of your Best three consecutive years of com in other if you worked 35 years and the average of your three Best years was youd arrive at the figure of like youve worked longer than 35 years at the same company or your annual income is Over your pension will be capped at a level lower than is considered Satis experts say you should expect to need at least 65 to 75 per cent of your pre retirement income after you so if your income will be above when you or if you will have worked at one company for More than 35 there Are sever Al things you should the experts Check your pension plan to see if its affected by the if it make certain your company knows about the condition and does not keep deducting pension contributions after the Cap level has been some employers offer supplementary retirement plans for employees caught in this says if that int you will need to increase your own savings to bolster the inadequate pension in the Best Way to do that is by increasing your contributions to your registered retirement savings Pape individuals contributing to a registered pension plan can also put up to minus their pension plan contributions into an resp each once your company pension plan contributions you can take advantage of the maximum resp contribution now set at the lesser of annually or 20 per cent of your earned All coupons will be treated equally in tax get to clip away at discount coupons the Canadian press Consumers and shop keepers who rely on Dis count coupons face yet an other headache under the proposed goods and services retailers and accountants Ottawa plans to treat All Cou Pons the same when calculating the proposed tax whether there Money coupons from Ca Nadian tire or cents off coupons for a product issued by manufacturers or the employ a variety of approaches when they calculate their sales depending on the Type of combining the Federal and provincial rules could make for some Complex calculations at the checkout not to mention confused this is another Case of the great value of getting an Inte grated tax with one set of rules that everyone can under said Peter Vic president at the retail coun cil of under the proposed All coupons will be deducted from the Sale Price before the Federal tax is our approach is that the actual amount the Consumers pays is whats a finance department spokesman but the collectively and use different Only British Columbia and Newfoundland allow Money Cou such As those issued by Canadian to be deducted from the sales Price before provincial tax is in All other the Money coupons Are deducted after the provincial tax is be when it comes to product Spe civic coupons issued by All provinces except Quebec and new Brunswick allow the Cou Pons to be deducted before the tax is rung Nova Scotia and Saskatchewan go a step and break retailer coupons Down into three separate Only Nova Scotia and Prince Edward allow the deduction of manufacturers coupons before the tax is Reck resp Cashins can be costly Rice financial up the people place for Money management Winnipeg 491 Portage 7884040 in Celebration of our anniversary enter to win a trip for two to Mexico visit our office for contest runs Between 29 Brandon 613 10th Street 7286640 by Susan Yellin the Canadian press you have crimped and saved to put Money into a tax sheltered registered retirement savings plan every now theres a Chance for a Good Deal on a but the Only Way to manage a Down payment or a Mort Gage is to Cash in those resp in Many of which May not have reached taking Money out of an can be difficult and expend with Revenue Canada one of your biggest and certain types of resp investments Are Al most impossible to Cash even if Central h guaranty Best Rote Gic grand opening special Bonus Over posted rate on one year gics one year posted rate As of october annual interest minimum Purchase of Bonus coupons for on one year certificates Are available Only at both new locations Coupon Supply is generous but limited one Coupon per purchaser either buy or Reserve the Bonus valid up to december this offer not to be used with any other Gic offer new location 354 Portage Avenue at Carlton phone 9438504 9433556 new location Kildonan Crossings Regent phone 6616540 youre ready for a tax if the Money is locked away in a term Deposit or guaranteed invest ment certificate in Many the Only Way you can prematurely Cash it is to says Brian author of your Money and How to keep Only on rare occasions will an investment company or Bank be willing to let go of the even if you pay them a costello he suggests first contacting the company operating the resp to ask if it is possible to unlock the funds and at what you May be in at a High so they might be quite Happy to let you off the but if you have a term Deposit that locked away at a rate which is lower than today then they probably wont let you that because Banks and other financial institutions put Money from locked in rasps into Mort gages and other they Arent keen on having people Cash out be fore the plans reach be cause that forces the institution to look elsewhere to make up those one slim Hope is to sell the certificate through a but that can Only be done if the Gic is Transfer says author and broadcaster Gordon usually what will happen is that the broker will buy it from you at a discounted Price and sell it on the secondary most people dont know you can do but you if the resp contains Mutual or mortgage cashing in can be simple since they Are not term in but even if its simple to Cash a particular its important to consider How much of that hard saved Money will wind up in the hands of Revenue rasps Are designed to encourage canadians to save for so the principal paid and the interest that accumulates in the investment Are but any Money taken out is consid ered income and is registered retirement income funds if you Are thinking of converting your to a then youll need professional advice to assist you in selecting the proper we Are professional that our Well be glad to assist you in making your no 1 financial group i Forl Yeara 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