• Eligibility/Participation

    Who is eligible to join and when?
    As of January 1, 2015, Management as well as Administrative and Technical Support (AT&S) employees must join the plan immediately upon being hired.

    OR

    As of January 1, 2014, Management as well as Administrative and Technical Support (AT&S) employees must join the plan upon being transferred from another class of employees participating in another Company-sponsored pension plan other than a defined benefit pension plan.

    Can I opt out?
    No, you cannot. Participation is mandatory.

  • Contributions

    Am I required to contribute to the plan?
    Yes, you are required to make minimum contributions of at least 3% of your base salary. Base salary excludes overtime, premium payments, bonuses, profit sharing, and other incentive compensation.

    How much can I contribute?
    To see how much you can contribute, follow the link that applies to you:
    Contribution percentages for all employees excluding Senior Management
    Contribution percentages for Senior Management

    How much does Air Canada contribute?
    Air Canada matches your contributions to the DC Plan, dollar for dollar.

    How and when can I change my contribution rate?
    You can change your regular contribution rate to the DC Plan any time that you are logged in to your account. The change will take effect for the next pay period.

    Can I withdraw my contributions?
    No, you cannot withdraw your regular contributions or Air Canada's matching contributions from the DC Plan before termination of employment or retirement, because these contributions are locked in by law until then. "Locked in" means that the money must be used to provide retirement income.

    How much should I contribute?
    You may wish to contribute the maximum amount, if you:

    • are not already saving for retirement elsewhere
    • do not have outstanding credit card or other high interest debt that you wish to repay first
    • can afford higher contributions
    • want to increase your future financial security
    • want to pay less income tax (that is, reduce your taxable income by making more before-tax contributions).

    Is there a maximum on contributions?
    The contributions you and Air Canada make to the DC Plan are subject to a limit set by the Income Tax Act. In general, people earning more than $200,000 in a year are likely to reach the contribution limit. For information on contribution limits, please visit the Canada Revenue Agency website at www.cra-arc.gc.ca.

    Is there a limit on how long I can contribute?
    You will automatically stop contributing once you have 35 years of continuous service, including allowable service in another Company-sponsored pension plan.

    Can I transfer my other savings into the DC Plan?
    You are not permitted to make transfers into the DC Plan, but you may transfer other savings into the Air Canada Group RRSP (GRSP).

    Where do the contributions go?
    Your contributions and Air Canada's matching contributions are deposited directly into your DC account at Manulife. Note that if you contribute to the GRSP, you will have one account for the DC Plan and another for the GRSP.

  • Investments

    Who decides how the contributions will be invested?
    You decide how your contributions and Air Canada's contributions will be invested.

    What are my investment options?
    You are able to choose from a variety of investment funds offering varying levels of risk and potential for return. Generally speaking, the higher the risk, the greater potential for higher return there is over the long term.

    You can choose an Air Canada ready-made portfolio suited to your investor style or you can build your own portfolio. (First, confirm your style using either the Investor Strategy Worksheet from your enrolment kit or the Steps Retirement Program® on Manulife’s secure plan member website.)

    Your fund options range from a Money Market Fund—a conservative fund that offers little risk, but also a potential of low return in the long run—to various Equity Funds that carry high risks but offer potential for high returns over the long run.

    Check out the funds to learn more.

    How does an investment fund work?
    An investment fund holds a number of different securities such as stocks and bonds. Your contributions purchase units of a particular fund you have chosen. As the values of the underlying securities in the fund change, the unit value of the fund will increase or decrease accordingly.

    What should I consider when choosing investments?
    It is important that you choose the right investment funds, taking into account your situation and investment horizon. You should therefore consider:

    • your investment objectives,
    • your tolerance for risk, and
    • how much time remains before you plan to retire or actually use the money in your account.

    How will I know where to invest?
    The Steps Retirement Program® makes it easy: After you identify where you want to be financially during retirement in Step 1, go on to Step 2, How do I get there?

    Use the Investor Strategy Worksheet (also in your enrolment kit and available separately in Manulife’s secure plan member website) to determine your investor style, that is, how much investment risk you prefer. Selecting funds that you feel comfortable with will be easier once you know whether you are a conservative, moderate or aggressive investor.

    You can also review the fund manager information on Manulife’s secure plan member website.

    Manulife's Financial Education Specialists can also help you select and review your investment options. You can reach a Financial Education Specialist from Monday to Friday, 9 a.m. to 5 p.m. ET, at 1 888 727-7766.

    What happens if I do not provide investment direction?
    If you do not provide investment direction, contributions will be directed to the plan default investment option – the Moderate Target Date Portfolio (selected based on your retirement age of 65) until you provide further instructions. You can change your investment instructions at any time.

    Who manages the investment funds?
    Manulife is responsible for the plan's day-to-day administration and for the management of many funds offered. Manulife also works in partnership with institutional portfolio managers, such as Sprucegrove. These firms pick bonds, stocks and other assets to buy or sell, to ensure that you receive the best investment returns for the funds they offer.

