Ford laid off about 120 Canadians recently. Are you in that group? What are your pension options?
Pension Solutions Canada has helped dozens of laid off or retiring auto workers. I will analyze and advise you on each of your pension options. We will coordinate documents and establish your pension either thru a copycat pension or the commuted value.
Ford offers you 3 choices:
a. Company pension: immediate or delayed
b. Commuted Value [CV]: “Take the cash.”
c. Copycat pension: “purchase of a life annuity”
What do these all look like? Let’s have a look.
1. Take The Ford Pension
Your buddy or your uncle etc. took this option. Work for your 30 + years, retire and the company pension pays you until you crock. Then your spouse or partner receives 66 2/3 of that amount until he/she dies. That’s it, that’s all. There is no estate value. There is no ‘final payout’ to your kids, etc. The key question: on your 80th birthday will the pension still be fully funded?
2. Commuted Value (CV)
Some people refer to this as: “Take the cash.” Your commuted value is shown on your page “Estimated Retirement Entitlements…”. This is a large amount of money, likely $500k or more, maybe over a million. Please note that commuted values have dropped with the rise in interest rates. If you know a fellow employee who retire in 2020, their CV was much higher. I discuss this on my YouTube Channel, pensionsolutionscanada.com, if you want some background. In any case, this money comes to you, less a big tax hit [due to the stupid legislation called Maximum Transfer Value]. Most of the money comes in a LIRA [locked-in retirement account], the rest as cash less tax. You can hide the cash in an RRSP to avoid the tax, if you have any room. Now what? Ok, so you have a huge investment account, who manages that? I do. I manage money with investment funds, diversified, safe and growing. Ask me.
3. Copycat Pension (aka Life Annuity)
What the heck is that? Ford retirees have not used this option until recently although the copycat pension has been allowed by legislation for years. Picture this: you are receiving a monthly deposit to your bank account from your pension, except that, instead of that money coming from Ford, your pension comes from a Canadian financial institution, ex. Sun Life. Think about it, your pension will come, identically, from a Canadian financial institution, rather than a foreign manufacturer. Sound reliable? I think so. One point: the payments for life must be identical to the company pension according to CRA guidelines. BTW, again, you don’t pay us, Sun Life or whichever company you choose pays us.
That’s all for now. There is a rush of pension work coming in so connect with us right away to discuss your pension options.
Let’s take a look at your Ford pension to make sure you’re maximizing your pension amount.
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Ford Motors Severance Pay in Canada
In Canada, non-unionized employees (including full-time, part-time, and hourly) at Ford can get up to 24 months of severance pay when they are fired or laid off from their job. Senior executives and non-unionized workers at Ford are entitled to the full amount of severance pay when they lose their positions as a result of company downsizing or restructuring.
About Ford
Ford Motor Co. is a U.S.-based automaker that builds trucks, sport utility vehicles (SUVs), commercial vans, and cars. The company was founded in 1903 and employs approximately 182,000 people globally.
