Defined Benefit Pension Plans (DBPP)
You can add multiple defined benefit pension plans (DBPPs) to your projections as shown below.
In this article:
Add a new DBPP on the Income page
Select Scenario Setup -> Income.
Click Add Pension to add a pension. (You can add multiple pensions and each will be automatically saved once the data entries for each row in the Pensions table have been completed. )
Enter the values for the first pension. Note that you can name the pension, choose to prorate the first year's amount based on the client's birth date, enter the percentage benefit allocated to a surviving spouse, and choose whether to index this pension. Pensions are indexed from the Start Age of the pension, regardless of whether this is prior to the first year of the projections or in a later year.
The Start Age should be set as the age that the client will start receiving the pension in the future (if they haven't yet started receiving it) or the client's age as of the first year of the projection (if they've already started receiving it).
If the Start Age is less than 65, then Snap will use the Before Age 65 section for the bridge benefit portion of the pension. If the pension starts at or after age 65, the amount under Before Age 65 will be disregarded.
If you select Yes for the Prorate column, this means that the first year of the pension will be prorated to start after the individual's birthdate.
No Bridge Benefit
If there is no bridge benefit, you should enter the regular pension amount in both the Before and After Age 65 columns.
With a Bridge Benefit
If there is a bridge benefit, enter the sum of the regular pension and the bridge benefit as the amount Before Age 65, and enter the regular pension as the amount at Age 65 and After.
From age 65 onwards, the indexing percentage for Age 65 and After is used in the calculation for the pension amount. The Before Age 65 indexing percentage is only used up to age 65. We don’t apply the Age 65 and After indexing rate all the way from the start.
Option to edit the pension on the Planning page
On the Planning page, the pension has its own column with editable annual amounts. Simply click the value in the year where you want to make a change, then use the pop-up window to make your edits. This may be helpful to prorate a pension to a specific date of the year, rather than to the client's birthday.
Changes that you make on the Planning page will be highlighted in yellow to indicate a manual override of the information entered under Scenario Setup -> Income -> Pensions (DBPP).
To reset the values to those specified under Scenario Setup -> Income -> Pensions (DBPP), you'll need to clear the overrides on the Planning page.
Enter contributions towards the DBPP if applicable
If you also wish to account for contributions made towards the client's DBPP you can do this as shown here.
Enter the contribution as an expense on the Planning page. Create a new negative income column for pension contributions under Scenario Setup -> Income. This is classified as Taxable because it will reduce the client's taxable income. You can enter the ages for which this expense is applicable. Leaving the From Age blank will start the expense in the first year of the projections.
Under Taxable Income Details on the Planning page, you'll see a reduction in the client's Taxable Income by the pension contribution amount. To access this table, click the blue icon at the top of the Taxable Income column.
Add a pension adjustment if applicable
You may wish to enter a pension adjustment so that the RRSP contribution room is also reduced due to this DBPP contribution.
Click Scenario Setup -> Assets -> Capital Assets -> RRSP/RRIF to access this setting.
The client's annual RRSP contribution room will be reduced by this pension adjustment amount every year. The pension adjustment is automatically indexed with the General Inflation setting each year.