    How do I change my investments?
    You can access your account online, or call 1 855 855-0785, Option 3, to make changes to your investments.

    Is there a fee for making changes to my investments?
    You can make changes to your investments as often as you want, free of charge, either online or by phone. You are also allowed four fund transfers each year by submitting a form by mail. For additional paper-based fund transfers in the same year, a $25 charge applies.

    Are there any fees?
    Administration fees cover the various costs associated with the operations of the DC Plan, including record-keeping, materials and services such as the statements, bulletins, the call centre and secure website. Air Canada pays all administration fees for the DC Plan, that is, $80 per plan member each year.

    There are no administration fees for the GRSP.

    As an investor, you also pay investment management fees (IMFs) under both the DC Plan and the GRSP. These IMFs are deducted from the funds before unit values are calculated. They are expressed as an annual percentage of the assets you hold in the funds. Each fund has its own IMF that may be updated from time to time.

    How much are the investment management fees (IMFs)?
    Note that fees under the DC Plan and the GRSP are generally lower than you would pay with a typical personal RRSP offered to individual investors by financial institutions. Click here to log in to your account and see the IMFs currently applied to your plan.

    What are the risks involved with different types of investments?
    There is always a certain amount of risk involved in investing. Read about risk and the importance of a diversified portfolio as you learn more about retirement planning.

  • Income Taxes

    How does the DC Plan help me reduce the income tax I pay?
    You do not pay income taxes on contributions you make to the DC Plan because these amounts are deducted from your paycheque before income taxes are calculated. This results in an immediate tax saving for you, as your income tax is calculated on a smaller amount. Also, you do not pay income taxes on Air Canada's matching contributions.

    Your account will grow tax-sheltered until you withdraw assets at termination of employment or retirement. So you do not pay any income taxes on the interest or investment earnings you make.

    How does the DC Plan affect my RRSP deduction limit?
    The amount you are allowed to contribute to an RRSP is affected by your participation in a registered pension plan like the DC Plan. When you contribute to a DC Plan, you have reduced RRSP deduction room.

    The total amount of contributions that you and Air Canada make to your DC account during a tax year is equal to your Pension Adjustment (PA), shown on your T4 slip (and Relevé 1 for Quebec residents). Your PA reduces the amount you can contribute to an RRSP in the following calendar year. If you contribute to the GRSP, you will also have less RRSP deduction room available.

    How will I know the amount of contributions to report on my tax return?
    The amount to report on your tax return will appear on your T4 slip (and Relevé 1 for Quebec residents).

    How much tax will I pay when I use the money during retirement?
    The money you withdraw from a Life Income Fund (LIF) or receive as a life annuity counts as taxable income. The tax rate or tax bracket that will apply will depend on your total retirement income in the year during which you make the withdrawal or receive the monthly pension payments.

  • Retirement or Termination of Employment

    What benefits do I receive?
    Upon retirement or termination of employment, you receive your entire DC account— including Air Canada's matching contributions and all investment earnings. If you have more than two years of service, the assets in your DC account are locked in; that is, the money cannot be taken as cash. It must be used to provide your retirement income once you have retired. See locked-in options below.

    What locked-in options are available to me?
    When you retire, you can choose one or a combination of the following tax-sheltered options for your locked-in assets:

    Transfer to a locked-in RRSP:
    A locked-in RRSP is an investment account for funds that must be used to provide retirement income, such as the money from your DC account. It will grow tax free until you withdraw the proceeds to purchase retirement income. You are not allowed to withdraw directly from a locked-in RRSP; you must convert it to a life income fund (LIF) or use the proceeds to purchase a life annuity before the end of the calendar year in which you reach age 71.

    Transfer to a life income fund (LIF):
    A LIF is an account similar to an RRSP that allows you to make withdrawals each year within specified minimum and maximum amounts. You may convert funds remaining in a LIF to an annuity at any time.

    Buy an annuity from an insurance company:
    An annuity is a pension contract that provides guaranteed monthly payments for your lifetime in exchange for a lump-sum payment called a premium. Depending on the type of annuity you buy, it may provide spousal survivor benefits. It may also be indexed for cost of living increases.

    What cash options are available to me?
    If the value of your account is less than 20% of the Year’s Maximum Pensionable Earnings (YMPE) at the time of termination, you can choose to withdraw the value of your account in cash, less applicable withholding taxes.

  • Leave of Absence

    Do I continue contributing to the DC Plan?
    No, however, in the case of a parental, childcare, compassionate care or adoption leave, you will have the opportunity to “pay back” (catch up) your contributions to the DC Plan upon your return to work. If you elect to do so, Air Canada will then match your payback (catch-up) contributions.

  • Disability

    Do I continue contributing to the DC Plan?
    During a short-term disability leave (Sick Leave), you continue to contribute, and Air Canada continues to match your regular contributions.

