First, I am assuming that you are doing this out of goodwill and that
this is not a requirement of you. Employees generally pay, at least in
part into a retirement plan throughout their work career, which is
usually a percentage of their pay. In your case, it appears that you
want to set this up for a loyal employee without having had a specific
system in place.
If the employee has in fact been paying into a pension plan, there are
specific requirements in place which you can find here:
I would think that with 35 years, the pension should be at least 80%
of the average of the last 10 years, with yearly COLA (cost of living
allowances) adjustments at about or just below the inflation level.
This is just a suggestion, and opinions may vary from other users.
Ultimately, if there is no prior agreement, this amount would be
completely up to you.
You also need to clearly document the program you are setting up get a
signed agreement. There are pensions where the surviving spouse
continues to receive a benefit, and this may or may not be what you
have in mind. Here is a list of different plan options that are
possible: http://www.traf.mb.ca/index.cfm?pageID=234 with more
detailed information here:
Many plans let the user choose a plan type, but the choice is
permanent and cannot be changed. You also need to realize that once
you start paying this and agree to do it, the expectation of you
continuing to pay will be there. You need to examine closely what
amount you are able to give per month for what could be a considerable
number of years. In essence, this is more of a monthly retirement gift
than a pension plan.
You should also carefully examine what types of government assistance
is available to the former employee. You do not want your money to
cancel out any sort of assistance that the former employee would
otherwise have been entitled to. IE: Old Age Security or similar
programs. Hopefully you can find a way to supplement this assistance.
One company that you may want to discuss this with is
http://www.ingretirementplans.com They offer a free consultation at
888-238-6243 and would be able to set up the monthly transfers for you
Are there any other specific questions you have regarding this? If so,
I will be happy to continue assisting you as best as I can.
All the best,