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Types of pensions

Your pension, under a defined benefit plan, is determined by a formula that considers how long you work and how much you earn, not the ups and downs of the market.

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Unreduced pension

You can collect an unreduced pension:

  • When you reach your 85 factor (age + qualifying years = 85), or
  • At age 65 or after

Keep in mind that you must begin collecting your pension no later than December of the year in which you turn age 71.

We provide a bridge benefit to supplement your retirement income over and above your lifetime pension amount until you reach age 65, when you’re eligible for an unreduced CPP pension. The month after you turn 65, or earlier if you start a CPP disability pension, the bridge benefit ends. If you start a CPP disability pension before age 65, you must contact us so we can adjust your pension.

Let’s look at an example to see the difference in your retirement income if you reach your 85 factor before you turn 65, or if you keep working until age 65.

You retire when you reach your 85 factor. You’re 57 years old and have 28 years of actual credit. Your lifetime retirement pension is around $47,250 and you’re able to collect an additional bridge benefit of approximately $6,700 until you turn 65.

If you decide to continue working until you turn 65, you won’t collect the bridge benefit, but your lifetime retirement pension will increase to about $54,000.

Bar chart example Example comparing retirement pensions at 85 factor and age 65. 85 factor shows lower lifetime pension with bridge benefit ending at 65. Age 65 shows higher lifetime pension without bridge benefit. Retiring at85 factor Retiring at age 65 0 $47,000 $54,000 Bridge benefit(Paid to end of monthyou turn 65) Lifetime pension

These amounts are just the starting point. There may be adjustments to account for survivor benefits or inflation. Use the pension calculator in your account for a more detailed breakdown.

Reduced pensions

Don’t think you want to work until you reach your 85 factor or turn 65? You can take an immediate or deferred reduced retirement pension starting at age 50.

You get an immediate reduced pension when you stop working in education and begin collecting your pension the following month. Immediate pensions are reduced by:

  • 2.5% for each point you're away from the 85 factor, or
  • 5% for each year you're under age 65, whichever is less

Example

You start your pension as soon as you retire at age 52 with 30 years of credit.

Since you're three points shy of your 85 factor (85 - 3 = 82), your pension is then reduced by 7.5% (2.5% x 3).

$51,000
basic annual pension
-
7.5%
percentage of reduction by point
=
$47,175
basic annual pension after reduction

Deferred reduced pension

If you don't begin your pension the month after you stop working, and if you haven’t reached the 85 factor or age 65, your pension will be reduced. The amount of the reduction depends on when you last worked and your age at the end of that month.

  • Before January 1, 2018, regardless of age – 5% for each point you’re away from your 85 factor or for each year you’re under age 65, whichever is less
  • On or after January 1, 2018, and under age 50 – 5% for each point you’re away from the 85 factor or for each year you’re under age 65, whichever is less
  • On or after January 1, 2018, and age 50 or older – the lesser of:
    • 2.5% for each point you're away from the 85 factor, or
    • 5% for each year you're under age 65

Example

You stop working in education at age 52 with 30 years of credit but you don’t start your pension right away.

If your last day of work occurred before January 1, 2018:

Since you're three points shy of your 85 factor (85 - 3 = 82), your pension is then reduced by 15% (5% x 3).

$51,000
basic annual pension
-
15%
percentage of reduction by point
=
$43,350
basic annual pension after reduction

If your last day of work occurs after January 1, 2018:

Since you're three points shy of your 85 factor (85 - 3 = 82), your pension is then reduced by 7.5% (2.5% x 3).

$51,000
basic annual pension
-
7.5%
percentage of reduction by point
=
$47,175
basic annual pension after reduction

Keep in mind, if you defer your pension, it’ll reflect changes in the cost of living from the time you stopped working in education.

Disability pension

If you become disabled while employed in education, you may be eligible for a disability pension. To qualify, you must:

  • Have at least 10 qualifying years of service in our plan
  • Terminate employment in education and stop receiving any LTIP or WSIB loss of earnings benefits
  • Provide full and complete documentation of medical evidence that meets the requirements of our plan for a full or partial disability pension, as of the date you terminated employment, and
  • Be under age 65

You must submit a pension application within two years of your termination of employment in education. If you qualify, we must then determine if you're eligible for one of two types of disability pensions.

Two types of disability pensions

  • Full disability pension – You're incapable of employment in any occupation
  • Partial disability pension – You're incapable of employment in the education field. Your partial disability pension is calculated like a full disability pension and then reduced by 2.5% for each point you're under your 85 factor or age 65, whichever is less

Example

If you’re 46 and have 22 qualifying years of service, your pension would be reduced by 42.5% because you’re 17 points under the 85 factor.

Your disability pension will be paid for as long as you remain disabled but note that employment in any occupation will end a full disability pension. If you’re receiving a partial disability pension, there isn’t an impact to your pension if you work outside of education.

If you’re thinking about returning to work, contact us first. We may need to suspend your pension.