Planning your Retirement

Your normal retirement date (NRD) is the first day of July nearest your 65th birthday.

Early retirement is permitted any time after you reach 55 or ten years prior to normal retirement.

If you retire early, you will receive a pension in an amount equal to the greater of your Money Purchase Pension or your Minimum Guarantee Pension plus your pension from Additional Voluntary Contributions (if applicable).

Pensions at early retirement are reduced to reflect the fact that you are retiring before your Normal Retirement Date.

• The amount of your Money Purchase Pension will be less than at normal retirement because you and the University would have contributed for a fewer number of years.
• Therefore, your account would have had less time to grow in value, and you will collect your pension for a longer period than if you retired later.

Minimum Pension

The Minimum Guarantee Pension will be based on your earnings and participation to your early retirement date and reduced as follows:

For early retirements after July 1, 2012, the Minimum Guarantee pension will be reduced by the actuarial equivalent factors which will range between 5% and 7% for each year prior to your Normal Retirement Date. These factors will apply to current members born after 1957 and to new members joining on or after July 1, 2012.

For plan members who were eligible to retire on July 1, 2012 (i.e. age 55 or within 10 years of your normal retirement date), the Minimum Guarantee pension will be reduced by one-quarter (0.25) of one percent for each month of early retirement prior to your Normal Retirement Date. This applies regardless of the date on which you actually choose to retire.

You may remain in the service of the University following your normal retirement date, however you may in no event postpone the commencement of your pension beyond December 1 of the year in which you reach age 71.

Contributions

If you postpone retirement, you have a choice of continuing your required contributions or stopping contributions. At actual retirement, you will receive a pension in an amount equal to the greater of your Money Purchase Pension or your Minimum Guarantee Pension plus your Pension from Voluntary Contributions (if applicable).

Minimum Pension

The amount of your minimum pension will depend on whether or not you continued to contribute to the plan after normal retirement. If you continued to contribute, your Minimum Guarantee Pension will be based on your participation in the plan and earnings up to your actual retirement date.

Other benefits such as Life Insurance and Long Term Disability may reduce or cease at your NRD.

This pension is calculated from the total balance to your credit in your Money Purchase Component Account, based on the actuarial tables in force for plan purposes at that time.

The amount of your Minimum Guarantee pension benefit will be calculated using the following formula:

Minimum Guarantee pension =
Years of Credited Service
× [The Sum of 1.29% of the average of your highest 5 years’ earnings up to the 5-year average of the YMPE
+ 2% of the average of your highest 5 years’ earnings in excess of the 5-year average of the YMPE]

Example

Assumptions

• Average of 5 highest Years’ Earnings = $80,000
• Average of 5 highest Years’ YMPE = $50,482
• Credited Service = 35 Years

Calculation

Minimum Guarantee Pension = 35 × [(1.29% × $50,482) + 2% × ($80,000 −50,482)] = $43,455.22

You will receive an additional amount of pension, commencing at the end of the month of your retirement and payable in monthly instalments for your remaining lifetime.

Instalments are provided from the balance in your Additional Voluntary Contributions (AVC) Fund and based on the actuarial tables in force for plan purposes at the time.

Additional Voluntary Contributions can be withdrawn in cash, transferred to an RRSP or RRIF, or left in the Plan. However, any special transferred contributions which were subject to “locking in” provisions must remain locked-in. Cash withdrawals are subject to taxation.

The normal form of pension is payable for your lifetime and guaranteed for a minimum of five (5) years. If you die after your retirement but before receiving 60 monthly payments, the balance of the guaranteed payments will be paid to your beneficiary.

There are many alternative forms of pension payments available. You may choose one of these other forms by giving written notice to the University any time prior to the commencement of your pension. The following are some examples of these alternatives:

This pension is payable for your lifetime, except that a minimum of 120 or 180 monthly payments are guaranteed. Because more payments are guaranteed, the amount of pension under this form will be less than the amount of a normal pension.

This pension is payable for your lifetime and stops on your month of death regardless of the number of payments that have been made.

This form of pension is payable for your lifetime with all or part of your benefit continuing to your surviving spouse after your death.

The amount of monthly pension under this option is less than the normal form because the pension is paid over the lifetimes of two people, and it may vary considerably from the basic pension depending on the age of your spouse.

Definition of Spouse and Legislation

Pension legislation guarantees survivor benefits to spouses of members of the Retirement Plan. Survivor benefits include the pre-retirement death benefit and the joint and survivor pension of at least 60% of the member’s pension should the member predecease the spouse. The definition of spouse in the legislation is as follows:

“Spouse” means a person of the same or the opposite sex, who at the date of determination:

1. is married to the member and is not living apart from the member, or
2. is not married to the member but has been living with the member in a conjugal relationship:

• continuously for a period of not less than three years, or
• in a relationship of some permanence, if they are the parents of a child as set out in section 4 of the Children’s Law Reform Act

A member who has a spouse at retirement must receive the pension in a form, which continues at least 60 percent of the initial amount to the surviving spouse, unless the spouse waives the right to pension in writing. The amount of the initial pension will be actuarially adjusted so that its value is the same as the value of the pension under the normal form.

If both spouses agree in writing using the prescribed form within 12 months immediately preceding the pension commencement, the pension may be paid in another form.