Introduction to retirement
Learn about the factors affecting the amount of your lifetime monthly pension from the plan.
There are many things to consider when planning your retirement, from when to retire to which pension option is best for you and your family.
Learning about your options will help you make these important decisions. Talking with an independent financial adviser can also help you determine your financial needs in retirement and identify other potential sources of retirement income. These can include your own personal savings, as well as Canada Pension Plan and old age security benefits.
When you can start your pension
For regular members, the earliest retirement age is 55.
For correctional members and certain ambulance paramedics, the earliest retirement age is 50.
Your pension may be reduced if you retire before meeting the criteria for an unreduced pension.
Your pension may be reduced if you retire before your normal retirement age and do not meet the criteria for an unreduced pension.
As required by the Income Tax Act, you must begin receiving your pension no later than the end of the year in which you turn 71, even if you are still working.
A monthly pension for your lifetime
You will receive a lifetime monthly pension when you retire. This is the amount of money the plan pays you every month for the rest of your life.
The amount of your monthly pension payment is based on a formula that includes your years of pensionable service and the average of your five highest years of salary. The amount is also determined by the pension option you choose at retirement.
Choosing a pension option
One of the most important decisions you will make when applying for your pension is choosing your pension option. Your choice will determine the amount paid to you each month and to your spouse or beneficiaries after your death.
For example, one of your pension options may include a guarantee period, such as a single life guaranteed 15-year option. This means, if you die within 15 years of starting your pension, your spouse or beneficiary will receive a pension for the remainder of the guarantee period. If you choose a 100% joint life option, your spouse will receive a pension for their lifetime. These pension options reduce the amount of your monthly pension payments to reflect the likelihood that your pension will be paid for a longer period.
No matter which pension option you choose, you will receive a lifetime monthly pension payment.
What happens after you die
Depending on the pension option you choose at retirement, after your death, the plan may continue to pay:
- A pension to your spouse (if you have one) for their lifetime
- Pension benefits to another beneficiary(ies)
- A lump-sum payment to your estate or an organization named as your beneficiary