Defined Contribution Pension Plan

[Mattzlaff]

Wasn't sure where to ask this on the forum so I'll post it here.

So It's 4AM I've been at work 11 hours now and I was cruising through my pension plan document, because you know we're mostly about money and retiring early.

So my document says, that my company is "required to pay 6% of my earnings" into my DCPP which is held at sunlife financial.

So I whip on over to my sunlife financial page and type in my password click a few links and get to my transaction history for my DCPP. I open my pay stubs online to cross-reference earnings VS DCPP transactions so that indeed I get 6% of my earnings, when something comes to my attention. I'm not getting 6% on my overtime...Doesn't that count as an "earning"?

It doesn't say it anywhere in the document but the 6% only seems to cover my salary, stat holidays worked(pay+16hrs) or not worked(Pay+8hrs) and my on shift adder(about 140$/pay). It doesn't cover overtime. Now this, if it's supposed to cover overtime, may be a large portion of my earnings not paid to my pension. You see I've averaged 300+ HRs/Year of overtime since becoming qualified in an area. That's a big bunch of earnings not paid at 6% over 5 years to my pension.

Now I'm only asking here because no one on my shift right now will know but doesn't "6% of earnings" cover overtime worked as well? Or is there some deep dark hole that I should be able to find this information? Does anyone else on a DCPP get their overtime paid out into the payment calculation?

[pbkmaine]

The online document is probably the summary plan description. The DC plan document, which is much longer typically, should define what "earnings" are for the purpose of your plan. I am guessing that your plan's definition of earnings does NOT include overtime. Ask HR for a copy.

[Prairie Stash]

I had the same problem with my company, I use to work 400 hours/year of OT. After I asked they ended up changing the pension plan document to define earnings as base pay to specifically exclude OT, our plan document just said earnings so I asked them if that was the CRA definition of earnings (includes OT) or something else. It is up to the company, not up to you or anyone else, there is almost no chance of getting retroactive pay because its sort of gray.

I'm now on the companies pension committee, if you do ask make sure its done very politely and you too might get tapped for the pension committee (sometimes they can't find anyone to fill the roles, its like being part of the chess club). Your company will also have a pension committee, I think its mandatory. Basically its a group of people who are tasked with making sure Sun Life isn't scamming them and they probably meet 1-2 times/year.

Better questions to ask yourself is are you invested appropriately. DC plans often have better MER's than private investment, you should balance your investments with that in mind.

[ltt]

I would definitely ask HR about this.  They may not be able to answer it, but should have a copy of the plan for you to look at which may answer your questions.  Keep us posted on this.

[NoStacheOhio]

I too have a DC pension account (401a in IRS parlance), to which my employer contributes a fixed percentage of my non-OT pay (increases with tenure).

[Reynolds531]

Sunlife is kind of mer heavy. Make sure they aren't over 35 BPs.

Anyone on a pension committee should ensure the company puts an indemnity in writing for them.

You could also check whether the plan allows voluntary contributions.

[jubilantjill]

I'm a nurse. We have a 7% contribution. A guy in payroll explained to me that the 7%is calculated based on my base pay and hours worked. So if I work 1 hour, I get 7%of my base pay. It doesn't include my $.40/hr for my bachelor's degree, or my cross-training differentials, or overtime or double time pay.  I work recovery room a huge chunk (probably close to 30%) of my paycheck includes callback pay at 1.5 or 2 x my hourly.

I'd imagine your pension plan is similar to mine, but I suppose it could just be an oversight. Double check with HR.

[RichMoose]

My pension uses base pay only to calculate my contributions and the organization's contribution as a percentage of salary, but it's a DB pension so it's a bit different. That being said, my retirement benefit also only considers base pay (average of top 3 years I think).

[Saskatchewstachian]

It really depends on the plan and the company. My DCPP is through a company similar to Sunlife and counts regular + OT towards earning for the pension as well as pays out the 14% contribution on bonus's as well. The don't however count the LOA (Living Away Allowance) as earnings which is a bummer, but I would rather have the OT than the LOA counted anyways.

[Mattzlaff]

Yeah seems earnings only covers the broad base of stat holidays and salaries.

Thanks for all the input