Although Leslie Sanders has been a member of the CSS Pension Plan for 46 years, she only contributed to the Plan for five years between 1977 and 1982.
Leslie decided to leave her funds in the Plan after leaving her employment with Federated Co-operatives Limited (FCL) in Saskatoon in 1982. She then became an “inactive member,” or a member of the CSS Pension Plan who holds funds in a CSS Pension Plan account but no longer works for a participating employer or makes pension contributions.
Even though she only contributed for a handful of years, every dollar she contributed (matched by her employer) would go on to make a significant difference in her retirement outcome.
Originally from a small farming community in Manitoba, Leslie completed her home economics degree at the University of Manitoba and eventually made the move to Saskatoon in 1976 after accepting a home economics position with FCL.
At the time, she had the option to join the CSS Pension Plan as soon as she started working at FCL. Like many young people just starting out, she was hesitant to contribute a portion of her pay cheque toward a pension. One year later she decided that joining CSS would be in her best interest.
“To me, that’s a point to be made to young people is that the sooner you start saving, even in a small way, the more ramifications down the line,” she said.
When she left FCL in 1982 to pursue contract work, she held just over $13,300 in her CSS account. Today that balance has grown to over $485,000 after accumulating growth in the CSS Balanced Fund for another 41 years.*
“That multiplier over time [compound returns] is so significant,” she says. “There was never a thought to taking it out, to changing it, because it was kind of the foundation for the rest of the financial planning that I did for myself and my family.”
"There was never a thought to taking it out, because it was kind of the foundation for the rest of the financial planning that I did for myself and my family."
Choosing VB Payments
Although Leslie has been retired from the workforce for several years, she is only now converting her funds in the CSS Pension Plan into a retirement income – and only because she has to.
Under pension legislation, you're required to convert your pension funds into a retirement income by the end of the year you turn 71 years old.
“I’m fortunate that I have not opted to touch those funds up until I was forced to,” she said.
Leslie’s investments outside of the Plan that have supported her retirement in the interim, including RRSPs and a stock portfolio.
Now with CSS, she has the option to set up a monthly pension (similar to an annuity), VB Payments or a combination of the two. Or she has the flexibility to take her funds out of the CSS Pension Plan to set up retirement income payments through her credit union or bank.
Leslie chose the VB Payment option with CSS because of the flexibility it provides to take either a monthly or annual minimum withdrawal and still have the option to change it at any time.
She can also remain invested in the Plan’s investment funds to give her funds a chance to grow.
Leslie and her husband have been fortunate enough that those funds are not necessary for their day-to-day life, but she points out that the future can be unpredictable.
“We don’t know what tomorrow brings. Right now, we’re in our own home, we’re totally independent. We have the world by the tail,” she says. “That financial picture can change very dramatically, for anyone, but especially as you age. So this way, this nest egg, this pool of funds can sit. It can grow. It is well managed. It’s there. I’ve opted to have ultimate flexibility to take those funds out when I need them.”
The flexibility CSS provides to customize her plan to fit her own needs is a key value-add of her membership.
“For me it was that conservative base. The simplicity of management in that you could vary percentages [between the Plan’s four investment funds] but you were not needing to choose or actively manage any of the exposures,” she says.
She also emphasized the benefit the Plan’s lower investment fees have had on her portfolio over the long term. The 2022 Balanced Fund management expense ratio (MER) is 0.52%.
The impact of fees can easily be overlooked, but even slight differences in fees can have a significant impact on a pensioner’s account balance.
“To be perfectly frank, the cost of management for Co-op Superannuation, it is easy to overlook, because you think ‘oh what’s 1% or 2% in fees’, and in some cases it’s even higher, but even one or two percentage points over the life of a retirement fund is huge.”
Not alone
Although retirement can be an intimidating milestone for many, Leslie says she never felt discouraged. Rather, she looked forward to retirement because of the options it provided to keep busy with contract work, her hobbies and family.
She realizes this may not be the case for many people, especially during the past three years with challenges brought forth by the pandemic and the loss that many experienced.
“I also think that in retirement, it tends to be a bit of a head game. And I think sometimes the anxiety, sometimes it can be financial, but often it is in more of almost a sense of direction or usefulness or purpose in a day,” she explains. “I have been very lucky in that way, in that I have transitioned into work that is totally in my control.”
An avid green thumb, Leslie has enjoyed gardening. At the time of writing, she was working on a planting plan for her friend’s summer uPick business.
“That takes anxiety away for me. Anxiety isn’t always about the money. Sometimes it’s about what a day looks like,” she said.
Along with gardening, she and her husband plan to continue keeping busy with travel, and spending time with their grandchildren is “pretty top of the mark.”
“If I’d known, I would have had grandchildren before children,” she jokes. “We are very fortunate to have our daughter who has two children.”
She also has a son who lives in Vancouver and notes that as long as they have their health they will continue to travel. A two-week long golfing trip to the Maritimes is next on the agenda.
“This is a bucket-list trip. We’ve always wanted to do these courses,” she says.
As she continues her retirement journey, Leslie will not be alone when it comes to making future decisions about her funds. She will continue to have access to the support and resources offered by the CSS Pension Plan, including customized assistance from the Plan’s Retirement and Pension Advisors, myCSSPEN® for members portal, online tools and calculators and more.
Visit www.csspension.com for more information on how CSS can help you navigate your options and make decisions that fit your life.
Article from the Spring/Summer 2023 issue of TimeWise.
