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Old 01-03-2016, 03:08 PM
Hello World Hello World is offline
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Default Eom 3 Task 5 Career Employees Those age 20 and the 70% Rule

Ok so we are told 3 things,

1) The Chocolate Factory considers a career employee to be an employee who works with them for 35 years.
2) The total pension target for each career employee from the private Chocolate Factory pension plan and the CPP combined should be 70% of pensionable earnings
3) We have 3 employees age 20.

Since those age 20 are potentially here for longer than 35 years (they are here for 45 years) can their pensions exceed 70%?
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Old 01-03-2016, 03:49 PM
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Ok so we are told 3 things,

1) The Chocolate Factory considers a career employee to be an employee who works with them for 35 years.
2) The total pension target for each career employee from the private Chocolate Factory pension plan and the CPP combined should be 70% of pensionable earnings
3) We have 3 employees age 20.

Since those age 20 are potentially here for longer than 35 years (they are here for 45 years) can their pensions exceed 70%?
No
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Old 01-03-2016, 04:40 PM
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yellow pig yellow pig is offline
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No
what no, I interpreted that as the goal is to get to at least 70% before retirement
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Old 01-03-2016, 05:12 PM
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Ok One more question for you guys.

The Employee data spreadsheet under the contribution summary tab coulmn H reduces contributions by 25% for anyone under age 35. However I would delete that and only reduce contributions for the 20 yr olds. I would assume the rule of reducing it by 25% is only relevant to attain a 70% contribution (without going past that 70% mark) However, the 30 yr old's can still attain a 70% goal without reducing their contribution.
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Old 01-03-2016, 05:47 PM
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what no, I interpreted that as the goal is to get to at least 70% before retirement
Right, from a legal or regulation perspective I don't think there is anything keeping your from developing a RR greater than 70%. However, from the perspective of the employer, the goal is to be reasonably close to that. I wouldn't be modeling a 90% RR or anything...

"Your team's total target pension for each career employee from the private Chocolate Factory pension plan and CPP combined is 70% of pensionable earnings."
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