retirement income funds by rickman1

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									                        UWO Retirement Income Funds

UNIVERSITY OF WESTERN ONTARIO                              payments. Effective at any month end, the annuitant
RETIREMENT INCOME FUNDS                                    may change the allocation of accumulated funds
The University, in partnership with Pacific & Western      among the investment choices available and may
eTrust Corporation and Northern Trust Company of           change the investment choice to be used to fund
Canada, can establish RRIFs, LIFs and LRIFs for            benefit payments. As of the commencement of the
former members of the pension plans using a similar        UWO RIFs, the investment choices are:
investment selection as is offered under the Pension
Plans. The following is a summary of the products                          Money Market Fund
and services available:                                                  Target Date Funds (5)
                                                                         Canadian Bond Fund
ELIGIBLE ANNUITANTS                                                      Long Term Bond Fund
The University, on behalf of Pacific & Western’s eTrust                  Canadian Equity Fund
of Canada Inc., will accept transfers into The                     US Equity Hedged Fund ($Canadian)
University of Western Ontario Retirement Income                     US Equity Unhedged Fund ($US)
Funds (“UWO RIFs”) for members and former
members of The University of Western Ontario               As alternative investment choices are approved to
pension plans. In addition, surviving spouses and          meet income tax regulations, they will be added,
former spouses of members of the University’s              subject to the approval of the University Pension
pension plans are eligible to apply for retirement         Boards.
income funds, provided the funds allocated represent
pension entitlements earned under and traceable to         In the absence of specific written direction from the
The University of Western Ontario Pension Plans.           annuitant, the assets held in the UWO RIFs will be
                                                           invested in the Money Market Fund and benefit
Funds may be transferred directly from the University      payments will be made from the Money Market Fund.
pension plans or from a Registered Retirement
Savings Plan (RRSP), a Locked-In Retirement                Transactions including transfers of funds, changes in
Account (LIRA), a Registered Retirement Income             investment allocation and benefit payments will be
Fund (RRIF), a Life Income Fund (LIF), or a Locked-In      made based on the unit value of each investment fund
Retirement Income Fund (LRIF), provided the funds          effective the end of the month following the receipt of
allocated represent entitlements earned under and          the annuitant’s instructions for these transactions.
traceable to The University of Western Ontario             All instructions for transactions must be submitted to
Pension Plans.                                             The University by the 25th of any month to be
                                                           effective for the end of that month.
An individual whose application for participation is
accepted by the University is referred to throughout       Investment income from money market securities,
these Program Guidelines as the “annuitant”.               coupon income from bonds, dividends, capital gains
                                                           and losses and other income generated by the
FUNDS HELD IN TRUST                                        investments will be calculated monthly and be
All funds transferred into the UWO RIFs and all            reflected by the change in unit value of the respective
investment income generated by those funds will be         investment choice. Investment expenses including
held in trust for the annuitant by The Northern Trust      external manager fees and custodian fees will reduce
Company, Canada.                                           the unit value of each investment choice as these
                                                           expenses are incurred. A dividend, representing the
INVESTMENTS                                                net capital gains and income on the investments, will
Funds transferred to the UWO RIFs will be invested         be payable annually and will be used to purchase
and re-invested as directed by the annuitant among         additional units of the investment choice.
the investment choices designed, managed and
offered by the University Pension Boards for the           All transactions will occur in accordance with the
purposes of the UWO RIFs. Purchases and sales of           terms of the trust documents associated with each
investments will be effective the last business day of     investment choice.
each month. Annuitants may designate one or more
investment choice which will fund periodic benefit




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                         UWO Retirement Income Funds

