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Retirement
Anyone?
by
Michel Plamondon
Lately I have been receiving several inquires
about retirement. In this article, I will outline the steps to be
taken in order to retire. Remember that you must meet the
eligibility requirements so make sure that you qualify.
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Notify your employer before April 1. You should advise your
principal and you must submit an official letter of resignation
to the Superintendent. Verbal notification is not sufficient. It
is not essential to notify your spouse but it might not be a bad
idea because he/she will be the person most affected by your
decision. I know that my wife will need a lot of advance notice.
Verbal notification is sufficient in this case assuming that you
are still on speaking terms.
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Write a letter to your Superintendent requesting your
service gratuity. You must indicate whether you wish to receive
it directly or roll it into an RRSP.
If you choose to receive it directly, it will be taxed at
source as follows: ten percent if the gratuity is less than
$5,000., twenty percent if it is between $5,000. and $15,000 and
thirty percent if it is more than $15,000. You can kiss that new
car goodbye, the tax man must get his pound of flesh.
If you decide to roll it into an RRSP, you must make
arrangements with a financial institution of your choice and the
money will be sent directly to that institution in your name. You
need not have any RRSP contribution room in order to take
advantage of this option. You are entitled to shelter $2,000. a
year of retirement allowance for every year of service prior to
1995.
You may opt to use a combination of these two options.
The service gratuity is payable within thirty days of contract
termination. You may request it when you submit your letter or
resignation.
3.
Contact the office of Rebecca Gill at Pension and Benefits, PEI
Public Service Commission
at 368-4200 and request the necessary forms.
Four forms
will be sent to you: an Application for
Superannuation, a form for
direct deposit of your pension in your bank
account and two TD1 forms for
income tax purposes (one for
Provincial taxes and one for Federal taxes). A
copy of your
birth certificate or other proof of age will be required. You
did not think
that this was going to be easy, did you? These forms should
be completed by mid-May or earlier if possible.
4. Contact Johnson Inc. to discuss
the insurance coverage that you wish to
retain. You may keep all your coverage except the dental plan. I
guess it
must be assumed that retired teachers don’t have any
teeth after chewing
out all those kids. Therefore, get your teeth
cleaned, filled or pulled before
you retire.
Keep in mind that the employer does not cost share any of the
retiree benefits. If you decide to drop any of the coverage that
you now have, you will not be able to get that coverage back after
you are retired.
If you are retiring at the end of the school year, your
coverage is still in force until September 30. Arrangements to
switch from the active plan to the retiree plan should be made
before the end of June because premiums are deducted a month in
advance and will be made on the September pension cheque.
If you have any questions please contact Michel Plamondon at
Federation House, 569-4157 or toll-free at 1-800-903-4157.
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