Your pension benefit calculation is a pre-determined formula that is based on:
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Your pension benefit is made up of two components, your lifetime pension and your bridge benefit.
Your lifetime pension is calculated as 1.3% of your HAS, up to the average YMPE, plus 2.0% of your HAS above the average YMPE*, multiplied by your pensionable service. It is payable from the date you start receiving your pension until death.
* The average YMPE is based on the same time period as your HAS.
Your bridge benefit is calculated as 0.7% of your HAS, up to the average YMPE, multiplied by your pensionable service. It is payable from the date you start receiving your pension until age 65.
The bridge benefit is designed to supplement your income until unreduced benefits are payable from CPP at age 65. If you retire before age 65 and decide to begin receiving a reduced CPP benefit prior to age 65, you will still receive the bridge benefit until age 65.
You must be at least 55 years old with at least 10 years of pensionable service for the bridge benefit to be payable.
Understanding your TPP Calculation
A Plan member has met the age and years of service requirements for an unreduced pension (age 55 plus 30 years of pensionable service). Their HAS is $98,000 and the average YMPE is $65,530 (earnings of $32,470 are above the average YMPE).
| At age 55 | At age 65 | |
| 1.3% x $65,530 x 30 years (lifetime) | $25,556.70 | $25,556.70 |
| 2.0% x $32,470 x 30 years (lifetime) | + $19,482.00 | + $19,482.00 |
| 0.7% x $65,530 x 30 years (bridge) | + $13,761.30 | + $0.00 |
| Annual Pension | = $58,800.00 | = $45,038.70 |
| Monthly Pension | $4,900.00 | $3,753.23 |
| The Plan member’s annual pension benefit will be $58,000.00 until age 65. After age 65, the bridge benefit is no longer paid and the member’s annual lifetime pension will be $45,038.70. | ||
A Plan member is retiring early at age 55 with 20 years of pensionable service (e.g., 5 years early as their unreduced age is 60). Their HAS is $98,000 and the average YMPE is $65,530 (earnings of $32,470 are above the average YMPE).
| At age 55 | At age 65 | |
| 1.3% x $65,530 x 20 years (lifetime) | $17,037.80 | $17,037.80 |
| 2.0% x $32,470 x 20 years (lifetime) | + $12,988.00 | + $12,988.00 |
| 0.7% x $65,530 x 20 years (bridge) | + $9,174.20 | + $0.00 |
| Annual Pension Reduction (60 months early = 20.4%) * | = $39,200.00 - $7,996.80 = $31,203.20 | = $30,025.80 - $6,125.26 = $23,900.54 |
| Monthly Pension | $2,600.27 | $3,753.23 |
| The Plan member’s annual pension benefit will be $31,203.20 until age 65. After age 65, the bridge benefit is no longer paid and the member’s annual lifetime pension will be $23,900.54. | ||
| * Reduction = 0.4% per month for first 24 months = 0.3% per month for next 36 months | ||