Calculating Your Pension
When you retire, your pension benefit is calculated using a pre-determined formula that considers your highest average salary (HAS) and years of pensionable service.
Your pensionable service (the number of years you have earned or accrued). For a more detailed explanation, visit our Pensionable Service page.
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.
To learn more on calculating your pension, visit the How your pension is calculated page.
When can I retire?
Depending on how many years you have been contributing to the TPP, you may qualify to retire with an unreduced pension, a reduced pension (early retirement), or a full pension.
Retire with an Unreduced Pension:
To retire with an unreduced pension means your pension is calculated with no early retirement reductions. To be eligible to retire with an unreduced pension, you must meet one of the following age and years of service requirements:
Rule of 85
|You must be at least 55 years old
|Your age + years of service = 85 years
(ex: age 57 with 28 years of pensionable service = 85
If you do not meet the Rule of 85, you must meet one of the following age and years of service requirements
|Years of Service
|with at least 10 years of service
|with at least 2 years of service
|with 35 years of service
Note: If you do not have any service on or after January 1, 1988, you require at least 10 years of service to qualify for a pension.
Retire with a Reduced Pension (Early Retirement):
To be eligible to retire early with a reduced pension, meaning your pension is calculated with reductions, you must meet one of the following age and service requirements. A reduced pension means your pension is reduced because you are retiring early and you will be receiving your pension over a longer period of time.
The chart below also explains the early reduction amount for each criteria:
|Years of Service
|The early retirement reduction is:
|At least 30 years
|5% for each year prior to qualifying for an unreduced pension
|At least 2 years but less than 10 years
|Based on actuarial equivalent value of pension if it started at age 65
|At least 10 years but less than 20 years
|Based on actuarial equivalent value of pension if it started at age 60
|At least 20 years
|* 0.4% for each of the first 24 months, and
* 0.3% for each month beyond 36 months from the date the member would first qualify for an unreduced pension
* The maximum reduction is 20.4%.
|Rule 80: when you reach age 50 with 30 years of pensionable service, you are eligible for a reduced pension.
|Your pension shall be reduced by 5% (pro-rated) for each year you either are less than age 55 or have less than 35 years of service, whichever is the lesser.
Retire with a Maximum Pensionable Service (Full Pension):
A full pension is based on a maximum of 35 years pensionable service. You can retire with a full pension when you reach 35 years of pensionable service. After 35 years of pensionable service, you stop contributing to the Plan and any service after this is not considered in the pension formula. However, salary increases beyond 35 years of service will be included in the pension calculation.
Other important information:
To be eligible for a pension under the Plan, you must be vested. You are vested if you have at least: two years of pensionable service, with some of this service after December 31, 1987; or, you are vested if you have after 10 years of pensionable service, when all service is prior to December 1, 1988.
The percentage of salary you earn for pension calculation purposes, for every year of service, is known as the accrual rate. Prior to age 65, this is 2.0%. Starting at age 65, your pension is recalculated as a result of integration with the Canada Pension Plan (CPP). At that point, the accrual rate on the portion of your salary up to the YMPE becomes 1.3% instead of 2.0%. Effectively, this is the same as saying that your pension (for every year of service) is reduced by 0.7% of the portion of your salary below the YMPE.
Applying for your Pension
One of the most important things to remember about your pension is that you must apply for it. It is not paid automatically upon retirement. It usually takes about one month to put a pension into pay, so apply early; 3 months ahead of your retirement if possible. Retirement application forms can be found on our forms page.