VARIABLE BENEFIT NEWSLETTER
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Get a jumpstart
on tax season
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Preparing for tax season starts now. With some additional planning and foresight, you’ll not only reduce stress come tax time, but possibly save some money, too!
Let’s explore some of the ways you can plan ahead to make the most of your return.
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Pension splitting allows retirees to allocate up to 50% of eligible pension income to their spouse or partner at tax time. When one partner has a lower income, this can reduce the couple’s overall tax burden, potentially lowering tax brackets, avoiding Old Age Security clawbacks, and increasing access to tax credits to boost after-tax retirement income.
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If you’re 65 or over with an income of less than $102,925 you can take advantage of the federal Age Amount tax credit. You could be eligible for up to $1,354 in tax savings, keeping more of your retirement funds in your pocket. Any unused portions may also be transferred to a spouse or partner.
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Health costs in retirement are already enough of a burden, so why not use them to help reduce your taxable income? You can claim a tax deduction for the portion of your medical expenses that exceeds the lesser of 3% of your net income or $2,834.
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If you’re retired, the first $2,000 of eligible pension income each year comes with a special tax break thanks to the federal Pension Income Amount. That means you could get up to $300 back in tax savings, plus a bit more from your province – an easy win at tax time.
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With the Variable Benefit, you can choose how much you withdraw and when.† That also means more control over your yearly income and, as a result, your tax bracket. Now is the perfect time to check where you’re at and adjust your income for the remainder of the year if necessary.
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To see which tax credits you may be eligible for based on your personal circumstances, talk to a qualified tax professional.
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*For members receiving Variable Benefit (VB) payments, pension splitting is only available starting in the year you turn 65.
**VB payments only qualify once you turn 65 or if payments are received due to the death of a spouse or partner.
†Minimum annual withdrawal is required starting at age 72.
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Have you submitted your Enduring Power of Attorney?
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An Enduring Power of Attorney (EPA) is a legal document that allows you to appoint someone to make financial and legal decisions on your behalf if you become mentally incapable. This can include managing your bank accounts, investments, and pension benefits.
Completing it and sharing it with SPP is an important step for ensuring your hard-earned savings go where you intend.
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What you need to know about your EPA
- Must be in writing, dated and signed by you (the grantor).
- Explicitly authorizes your attorney to manage financial and property matters and remain valid if you become incapacitated.
- Be properly witnessed, often by a lawyer or two independent adults, depending on your province’s laws.
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You can submit a copy to SPP by mail or email (please include your plan number) to ensure it is on file should it be required in the future.
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Take full advantage of your Variable Benefit
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You likely already know that Variable Benefit is a flexible way to collect your pension funds. Here are some details that can help you make the most of it.
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VB members can request monthly payments, one-time lump sum payments, or annual lump sum payments – either individually or in combination. All payments are deposited directly into their bank accounts.**
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You can request to move funds between the Balanced Fund and Diversified Funds at any time.†
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There’s no limit on the amount you can transfer into your Variable Benefit account from unlocked, registered savings funds.
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As a Variable Benefit member, you can convert your funds to an SPP Annuity at any time.
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A minimum annual withdrawal is required starting at age 72. You can elect to have the required withdrawal amount calculated based on your age or your spouse’s age.
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Payments are made by the 20th of each month. Any changes to the requested payment amount must be made by the 10th of the prior month.
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**One free change to monthly or lump sum payments may be requested in each calendar year. A $50 fee is charged for each subsequent change or additional lump sum payment within the year.
†Transfers are processed on the first of each month. Your first two inter-fund transfers in the calendar year are free. A $50 fee applies to subsequent transfers in the year.
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Updates from your SPP team
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Jeannette Mesalucha, Retirement Officer
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We would like to welcome Jeannette Mesalucha as the Retirement Officer in our Pension Service department. She is originally from the Philippines and has been living in Canada since 2018 with her husband and child.
Jeannette has a strong background in customer service. She brings with her valuable experience in the banking industry, which has equipped her with the skills to make a meaningful contribution to Saskatchewan Pension Plan as a Retirement Officer. She’s passionate about helping others and takes pride in offering a genuine, people-first approach to all SPP members and staff.
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Your pension at your fingertips
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Sign up for MySPP to keep track of your progress and review your contact information to ensure it’s accurate and up-to-date.
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