Retiring before the normal retirement age will affect your pension. Here are the key points to consider.
Early retirement for correctional members
For correctional members, the normal retirement age is 60 and the earliest retirement age is 50.
Depending on when you started your service, you maybe be affected by up to three different plan designs. The latest plan design change, which became effective April 1, 2018, provided correctional members with a past service pension improvement for service earned between April 1, 2006 and April 1, 2018. Further plan design changes for correctional members are in development and information will be shared as it becomes available.
Note: the rules in effect at the time you earn service will apply.
The Personalized Pension Estimator in My Account calculates your pension estimates with all the applicable plan designs.
If you are thinking about retiring before age 60, you should keep the following in mind:
- You will receive a reduced pension if you do not meet the minimum age and service criteria for an unreduced pension
- You will receive a bridge benefit as part of the current plan design
- You can buy a temporary annuity (full or half) to supplement your retirement income until you turn 65 or die, whichever happens first
When you retire, any extended health care and dental coverage you were receiving through your employer will stop. However, you can apply for extended health care and dental coverage through the Public Service Pension Plan when you apply for your pension.
Calculating your reduced pension
If you decide to retire early but do not meet the criteria for an unreduced pension, your pension will be reduced. Your bridge benefit will also be proportionately reduced.
The reduction amount is based on a combination of your:
- Age when you leave your job
- Contributory service
- Age when you start receiving your pension
Reductions are pro-rated by month for partial years.
The easiest way to learn how your pension will be calculated is to use the Personalized Pension Estimator in My Account. You can save up to 10 different estimates, allowing you to see how your monthly pension can be affected by different retirement ages. Sign in to My Account at the top of your screen.
The rule of 85
All of your years of contributory service are used to calculate your eligibility. In the current plan design, the rule of 85 applies to correctional members. That means if your age and years of contributory service equal at least 85, you can retire with an unreduced pension.
If your age plus years of contributory service is less than 85, your pension will be reduced by 3.0 per cent per year if you meet the following criteria:
- You are at least age 50 when you leave your job
- You have at least 10 years of contributory service
If you do not meet the age and service criteria for a 3.0 per cent reduction, and you have at least two years of contributory service, your pension will be reduced by 5.0 per cent for each year that
- you are under age 55, or
- the sum of your age plus years of contributory service is less than 85,
- whichever is less.
If you do not meet the age and service criteria for a 3.0 per cent reduction, your pension will be reduced by 5.0 per cent for each year that:
- You are under age 60
- The sum of your age plus years of contributory service is less than 85
- You have more than 2 years of contributory service but less than 10 years
If you are 50 and have less than two years of contributory service, your pension will be reduced by 5.0 per cent for each year you are under age 60.
Calculating Your Bridge Benefit
This benefit is designed to bridge the gap between your early retirement income and your income after you turn 65, which may also include Canada Pension Plan and old age security benefits. The Personalized Pension Estimator in My Account will calculate your entitlement to a bridge benefit.
|Up to March 31, 2006||0.65% x (lesser of previous year’s maximum pensionable earnings [YMPE] or highest average salary) x pensionable service|
|April 1, 2006 to March 31, 2018||
0.35% x (lesser of previous YMPE or highest average salary) x pensionable service
|On and after April 1, 2018||0.65% x (lesser of previous YMPE or highest average salary) x pensionable service|
The bridge benefit may increase because of an annual inflation adjustment.