Are Copycat Annuity Payments For Life?

Let’s talk about the concept of ‘pension for life’. What does getting ‘payments for life’ actually mean?

I had a phone call yesterday from a member. She said: “I want to look at the copycat but I’m afraid of running out of money cause my mom and dad both are still alive in their late 80s so I might outlive the money.”

So, let’s clear up that misconception.

Your employer pension pays you for life. Plus, if you are married or have a partner, the employer pension pays as long as he/she is alive.

In other words, this is a pension for life.

Now, the CRA dictates that a copycat annuity must be the same as your employer pension. It must pay you for life. Same thing. Plus, the Canadian insurance company must match your company pension dollar for dollar.

So, if you take the copycat annuity you also get payments for the rest of your life just the same as your employer pension. Period. Full stop. You’ll never “run out” of money!

Why bother going to a Canadian insurance company? Three reasons:

  1. Financial stability – all the Canadian insurance companies that we deal with at Pension Solutions Canada are financially solid and based in Canada. They have a century-long history of operating in the financial industry and that is their business. They don’t make cars or trucks or refrigerators, they manage finances.
  2. All our supplier insurers are 100% Canadian. They are not moving. They are not “amalgamating” back to a foreign head office or going bankrupt like many companies are during these uncertain economic times. Also, if that were to ever happen, there are protections in place to help you which are far better than what you get if your employer goes bankrupt.
  3. You might receive a substantial lump sum of surplus cash. For example, we have paid out over $70,000 to one lucky employee on retirement.

Connect with us to see if the copycat solution will work for you. Because of the changes coming to pension calculations on December 1, 2020, now is the time to take action!

I’m happy to discuss with you one on one or in a group. Call our office at 1-888-554-6661 to book a free phone consultation to analyze and discuss your pension options. My assistant Kennedie will be happy to arrange a time.

Please have your pension estimate statements or your final offer statements ready.

Bruce Youngblud, CFP, CIM

Bruce Youngblud is a pension expert in southern Ontario who specializes in helping individuals prepare for retirement. He advises clients on copycat annuities, pension plans, commuted value, tax planning, and estate planning.

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