PAYMENTS TO ANNUITANTS                                  In the first year of establishment, no minimum
The investment in each annuitant’s retirement income    payment is required.
fund will be used to provide periodic income that must
begin on or before December 31 of the 2nd calendar      An annuitant may make a one-time irrevocable
year of the establishment of the annuitant’s UWO RIF.   election to use his or her Spouse’s age for purposes
For each calendar year, the annuitant must choose       of the calculation of minimum payments.
the level of payments, within the permitted minimum
and maximum limits established by law, and provide      MAXIMUM PAYMENTS
written instructions to the University regarding the    In addition to the Minimum Payment rules where the
level of payments chosen. Elected level of payments     annuitant holds a RIF to which locked-in assets were
will be effective upon the date the annuitant           transferred (a LIF or LRIF), the total payments
establishes the UWO RIF and must be confirmed           received by the annuitant in a taxation year must not
effective each January 1 subsequent to enrollment,      exceed the maximum payment defined by the Ontario
until revoked by subsequent written directions from     Pension Benefits Act and Regulations.
the annuitant. Payments will be made on a
monthly basis. Special lump sum payments
                                                     MINIMUM LEVEL OF LIF/RRIF/LRIF PAYMENTS
may also be made throughout the calendar
year, provided those payments will not cause
the maximum payment level, if applicable, to
be exceeded for the calendar year. Special
requests for lump sum payments must be
received by the 25th of any month and will be
effective the end of the month in which the
request is received.

If the annuitant fails to provide written
directions on the level of payments for any
taxation year, payments will be made based
on the minimum level required by the Income
Tax Act.

MINIMUM PAYMENTS
The Income Tax Act sets out minimum
annual payments to be made from registered
retirement income funds (which include LIFs
and LRIFs). Currently, the minimum
payments are defined by the age of the annuitant at       LIF PAYMENTS (LIFE INCOME FUND)
January 1st of the calendar year and the value of the     In the case of a LIF, the maximum payments are
annuitant’s RRIF/LRIF/LIF account balance at January      defined by age of the annuitant at January 1st of any
1st of that year.                                         calendar year and the value of the annuitant’s LIF
                                                                      account at January 1st of the year.
            MAXIMUM LEVEL OF LIF PAYMENTS
                                                                      The current schedule of minimum and
                                                                      maximum LIF payment restrictions are
                                                                      outlined here.

                                                                      There is no provision to elect the
                                                                      maximum payment to be based on the
                                                                      age of an annuitant’s Spouse.

                                                                      The maximum payment rates are revised
                                                                      annually based on interest rates and the
                                                                      formula contained in the Pension Benefits
                                                                      Act and Regulations. Further details

                                                     43
                        UWO Retirement Income Funds


regarding the calculation of the maximum payments          beneficiary is the annuitant’s Spouse, the account
for LIFs are contained in the LIF Supplement to the        balance in the UWO RIF may be transferred to
UWO RIF Declaration of trust.                              another RRIF, LIF, LRIF, RRSP or annuity without
                                                           immediate tax consequences. Alternatively, the
LRIF PAYMENTS (LOCKED-IN RETIREMENT                        Spouse may continue to receive payments under the
INCOME FUND)                                               UWO RIF. If the beneficiary is the “Estate”, the
In the case of a LRIF, the maximum payment for a           payment is subject to income tax in the hands of the
calendar year is generally based on the rate of return     annuitant and may also be subject to probate tax. If
earned by the annuitant’s LRIF account in the prior        other individuals are the beneficiary of the RRIF,
taxation year and the value of the annuitant’s LRIF        generally the annuitant’s estate will pay income tax on
account at the beginning of the year. For the first two    the death benefit. Some tax-free rollovers are
taxation years in which the LRIF is operating, the         permitted depending on the nature of the relationship
maximum payment is generally 6% of the LRIF                between the annuitant and beneficiary. Annuitants are
account balance at inception and on January 1 of the       advised to request independent tax advice on such
following year, respectively. Further details regarding    matters.
the calculation of the maximum payments for LRIFs
are contained in the LRIF Supplement to the UWO            Tax will be withheld on all lump sum payments that are
RIF declaration of trust.                                  not transferred to a RRIF, LIF, LRIF, RRSP or annuity
                                                           based on the following schedule:
In the first taxation year of a LIF or LRIF, the maximum
payment is based on the balance allocated to the fund      Payments to non-resident beneficiaries:               25%
at inception and prorated by the number of months the      Payments less than $5,000                             10%
LIF or LRIF is operating during the taxation year.         Payments $5,000 or more and less than $15,000         20%
                                                           Payments $15,000 or more                              30%
TAXATION OF PAYMENTS                                       Withholding tax varies for Quebec residents
All payments, both periodic and lump sum, are
payable to the annuitant and taxable in the year in        TERMINATION OF FUND BEFORE DEATH OF
which they are received. The payor, Northern Trust         ANNUITANT
Company, Canada, on behalf of Pacific and Western’s        An annuitant may elect to terminate his or her UWO
eTrust of Canada Inc., is required to withhold tax from    RIF, LIF or LRIF at any time prior to his or her death.
each periodic or lump sum payment and remit that tax       The annuitant is required to notify the University in
to Canada Customs and Revenue Agency (CCRA) on             writing by the 25th of any month for the termination to
a regular basis. Within 60 days of each year end, the      be effective at the end of the month in which the
annuitant will receive a T4RIF form indicating the         notification is received.
amount of payments made to the annuitant and the
amount of tax withheld from payments made in the           TERMINATION OF RRIF
previous taxation year. The annuitant is required to       If an annuitant wishes to terminate a UWO RRIF, he or
report all payments as taxable income for the taxation     she may do so by requesting a complete cash
year.                                                      payment of the balance of their account. Alternatively,
                                                           they may direct the balance of their account be
The annuitant must elect to have tax withheld on           transferred to a RRIF offered by another financial
regular payments. Prescribed tax forms must be             institution or to purchase an annuity. If the annuitant
completed in this regard.                                  has not attained age 69 at the time of termination, he
                                                           or she may choose to transfer the balance to an
Amounts that are transferred from the UWO RIF to a         RRSP with another financial institution.
RRIF, LIF, LRIF, RRSP or for the purchase of an
annuity held by another financial institution are not      TERMINATION OF A LIF
taxable and no tax will be withheld on these transfers.    If an annuitant wishes to terminate a LIF, he or she
                                                           may direct the balance of their account to a LIF, LRIF
Payments representing death benefits will be taxed         or annuity offered by another financial institution. If the
based on the nature of the relationship of the             annuitant has not attained age 69 at the time of
annuitant’s beneficiary to the annuitant. If the           termination, he or she may choose to transfer the




