Benefits for Retired Members
June 2011 - Section 5

Calculating Your Pension

If you retired before age 65, you will receive a monthly pension which includes:

• A lifetime pension payable from the date you start receiving your pension until your death, and
• A temporary bridge benefit payable from the date you start receiving your pension until age 65 or until you start receiving CPP or QPP disability benefits, whichever occurs first. (Please refer to Section 4 for more information on the bridge benefit.)

If you retired after age 65, you will only receive the lifetime pension; the bridge benefit will not be paid.

The following explains how your public service pension is calculated:

Lifetime pension

The formula for calculating the lifetime pension* is as follows:

PLUS

Example: a plan member retiring in 2010 at age 60 with 25 years of pensionable service, an average salary of $46,000 and reaching age 65 in 2015. The monthly lifetime pension would be calculated as follows:

PLUS

The total monthly lifetime pension would be $1,332.81 per month ($1,284.48 + $48.33).

Bridge benefit

The formula for calculating the bridge benefit is as follows:

Example: a plan member retiring in 2010 at age 60 with 25 years of pensionable service, an average salary of $46,000 and reaching age 65 in 2015. The monthly bridge benefit would be calculated as follows:

The total monthly bridge benefit would be $583.85.

Until you reach age 65 or until you start receiving disability benefits from the CPP or QPP, you would receive a total pension of $1,916.66 per month (lifetime pension of $1,332.81 + bridge benefit of $583.85). As soon as you reach age 65 or you start receiving a disability benefit from the CPP or QPP, the bridge benefit portion stops and you only receive your lifetime pension* ($1,332.81).

Note: The maximum period of pensionable service is 35 years and the average salary is calculated over the best five consecutive years. If you retired before June 17, 1999, the average salary is calculated over a six-year period.

For periods of part-time pensionable service, the calculation is adjusted based on the assigned hours compared to the full-time hours of the position. For example, if an employee contributes to the plan based on a 20-hour work week and the equivalent full-time position is 40 hours, the pension would be reduced by one half for that period.

If you were subject to a pension benefit division under the Pension Benefits Division Act, your pension will be adjusted to take into account the funds that were transferred to your spouse, former spouse, or former partner.

Immediate Annuity, Deferred Annuity and Annual Allowance

The normal retirement age under the public service pension plan is age 60. If you retired at age 60 with at least two years of pensionable service, you were entitled to an immediate annuity. An immediate annuity is also payable to plan members who retired:

• between age 55 and 60 with at least 30 years of pensionable service;
• at any age with at least two years of pensionable service and are disabled/disability.

The immediate annuity is calculated the same way as explained above.

If you retired before the normal retirement age and chose to wait until age 60 to receive your pension, this is called a deferred annuity. It is calculated the same way as the immediate annuity. The only difference is that you wait until age 60 to receive your pension.

You can request immediate payment of your deferred annuity at any time between the ages of 50 and 60. In this case, the pension will be reduced because you are going to receive it over a longer period of time than if you were to wait until it became payable at age 60. A pension benefit with this reduction is called an annual allowance.

The chart in this booklet expresses your pension as a percentage of the average salary, payable at a given age and years of pensionable service. For example, a person who resigns at age 50 with 25 years of pensionable service and an average salary of $36,000 can choose a deferred annuity payable at age 60 or an annual allowance at an earlier date.

To determine a pension payable at age 60, read down to the age (60) and across to the years of pensionable service (25). The monthly pension, expressed as a percentage of the average salary would be 50 percent, or:

(50% × $36,000) ÷ 12 months = $1,500 per month

If payment is requested at an earlier age, 58 for example, the annual allowance, according to the chart, would be 45 percent of the average salary, or:

(45% × $36,000) ÷ 12 months = $1,350 per month

NOTE: The shaded area on the chart does not apply to those plan members who retire prior to age 50 and who choose an annual allowance. If you are in this situation, the reduction is 5 percent for each year (to the nearest one tenth) that you are less than age 60 on the date the pension becomes payable.

Operational Service

Pension eligibility differs for employees of the Correctional Service Canada engaged in operational service. Please contact the Pension Centre (see Section 1) if you require additional information.