Transfer Value decimated

[Messerschmitt]

I assume everyone else's TV has been decimated since Jan/Feb? I regularly checked it and it peaked at over 300k. Since then it has been dropping and I checked today, and it's down to pretty much half.

I have no idea what these guys invest the TV in, but no market has dropped close to 50%. SP500 is only down 17% from the peak. My own investments have dropped less than 10% from the peak. Maybe they invest in penny stocks? /s (or is it /s?). Reading the website it also mentioned something that the TV is affected by current interest rates. So what does this exactly mean? As interest rates go up, the TV goes down? Interest rates are most likely going to go up another 1.5-2% by end year, so what, TV will go even below the amount I investment in it since my enrollment? (I saved all the paystubs).

I'll be releasing shortly and it's very frustrating to get screwed by pure timing (If I would've released a year ago, I would've made bank, I release this year, I'm getting screwed).

Also, does anyone knows if the TV keeps fluctuating after my release until I decide to claim it? (My understanding is I have up to 365 days to defer it). Is there a way to check the TV online similar to how I'm able to check it now with a PKI card? Or my only option is to call in?
Or is the TV value locked as of the day I release?

 

[MJP]

TV is not based on any investment value but rather is based purely on interest rates. They have increased therefore the return on your base investment is higher and the total cash required to pay what your pension would be right now is less.

Some great threads on it here and here that lay it out pretty decently

 

[Messerschmitt]

TV is not based on any investment value but rather is based purely on interest rates. They have increased therefore the return on your base investment is higher and the total cash required to pay what your pension would be right now is less.

Some great threads on it here and here that lay it out pretty decently

wow ok. So expect to receive even less than half, maybe 1/3 if the rates will be going up another 2% as expected. What a kick in the teeth.

And there's no way to retrieve the TV after more than 1 year? If I don't get it then, I'm forced to go for pension which I have to wait until I'm 60?

 

[brihard]

wow ok. So expect to receive even less than half, maybe 1/3 if the rates will be going up another 2% as expected. What a kick in the teeth.

And there's no way to retrieve the TV after more than 1 year? If I don't get it then, I'm forced to go for pension which I have to wait until I'm 60?

Correct. The point of TV is to allow you to match the performance that a defined benefit pension at that many years of contributions would give you. It’s based off very conservative investments, so it pegs mostly to bond yields. It’s not a rip off, it’s just the reality of how pension math works.

 

[Messerschmitt]

Correct. The point of TV is to allow you to match the performance that a defined benefit pension at that many years of contributions would give you. It’s based off very conservative investments, so it pegs mostly to bond yields. It’s not a rip off, it’s just the reality of how pension math works.

Never said it's a ripoff. I initially thought it's based on investments and I thought maybe they invested heavily into tech since that's the one that dropped the most.

 

[Messerschmitt]

How does pension buy back works? I take the TV now, and lets say I go crazy again and re-join in 5 years. I heard you have to option to pay like a few hundred bucks out of your pay for the next ?decades? to get back all your pension just like you wouldn't have taken the TV?

Any difference between Reserves and Reg?

 

[Humphrey Bogart]

TV is not based on any investment value but rather is based purely on interest rates. They have increased therefore the return on your base investment is higher and the total cash required to pay what your pension would be right now is less.

Some great threads on it here and here that lay it out pretty decently

@Messerschmitt it has to do with three factors: interest rates, Government bond rates and market performance. Changes to any of those variables will impact the value.

I aimed to withdraw it as quick as I could because it's only going to get worse IMO.

You can defer electing for a TV for up to a year but I wouldn't bet on interest rates or Government bonds getting any better in that time. My opinion is it's going to get worse but that's my personal opinion.

I still think it's worth it to take it because I see it being further devalued and I absolutely don't want the Government to have control of any of my money.

The actual cash payout isn't as drastically different because the amount I am legally allowed to shelter doesn't change and I end up having to pay significantly less taxes (I immediately started working when I released).

I have a plan and I am sticking to it. I would advise you to seek out a Certified Financial Planner and get the opinion of an expert on possible COAs.

 

[Messerschmitt]

@Messerschmitt it has to do with three factors: interest rates, Government bond rates and market performance. Changes to any of those variables will impact the value.

