Early Retirement Changes
For members who elect to retire early prior to age 65, the plan currently reduces the minimum guarantee pension benefit by 2.5 per cent per year for those who retire prior to age 60 and by 1.5 per cent per year for those who retire after age 60. This reduction amount has been increased for service accrued on or after Jan. 1, 2013 – the reduction will be 3 per cent per year if retirement is between age 60 and 65, and an additional reduction of 5 per cent per year for each year prior to age 60. Since the change applies only to service accrued from Jan. 1, 2013 forward, employees who elect early retirement and have service accrued before this date will receive a blended reduction rate as per the example below.
- Member retiring at age 60 with 15 years of service prior to 2013 and 15 years of service after 2013:
- A reduction to the minimum guarantee pension of 1.5 per cent per year would apply to service accrued up to 2013 and a reduction of 3 per cent per year would apply to service accrued after 2013. The blended reduction rate would therefore equal approximately 2.25 per cent per year for 5 years for a total reduction of 11.25 per cent.