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How your pension is calculated

Your pension benefit calculation is a pre-determined formula that is based on:

  • Your 5-year highest average salary (HAS). This is your average annual salary for the five years of your career during which your salary was at its highest.
     
  • The average Year’s Maximum Pensionable Earnings (avg. YMPE). The avg. YMPE is based on the same period as your HAS.
    • The YMPE is set by the federal government and is used in determining the reduction to your pension at age 65. It changes every January 1 to reflect increases in the average wage.
       
  • Your pensionable service, is the number of pensionable years you have earned.
    • It is equal to the number of years you worked and made pension contributions, including any purchases of service and reciprocal transfers into the Plan. If you worked part-time, your pensionable service would be prorated accordingly. For example, if you worked 10 years at 50% part-time, your pensionable service would be 5 years. 

 

Your pension benefit is made up of two components, your lifetime pension and your bridge benefit.

  • Your lifetime pension is payable from the date you start receiving your pension until death. 
  • Your bridge benefit is payable from the date you start receiving your pension until age 65.

Understanding your PSSP Calculation

Contribution rates
Your contribution level determines the pension accrual rate (or percentage) used in the pension formula.

There are three contribution levels for Plan members, as selected by your employer: either Level 100%, Level 80%, or Level 60%.

 

Unreduced Pension Calculation Examples: 

Your lifetime pension is calculated as:

  • 1.3% of your HAS, up to the average YMPE, multiplied by your pensionable service, plus
  • 2.0% of any portion of your HAS above the average YMPE, multiplied by your pensionable service

Your bridge benefit is calculated as:

  • 0.7% of your HAS, up to the average YMPE, multiplied by your pensionable service
  • The bridge benefit is payable until age 65.

Example:

A Plan member is retiring at age 55 with 30 years of pensionable service. Their HAS is $65,000 and the average YMPE is $69,180.

 At age 55At age 65
1.3% x 30 years x $65,000 (lifetime)    $25,350    $25,350
0.7% x 30 years x $65,000 (bridge)+  $13,650+  $0
Annual Pension=  $39,000=  $25,350
Monthly Pension    $3,250    $2,113
level 100% 1

A Plan member is retiring at age 60 with 15 years of pensionable service. Their HAS is $90,000 and the average YMPE is $69,180 ($20,820 above YMPE).

 At age 60At age 65
1.3% x 15 years x $69,180 (lifetime)    $13,490   $13,490
2.0% x 15 years x $20,820 (lifetime)+  $6,246+ $6,246
0.7% x 15 years x $69,180 (bridge)+  $7,264+  $0
Annual Pension=  $27,000=  $19,736
Monthly Pension    $2,250    $1,645
level 100 - 2

Your lifetime pension is calculated as:

  • 1.04% of your HAS, up to the average YMPE, multiplied by your pensionable service, plus
  • 1.60% of any portion of your HAS above the average YMPE, multiplied by your pensionable service

Your bridge benefit is calculated as:

  • 0.56% of your HAS, up to the average YMPE, multiplied by your pensionable service
  • The bridge benefit is payable until age 65.

Example:

A Plan member is retiring at age 55 with 30 years of pensionable service. Their HAS is $65,000 and the average YMPE is $69,180.

 At age 55At age 65
1.04% x 30 years x $65,000 (lifetime)    $20,280    $20,280
0.56% x 30 years x $65,000 (bridge)+  $10,920+  $0
Annual Pension=  $31,200=   $20,280
Monthly Pension    $2,600     $1,690
level 80 - 1

A Plan member is retiring at age 60 with 15 years of pensionable service. Their HAS is $90,000 and the average YMPE is $69,180 ($20,820 above YMPE).

  At age 60At age 65
1.04% x 15 years x $69,180 (lifetime)    $10,792    $10,792
1.60% x 15 years x $20,820 (lifetime)+  $4,997+  $4,997
0.56% x 15 years x $69,180 (bridge)+  $5,811+  $0
Annual Pension=  $21,600=  $15,789
Monthly Pension    $1,800    $1,316
level 80 -2

Your lifetime pension is calculated as:

  • 0.78% of your HAS, up to the average YMPE, multiplied by your pensionable service, plus
  • 1.20% of any portion of your HAS above the average YMPE, multiplied by your pensionable service

Your bridge benefit is calculated as:

  • 0.42% of your HAS, up to the average YMPE, multiplied by your pensionable service
  • The bridge benefit is payable until age 65.

Example:

A Plan member is retiring at age 55 with 30 years of pensionable service. Their HAS is $65,000 and the average YMPE is $69,180.

 At age 55At age 65
0.78% x 30 years x $65,000 (lifetime)    $15,210    $15,210
0.42% x 30 years x $65,000 (bridge)+  $8,190+  $0
Annual Pension=  $23,400=  $15,210
Monthly Pension    $1,950    $1,268
Level 60 - 1

A Plan member is retiring at age 60 with 15 years of pensionable service. Their HAS is $90,000 and the average YMPE is $69,180 ($20,820 above YMPE).

 At age 60At age 65
0.78% x 15 years x $69,180 (lifetime)    $8,094    $8,094
1.20% x 15 years x $20,820 (lifetime)+  $3,748+  $3,748
0.42% x 15 years x $69,180 (bridge)+  $4,358+  $0
Annual Pension=  $16,200=  $11,842
Monthly Pension    $1,350    $987
Level 60 - 2