I aimed to withdraw it as quick as I could because it's only going to get worse IMO.

You can defer electing for a TV for up to a year but I wouldn't bet on interest rates or Government bonds getting any better in that time. My opinion is it's going to get worse but that's my personal opinion.

I still think it's worth it to take it because I see it being further devalued and I absolutely don't want the Government to have control of any of my money.

The actual cash payout isn't as drastically different because the amount I am legally allowed to shelter doesn't change and I end up having to pay significantly less taxes (I immediately started working when I released).

I have a plan and I am sticking to it. I would advise you to seek out a Certified Financial Planner and get the opinion of an expert on possible COAs.

Oh I absolutely realise that. I'm not insane to leave my pension to get 1500 + whatever index it is in 25 years from now.

I'm just crushed that I saved about 40k in RRSP space thinking I'd cash out about 150k and now it's down to 25k. Problem is as time goes by, it can reach 0 at which point even the sheltered sum will start dropping down to a minimum of return of contributions + interest which was shit for the past 14 years. And I could've really used that 40k in RRSP space for 2021 as I've made the most ever and paid a lot of taxes.

I will probably end up taking the TV as soon as my release is final. Thought I'm leaving it for the 2023 tax year, but might as well pay now 30-40% on 25k vs 0-20% on 0. It's just such a kick to have lost 1.5 years worth of wages. I literarily worked for nothing for the past 1.5 years vs if I would've (and could've) retired back then.

All this purely on timing. It's not like I could've done anything about it. Just so it happened that I lost 125k for being able to release one year later.

And the payout is drastic. I had 130k sheltered with 150k in cash. Now I'm down to 25k and 130k sheltered, like I said. I could've really used the 125k extra in 2023... That would've been 90k after tax without even taking advantage of my 40k RRSP space

 

[Humphrey Bogart]

Oh I absolutely realise that. I'm not insane to leave my pension to get 1500 + whatever index it is in 25 years from now.

I'm just crushed that I saved about 40k in RRSP space thinking I'd cash out about 150k and now it's down to 25k. Problem is as time goes by, it can reach 0 at which point even the sheltered sum will start dropping down to a minimum of return of contributions + interest which was shit for the past 14 years. And I could've really used that 40k in RRSP space for 2021 as I've made the most ever and paid a lot of taxes.

I will probably end up taking the TV as soon as my release is final. Thought I'm leaving it for the 2023 tax year, but might as well pay now 30-40% on 25k vs 0-20% on 0. It's just such a kick to have lost 1.5 years worth of wages. I literarily worked for nothing for the past 1.5 years vs if I would've (and could've) retired back then.

All this purely on timing. It's not like I could've done anything about it. Just so it happened that I lost 125k for being able to release one year later.

And the payout is drastic. I had 130k sheltered with 150k in cash. Now I'm down to 25k and 130k sheltered, like I said. I could've really used the 125k extra in 2023... That would've been 90k after tax without even taking advantage of my 40k RRSP space

I feel your pain. I got offered a job back in February and the CAF made me wait six months anyways and I had to decline the offer.

I saw the writing on the wall then and in hindsight I should have made an absolute show to get a 30 day release, cost myself easily 250k+.

Anyways, I got offered a bunch of other jobs and now not only am I employed immediately after releasing, I'm also spiteful .

 

[Messerschmitt]

I feel your pain. I got offered a job back in February and the CAF made me wait six months anyways and I had to decline the offer.

I saw the writing on the wall then and in hindsight I should have made an absolute show to get a 30 day release, cost myself easily 250k+.

Anyways, I got offered a bunch of other jobs and now not only am I employed immediately after releasing, I'm also spiteful .

In hindsight we could've both refused to attest to vaccination and we would've got a nice chunk of change as we would've been out beginning of the year. So I guess we did had an option, albeit not known at that time

 

[Humphrey Bogart]

In hindsight we could've both refused to attest to vaccination and we would've got a nice chunk of change as we would've been out beginning of the year. So I guess we did had an option, albeit not known at that time

Yep, getting vaccinated cost me 250k

My big takeaway and life lesson was you gotta always be looking out for yourself.