Ask Sandy: Pension questions

My employer has been taking pension from my standard pay but not on the pay I make when I work overtime. When I ask about it, she tells me not to worry about it and enjoy the extra money in my pay. Should she be paying pension on all of my wages?

Your employer should be paying pension on your overtime pay unless you earn more than CI$60,000 annually. You should note that contributions of 10 per cent are based on earnings and ‘earnings’ have a different meaning than ‘salary’. Earnings include overtime, commissions, bonuses (on amounts more than 20 per cent of your basic annual salary), tips, and fees – anything you earn on top of your base salary. Pension contributions are not calculated on any severance payments, retirement or long service recognition payments or health insurance premiums.

I understand I can voluntarily make contributions to my pension. Can I decide how it is invested and can I take it out whenever I want or need it?

Some pension plans do allow you to invest your Additional Voluntary Contributions in a more aggressive or more conservative fund. It is best to check with your pension provider to see what options they allow. Under the current Pension Laws, you are not allowed to withdraw AVC’s until you reach retirement age. Once you reach 60 years old, you can withdraw your AVC’s in a lump sum amount.

Sandy Chapell is the manager of pensions for The Fidelity Pension Plan. Sandy is a Chartered Accountant with more than 15 years experience in the pension administration and finance fields. She can be reached for questions at 949-7822 ext. 2206 or at [email protected].