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


What is the difference between the DB and DC plans?
  • A DB (defined benefit) plan is one where the pension you ultimately receive when you retire is based on a specified formula. This means the level of your retirement benefit is guaranteed.

    • As of November 1, 1997, under the CBS DB plan, your monthly pension equals 1.6% of your best average earnings (the average of your highest five consecutive years' earnings) multiplied by your years of pensionable service (years you are a member of and contributing to the pension plan).

    • As of March 1, 2003, as a member of the plan you contribute 5.0% of your pensionable earnings to the plan each year. CBS contributes an amount equal to 7.0% of your pensionable earnings to the plan as well.

    • The Trustees of the CBS Defined Benefit Pension Plan are entirely responsible for investing the pension money and will provide you with the promised amount, regardless of how well the investments perform.

  • A DC (defined contribution) plan is one where the amount of your contribution to the plan is fixed.

    • You choose how to invest your contributions, along with CBS' contributions to your account, from a variety of investment options. You can change your investments as often as you like and you should review them periodically to ensure they are appropriate for your age and your tolerance for risk.

    • As a result, your pension depends on how well your investments perform.

    • Under the CBS DC plan, you contribute 4.75% of your earnings (excluding bonuses, shift premiums, and overtime pay) to the plan each year. CBS contributes 6.75% of your earnings to the plan as well.

  • Under the DB plan, however, the amount you and CBS are required to contribute depends on the total cost of the plan and may change periodically. If the total cost of the plan is between 9.5% and 11.5% of pensionable earnings (the earnings recognized for pension purposes of all CBS employees who are members of the plan), then you contribute 4.75% of your earnings and CBS contributes the difference, up to 6.75% of pensionable earnings. If the cost rises above 11.5% of pensionable earnings, the plan members and CBS will share the additional cost equally. If the cost falls below 9.5%, the members and CBS will benefit equally from the reduction below that amount. Under the DC plan, the contributions you and CBS are required to make remain fixed.

  • Under the DC plan, the contributions you and CBS are required to make remain fixed.

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Should I join the Defined Benefit Plan or the Defined Contribution Plan?

We can't advise you about which plan to join. It is your personal choice and you may want to contact an independent financial advisor to guide you.

However, here are some issues you may want to consider when making your choice:

Are you represented by one of the Participating Unions?

  • CBS employees represented by one of the Participating Unions join the DB plan when they become eligible or are required to participate in a pension plan. Other employees may join either plan.

How much risk are you willing to accept?

  • Under the DC plan, you will assume all of the investment risk. If your investments perform poorly, you may receive a smaller pension than you might have under the DB plan. If your investments perform well, you may receive a larger pension than under the DB plan. If you choose the DB plan, you are guaranteed a pension amount calculated according to your earnings and your years of service. If the DB plan investments perform well, the surplus may be used to improve benefits, to reduce contributions or may be held as a reserve against fluctuations in investment performance.

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Should I enroll now or wait for two years?
  • Pension is an important part of your compensation package from Canadian Blood Services. You are planning and saving for your retirement income and, in contrast to an RRSP, CBS is contributing as well. Pension plan participation increases your total compensation by the 7.0% of pensionable earnings that CBS contributes to the pension plan on your behalf —the way to get this 7.0% is to join a pension plan! Your contributions are tax deductible - so part of the reduction in take-home pay is offset by a reduction in taxes deducted and taxes owed.

  • If you are a regular full-time employee, you may join the plan after you complete three months of continuous service. You must join one of the CBS pension plans after you complete two years of continuous service. Employees represented by one of the Participating Unions join the DB plan.

  • If you are other than regular full-time (that is if you are a term employee, part-time or casual):

    • In all provinces except Manitoba, you may join the plan of your choice when you have completed two years of employment and have worked 700  hours (or have earned at least 35% of the Years' Maximum Pensionable Earnings - or YMPE) in each of two consecutive calendar years.

    • In Manitoba, you may join one of the pension plans after three months or the first of any month thereafter. If you've earned at least 25% of the YMPE in each of two consecutive calendar years, you must join a pension plan after two years.

    • Employees represented by one of the Participating Unions join the DB plan.

  • The earlier you join the DB plan, the better your pension will be. You and CBS begin making contributions to your plan as soon as you join, so the longer you belong to the plan, the more money both you and CBS will contribute. Once you have contributed to the DB plan for two years, you are guaranteed to receive at least 120% of your contributions, plus interest. This percentage increases the longer you are with CBS (to a maximum of 200% of your contributions plus interest).

  • Joining the DB plan will reduce your RRSP contribution room. On the other hand, if you don't join a pension plan you are paying the full cost of saving for your retirement. Once you join a pension plan, CBS will contribute 7.0% of your pensionable earnings toward this cost.

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How do I join?
  • Shortly before you're eligible to join, a Human Resources Representative will contact you, and provide you with an enrolment form. You'll use this form to provide personal details and to designate a beneficiary to receive benefits from the plan in case of your death.

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If I join the DB plan, can I later decide to switch to the Defined Contribution plan?
  • In general, no. Once you have joined the DB plan, you remain in the plan as long as you are employed by CBS. The only exception to this rule is if you joined the DB plan as a member of a Participating Union and later transfer to a position at CBS where you are no longer a member of any union.

  • If you have a choice to join either the DB or the DC plan, it is important for you to read this web site and the descriptive booklets carefully to ensure that you make the decision that is right for you.

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Should I designate a beneficiary?
  • Yes, when you join the plan you should complete the beneficiary designation section of the enrolment form, for benefits payable in case of your death

  • Provincial pension laws require that, for certain periods of service, if you have a spouse, the spouse must be the designated beneficiary. In Ontario and British Columbia, you and your spouse must sign a form waiving this right if you want to name someone else.

  • If you don't have an eligible spouse, you may name anyone as your beneficiary. If you don't designate a beneficiary, on your death, the total value of your plan entitlement would be paid in cash to your estate.

  • If you do have an eligible spouse you can still name a contingent beneficiary, to receive any death benefits in the event that your spouse is not living (or is no longer eligible) at the time of your death.

  • Under current income tax law, your eligible surviving spouse may transfer the benefit tax-free to another retirement plan.


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