Glossary of terms
Annual income guarantee
This is the income you are entitled to receive annually (subject to legislated limits) once you enter the income phase, starting no earlier than age 65. It is calculated as 5% of the Benefit Base.
Benefit Base
This is a notional value made up of all of your contributions, adjusted for excess withdrawals and resets. The Benefit Base determines your annual income guarantee.
Current year's allowable income
This is the annual amount (in dollars) that you may take in income payments each year without any impact to the Benefit Base.
Excess withdrawal
Excess withdrawals include:
- Removal of assets covered by my money for life during the savings phase either by a cash withdrawal, a transfer to the portion of your plan not covered by my money for life, or a transfer to an external plan without my money for life coverage
- Any removal of assets covered by my money for life, above the current year’s allowable income, taken during the income phase
Excess withdrawal rule
For six months following an excess withdrawal, all contributions to my money for life other than payroll contributions will be suspended. If you make multiple excess withdrawals, the excess withdrawal rule will apply for six months following the last excess withdrawal.
Income phase
This is the period that begins at the earlier of: (a) the date you choose to begin receiving income payments from my money for life (no earlier than age 65) and, (b) the latest date you can legally request retirement income or default to annuity payments; this date is currently December 31 of the year that you turn age 71 (or the legislated maximum age).
Market value
This is the market value of the assets covered by my money for life at a given date, calculated by multiplying the number of fund units by the unit value of the fund determined at the last valuation date.
Reset
Every three years on your birthday, the Benefit Base is compared to the market value of your my money for life assets. If the market value is greater than the Benefit Base, the Benefit Base will be reset to the same amount as the market value locking in market gains. If the market value is less than the Benefit Base, then no change is made to the Benefit Base.
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