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This section answers frequently asked questions about contributing to the Canadian Blood Services Defined Benefit (DB) Pension Plan.

Are my pension contributions tax-deductible?
  • Yes. All your contributions to the DB plan are fully deductible from your taxable income. You benefit right away, also, since contributions to the plan are deducted from your pay before Payroll calculates your income tax.

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If I decide later that I don't want to take part in the plan, can I stop contributing?
  • No. Once you are a member of the plan, you continue to contribute as long as you keep working at CBS and your money stays in the pension fund until you leave CBS, retire, or die.

  • If you want, you can stop making MPF contributions but, if you do, you won't be able to begin making them again.

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What circumstances might make my contribution rate change?

The total cost of the plan could change, based on:

  • the actuary's valuation of the plan (done at least every three years) which, among other things, considers past experience (such as investment returns on the pension fund) and makes assumptions about future experience (such as interest rates), or

  • improvements to the plan.

In this case, your required contributions could also change, based on the formula described on the Contributions page.

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Won't I end up paying for most of my pension if I work for CBS for a long time?
  • One characteristic of the DB plan is that CBS must pay for at least 50% of the cost of your benefits from the plan.

  • First, the value of your pension is determined when you retire, leave CBS, or die. The value of your pension is the amount of money the actuary estimates it will cost, in today's dollars, to purchase the amount of pension you're entitled to.

  • If your required contributions, with interest, equal more than 50% of that value, you will receive the excess amount, either as additional pension, or a cash refund.

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Where are the contributions—mine and CBS's—held?
  • Your contributions, CBS's contributions, and the investment income this money earns are in a separate pension fund, managed by professional investment managers.

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If I'm now making MPF contributions, what happens to these contributions after November 30, 2004, when this feature ends?
  • When you choose to stop making MPF contributions, or on November 30, 2004, whichever happens first, your contributions and CBS's corresponding contributions, along with interest, will remain in the pension fund and continue to accumulate interest at the rate of return of the fund as a whole, until your retirement, termination of employment, or death. You will receive updates on these contributions separately on your annual pension statement.

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What rate of interest do my contributions earn?
  • Interest on your required contributions depends on an external benchmark, that is, average rates of returns offered by Canadian chartered banks on personal, five-year, fixed-term deposits. The average is calculated over a 12-month period ending on December 31st of the year before the interest is credited.

  • Interest begins to build up on the first of the month following the month the money is deposited in the pension fund, and is compounded annually.

  • If you are making MPF contributions, they will be credited with interest at the rate of return earned by the fund as a whole.

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