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                         UWO Retirement Income Funds

balance to a Locked-In Retirement Account (LIRA)               COMMUNICATIONS TO ANNUITANT
with another financial institution.                            The University and Pacific and Western’s eTrust of
                                                               Canada Inc. are committed to providing regular
By the end of the calendar year in which the annuitant         communication to all annuitants of UWO RIFs. Once
attains age 80, the balance of the LIF must be used to         a UWO RIF is established, an annuitant may inquire
purchase a life annuity.                                       and request updates of their account balance as
                                                               frequently as monthly from the Department of
TERMINATION OF A LRIF                                          Pensions and Benefits.
If an annuitant wishes to terminate a LRIF, he or she
may direct the balance of their account to a LRIF, LIF         Annually, a personal statement, updated plan
or annuity offered by another financial institution. If the    summary and investment details will be sent to all
annuitant has not attained age 69 at the time of               annuitants. The personal statements will be effective
termination, he or she may choose to transfer the              the end of each calendar year and will outline the
balance to a Locked-In Retirement Account (LIRA)               value of the UWO RIF, the performance of the
with another financial institution. There is no                investments and the transactions that occurred during
requirement to purchase an annuity with LRIF funds at          the calendar year. This annual communication will be
any age.                                                       sent to the annuitant within 90 days following the end
                                                               of each calendar year.
TERMINATION OF LIF OR LRIF DUE TO
SHORTENED LIFE EXPECTANCY                                      Since minimum and maximum payments will change
Funds in a LIF or LRIF may be payable to the                   each year, annuitants will also receive a
annuitant in a lump sum taxable cash payment if,               communication outlining their maximum and minimum
based on a physician’s statement and other                     payment restriction and will be asked to elect the level
documentation required by the Pension Benefits Act,            of payment for the next taxation year. If no election is
the annuitant is unlikely to live for more than two years      received by the annuitant within the time frame noted,
in the future.                                                 minimum payments will be made to the annuitant.
                                                               Monthly payments will remain in effect until a further
DEATH AND SURVIVOR ENTITLEMENTS                                written election is received by the University.
Upon the death of an annuitant, benefits will be
payable to the last named beneficiary that has been            In addition to these individualized statements,
filed by the annuitant in writing, subject to the              annuitants will receive regular newsletters and
requirements of the Pension Benefits Act.                      invitations to participate in information sessions and
                                                               educational workshops. Annuitants may wish to refer
If the beneficiary is the Spouse of the annuitant, the         to the University Retirement Plans website
spouse has the following options:                              (http://www.uwo.ca/penben/) for timely information on
                                                               investments. When an annuitant desires a personal
    1.   Receive a lump sum cash payment equal to              counseling session, they are invited to call the
         the account balance of the UWO RIF, less              department to set up an appointment with one of the
         withholding taxes.                                    department’s professional counsellors. Annuitants and
    2.   Continue to receive payments from the UWO             their spouses are entitled to inspect all trust
         RIF. Payments will be subject to only                 documents, custodian accounts, financial statements,
         minimum requirements of the Income Tax Act            and statutory filings. Copies of these documents may
         and not to maximum levels.                            be provided to an annuitant or an annuitant’s spouse
    3.   Transfer the account balance to a RRIF or             at a cost of $0.50 per page.
         annuity with another financial institution.
    4.   If the Spouse has not yet attained age 69,            POWERS OF THE UNIVERSITY AND PENSION
         transfer the balance in the UWO RRIF to an            BOARDS
         RRSP with another financial institution.              The University, through the Board of Governors, has
                                                               been appointed as an agent of Pacific and Western’s
If the beneficiary is a named individual other than the        eTrust of Canada Inc. to manage and administer all
annuitant’s Spouse, the payee will receive a cash              operational aspects of the UWO RIFs. The University
payment equal to the balance of the UWO RIF subject            has delegated this day-to-day responsibility to the
to the terms of the annuitant’s will.                          Department of Pensions and Benefits. The
                                                               investment choices available under the UWO RIFs are

