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Preparing for retirement
Whilst the CPSA Provincial Pension Fund is an outstanding pension fund, clergy
find themselves in a unique environment during the course of their ministry.
Unlike secular organizations, clergy are provided with significant non-monetary
benefits which have an impact on providing for retirement. Dioceses provide
housing, parishes pay for telephone, electricity and services, and vehicle
allowances are part of the ‘packages’ provided to clergy. The difficulty is that none
of these benefits are pensionable and accordingly when clergy reach retirement,
the loss of these benefits is significant.
Bearing the above in mind it is never too late to begin planning for your
retirement. There are some steps that every member of the pension fund should
take to ensure a seamless move into retirement.
It is essential for all members to form a relationship with a FAIS registered financial
planner. A FAIS registered advisor is registered with the Financial Services Board
and is licensed to provide financial advice to clients, both corporate and private.
The benefit of having a professional look at your overall financial well-being is that
shortfalls in your planning will be identified and remedial steps put into place to
correct the financial under-provision. Diocesan Administrators and the Principal
Officer are not licensed to provide advice to individuals and it cannot be stressed
enough the importance of finding the services of an advisor who you trust and
who can assist you in your financial planning.
One way of providing extra funding for your retirement is to make voluntary
contributions into the CPSA Provincial Pension Fund. This can be done through
your Diocesan Office. The benefit of making voluntary contributions into the
Fund is twofold. On the one hand the additional retirement funding put into the
pension fund will enhance the value of pension on date of retirement. The second
advantage is that, unlike Retirement Annuities, the voluntary contribution cost of
administration and investment is carried by the pension fund and to that end all
of the voluntary funds contributed are applied to retirement funding.
We see it time and time again. A member submits documentation to proceed
on retirement and the payout of the commutation is delayed because either
the member is not registered for tax or the member’s tax is not up to date. It
is vitally important that members are registered for tax and that this tax status
is maintained after retirement. Maintaining your tax status after retirement is
important because on the death of the member the seven times death benefit
becomes due and payable to the member’s beneficiaries. Significant delays are
often experienced by widows and the their children when the tax directive that
is applied for by the Administrators is not received. Registering and maintaining
you tax status is your responsibility and it is not possible for the Diocese or the
Administrator to obtain tax clearance.
Nomination of Beneficiary Forms
On the death of a member the Board of Trustees is required to disburse the death
benefit. Although it is only a guide to the wishes of the member, it does assist
the Trustees enormously to have the member’s expression of wish on file when
determining the distribution of the death benefit. These forms are available from
you Diocesan Secretary or from the Principal Officer.
Whilst having a will in place is not a requirement for the Pension Fund, having a
will in place does assist your spouse in winding up the estate. If an individual dies
without a will the estate is classified as ‘in testate’ and this status compounds time
taken to finalise an estate principally because the spouse needs to register with
the master of the High Court to be appointed the executor of the estate.
Other retirement planning
For many people retirement is an emotionally difficult time in their life. However
retirement doesn’t have to be emotionally painful. Retirement can be a wonderful
stage in anyone’s life if they prepare adequately for it. Whilst in no way being
definitive there are four significant challenges faced by retirees.
There is fear of the unknown. While many people have done financial planning to
prepare for their retirement years, very few take the time to think about, explore
and plan what they will actually do when they retire. Not knowing what to do
when retired, and facing a lack of structure can often be terrifying.
Other emotions are relief and a sense of freedom. When people have had their
whole lives structured by parents, teachers, having children, the church, the
thought of structuring their own time is wonderful. They look forward to doing
what they want to do, when they want to do it. They anticipate the flexibility they
will have when they’re on their ‘own clock,’ and find that very exciting. They may
use their new freedom to do the things they’ve dreamed of doing for years and
never had the time to things such as gardening, home repairs, golfing every day,
volunteering, traveling, etc.
A fourth emotion is depression. If people don’t develop interests and activities
that are relevant and meaningful to them, they may slip into depression as
increasing numbers of older people are doing. Hard driving women and especially
men whose identities are so closely connected to their careers tend to have an
especially difficult time in this transition if they haven’t cultivated other interests
and don’t seek help in doing so.
In this regard the Board of Trustees have embarked on a process of developing a
DVD aimed at providing guidance for clergy approaching retirement in the hope
that the transition from ministry to retirement can be as free of anxiety as possible.
We hope this guide has proven useful to you. Please contact the Principal Officer
or your Diocesan Secretary if you have any questions relating to the information
in this guide.