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How is your pension calculated and paid

The amount of your pension is determined by:

• Total contributions paid into the plan on your behalf
• Pension factor
• Your age at retirement
• Your spouse’s age at retirement
• The type of pension option you choose.

Your pension is paid to you each month for as long as you live. When you retire, you can choose one of a range of options for continuing payments to your spouse or beneficiary after your death. The normal form of pension is a retirement income paid to you each month for life with a 10-year period guarantee, which means if you die within the first 120 months of starting your pension, the remainder is paid to your beneficiary or estate. You may want to seek independent financial advice about which option is best for you.

Pension formula

Your contributions earned during four distinct periods are multiplied by the corresponding pension factor then added together to make up your monthly pension. A pension factor of 2.55 per cent is applied to contributions earned to April 30, 1982; 2.80 per cent is applied to contributions earned from May 1, 1982 to December 31, 2002; 2.0 per cent is applied to contributions earned from January 1, 2003 to December 31, 2008; 1.75 per cent is applied to contributions earned since January 1, 2009 to December 31, 2011; 1.2 percent is applied to contributions earned since January 1, 2012

You can retire with an unreduced pension on the first of any month between your 62nd and 65th birthday, provided you have the consent of the Trustees. Your normal retirement date is the first of the month following your 65th birthday. “Normal” retirement date is pension terminology referring to a plan’s default retirement date. You can retire with a reduced pension as early as age 55 without Trustee consent. Your pension is reduced by six per cent for each year (prorated for part years) that your retirement date falls before age 65. This reduction reflects the fact that you are likely to receive more pension payments than someone who retires later.

*Note

  In order to qualify for an unreduced Pension, you must meet the following requirements:

• Your employer must have remitted contributions on your behalf, or you earned disability credits within 36 out of the last 60 months prior to your retirement.
• With the Trustees consent and based on the financial position of the plan.  If the Trustees consent is not received, your Pension will be reduced by six percent (6%) for each year, or prorated for partial years in which your retirement date falls before age 65.