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                         UWO Retirement Income Funds


designed, implemented and managed in accordance            These fees are in addition to expenses charged to
with policies set out by the Pension Board for             investment accounts on a monthly basis which
Academic Staff and Pension Board for Administrative        represent the investment management and custodian
Staff (Joint Pension Board).                               fees. Details of the investment management fees by
                                                           fund have been outlined in the first section of this
The University has the right to refuse applications for    report.
establishment of a UWO RIF unless all information
and forms are complete, so as to allow the registration    In addition to the administration fee and investment
of the retirement income fund with Canada Customs          management fees, an additional charge of .07% of
and Revenue Agency.                                        assets at the end of each quarter is payable to fund
                                                           fees charged by Pacific and Western’s eTrust of
The University has the right to terminate the UWO          Canada Inc.
RIFs, provided 90 days written notice is given to all
annuitants.                                                The annual administration fee will be re-assessed
                                                           each year as will the fee payable to Pacific and
POWERS OF PACIFIC AND WESTERN’S eTRUST                     Western’s eTrust of Canada Inc. Investment
OF CANADA INC.                                             management fees will change as the volume of assets
Pacific and Western’s eTrust of Canada Inc. is the         under management changes. Annuitants will be
trustee for all retirement income funds. Pacific &         notified regarding any changes to the overall fee
Western must exercise care, diligence and skill in         structure with at least 90 days advance notice before
carrying out its duties and responsibilities. Pacific &    they take affect.
Western has delegated the safe keeping of the assets
for the funds to The Northern Trust Company, Canada        YOUR DECISION
which acts as trustee for the UWO registered pension       The information contained in these Program
plans.                                                     Guidelines is intended as general information to
                                                           familiarize you with the UWO RIF and its operations,
Pacific and Western has the right to resign as trustee     and is subject to the specific provisions of the UWO
for the UWO RRIF, provided 90 days written notice is       RIF documentation and applicable legislation. You
given to all annuitants.                                   are encouraged to obtain your own independent
                                                           financial advice before making the decision to
ADMINISTRATION FEES                                        establish a UWO RIF.
All annuitants will be charged an annual administration
fee to cover record keeping, consulting fees, filing
fees, record keeping, transaction processing,
communications, counseling and education programs.
As of September 1, 2000, the annual administration
fee is $585 per annum, prorated for the number of
months an annuitant participated in the UWO RIF
during the year.




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