    While you receive benefits under Air Canada's Group Disability Income Plan or workers’ compensation benefits, your contributions stop.

    If I stop contributing, does Air Canada continue contributing?
    Air Canada matches your regular contributions during a short-term disability leave (Sick Leave), and continues to contribute 3% of your base salary before disability to your DC account while you receive benefits under Air Canada's Group Disability Income Plan or under workers’ compensation.

    Can I continue contributing to the DC Plan while on disability or workers’ compensation?
    No, however, during the first 17 weeks of a sick leave or in the case of workers’ compensation leave, you will have the opportunity to pay back contributions to the DC Plan upon your return to work. If you choose to do so, Air Canada will then match your payback contributions.

  • Divorce or Separation

    Is my former spouse/partner entitled to my assets in the DC Plan?
    Your former spouse or partner may be entitled to some portion of your DC account as per a court order. You should consult a lawyer to review your personal circumstances.

  • Death

    What benefits are payable?
    If you die before retirement, your entire DC account, including Air Canada's matching contributions and all investment earnings thereof are payable.

    If you die during retirement, benefits payable will depend on the retirement income arrangements you chose upon retirement.

    Who receives benefits upon my death?
    Your spouse/common-law partner receives the death benefits payable under the DC Plan.

    If you do not have a spouse/common-law partner, the benefits are payable to your designated beneficiary. If you have not designated a beneficiary, benefits are payable to your estate.

    What is an irrevocable beneficiary?
    If you designate a beneficiary as "irrevocable," you may not change this designation, or withdraw or transfer funds without the written consent of the irrevocable beneficiary.

    If you live in Quebec, the designation of your spouse/partner is automatically considered irrevocable, unless you state otherwise in writing when you make the designation.

    Can I choose a minor as my beneficiary?
    Yes, except in Quebec, you may name a trustee to receive any benefits owed to your minor beneficiary. In Quebec, any benefits owed to a minor beneficiary will be paid in trust to the minor's tutor.

    What are the payment options?
    The payment options vary, depending on whom the benefit is payable to, as follows:

    Spouse/partner
    If you have less than two years of service:
    - Receive your account balance in a lump-sum payment, less applicable withholding taxes,
    - Transfer your account balance on a tax-sheltered basis to a retirement income vehicle, such as an RRSP, or
    - Leave the money in the DC account until he/she reaches age 71.

    If you have more than two years of service:
    - Transfer your account balance to another registered pension plan or to a locked-in retirement vehicle,
    - Purchase an annuity, or
    - Leave the money in the DC account until he/she reaches age 71.

    Beneficiary(ies)/estate
    If you do not have a spouse/common-law partner at the time of your death, your designated beneficiary(ies) or your estate, as applicable, will receive your DC account balance in a lump-sum payment, less applicable withholding taxes.

    How is my money invested after my death?
    If you die while you are an employee or before transferring your account balance (after retiring or leaving Air Canada), upon notification of your death, Manulife will invest your account assets in a daily interest account.

  • Enroll in the program

    This section applies only to:
    • Management and ATS employees hired since January 1, 2005,
    • Management and ATS employees hired before January 1, 2005, who have elected to join the DC Plan, and
    • Employees transferred from another class of employees participating in another Company-sponsored pension plan other than a defined benefit pension plan.

    Enrolling is quick and easy. Before you begin...

    Refer to your Enrolment Guide
    This guide provides step-by-step instructions on enrolling in the plan. You will be prompted to enter your policy number(s) and access code(s) to begin the enrolment process.

    While you are enrolling online, you will be prompted to:

    • Select the percentage level of your payroll deduction,
    • Print, sign, and forward your Beneficiary Confirmation to Manulife,
    • Take note of your customer number, and
    • Choose your Personal Identification Number (PIN) for access to the plan member secure site.

    Setting up a Spousal RRSP
    To start a spousal RRSP, you must complete three (3) forms:
    • A GRSP enrolment form,
    • A Pension Plan Option form to specify the RRSP contribution amounts to be deducted from your pay, and
    • An RRSP and Spousal RRSP Contribution Direction form to indicate how your contributions are to be split between you and your spouse.

    Once you have completed and signed the forms, send them to Manulife.

  • Forms to manage your account(s)

    The forms listed below will help you manage your account(s) with Manulife. You can download, print and complete the appropriate form(s). Be sure to sign each form and mail it to Manulife at the address that appears on it.

    • Transfer authorization form – transfer assets to your GRSP with Manulife.
    • Change form – modify your personal information.
    • Lump-sum deposit form – make a lump-sum contribution to your GRSP.
    • Spousal contribution direction form – tell Manulife how much money to direct to your spousal RRSP.
    • GRSP enrolment form – set up a spousal RRSP.

    Members of the Air Canada DC Plan only:
    Application form to pay back contributions in the Pension Plan – request to pay back contributions to the Pension Plan following Pregnancy, Child Care, Adoption, and Compassionate Care Leaves.