A to Z

Pensions can be complicated. This glossary can help explain the language.


Click on a letter below to get to the word you're looking for. For the complete picture, please see the definitions in the plan rules.

A

B

C

D

E

F

G

H

I

J

K

L

M

N

O

P

Q

R

S

T

U

V

W

X

Y

Z


A


  Accrual rate The multiplier used in the pension formula, along with your pensionable service and earnings, to calculate your lifetime pension.
 
  Active member A member who is currently making contributions to the pension plan, on a leave of absence, receiving benefits from an approved long-term disability plan or still working but no longer contributing because they’ve accrued 35 years of service.
 
  Actuary A financial professional who independently conducts a review of the plan’s funded position.
 
  Actuarial valuation A review of the plan’s funded position, done at least every three years by the actuary.
The valuation determines the financial position of the plan and the future contribution rates needed to ensure its long-term funding. The actuary determines how much money the plan needs to pay pensions by making assumptions about future investment returns, future inflation rates, future increases in salaries, retirement ages, life expectancy and other factors.
 
  Arrears A period of time when you and your employer should have contributed to the plan but did not.
 
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B


  Beneficiary The person(s), trustee(s) or organization(s) that are designated to receive your pension after you die.
If you have a spouse, they automatically become your primary beneficiary (unless they waived that right).
 
  Benefit Any entitlement granted to a member or beneficiary under the plan rules, regardless of whether it is a lifetime entitlement. Benefits include a commuted value, pension, refund, bridge benefit, temporary annuity, monthly benefit, etc.
 
  Bridge benefit A temporary monthly amount paid in addition to the lifetime pension. It is payable from your retirement date until you turn 65 or die, whichever comes first. For members who are not police officers or firefighters, the bridge benefit applies only to service prior to January 1, 2022.
 
  Buying service See “purchase of service.”
 
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C


  Child-rearing The time you took off work to care full-time for a child under age seven. You can get credit for child-rearing time to increase your contributory service, which could help you qualify for an unreduced pension or lower your pension reduction.
 
  Commuted value A lump-sum value based on the amount of money the pension plan would need to put aside today, at current interest rates, to pay for your future pension at retirement.
 
  Compassionate care leave Time taken away from work to provide care and support to a family member who has a serious medical condition with a significant risk of death within 26 weeks.
You may be eligible to buy back this time.
 
  Consumer price index (CPI) A measure of the rate of price changes for goods and services bought by Canadian consumers.
It is one of the factors used to calculate cost-of-living adjustments for pensions.
 
  Contributory service You get a month of contributory service for every month during which you make a contribution to the plan (or are deemed to have made a contribution). It’s used to determine if your pension will be reduced and by how much.
 
  Cost of Living Adjustment (COLA) A non-guaranteed increase to your monthly pension payment. COLA is based on the Canadian consumer price index and is applied to your pension in January each year if there are sufficient funds in the plan’s inflation adjustment account. COLA is granted at the discretion of the board after considering all relevant factors including the sustainability cap.
 
  Critical illness or injury leave Unpaid leave to care for a family member whose health has significantly changed due to critical illness or injury, with the result that the life of the family member is at risk. The leave entitlement is 36 weeks within 52 weeks to care for a family member under the age of 19, and 16 weeks within 52 weeks for a family member who is 19 years of age or older. You may be eligible to buy back this time.
 
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D


  Deferred pension If you stop working and contributing to the plan and do not take your pension, you may apply to receive a pension in the future.
 
  Defined benefit plan A pension plan that provides you a lifetime pension based on a specific formula.
Your entitlement to a lifetime pension is independent of contributions and determined by a formula that includes factors such as your highest average salary, how much service you earned and a set accrual rate.
 
  Disability benefit A monthly payment granted to a member deemed “totally and permanently disabled” in accordance with section 60 (1) of the plan rules. Though calculated like a pension, a disability benefit terminates if a member is no longer considered totally and permanently disabled. Therefore, it is not necessarily a lifetime entitlement.
 
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E


  Earliest retirement age The earliest age you can start receiving your pension.
 
  Entry age normal cost The contribution rate required to pay for future years of service in the pension plan as determined by the actuarial valuation.
 
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F


  Full assignment Your full assignment is the workload specified in your contract for your position. If your contract specified a full-time workload, your full assignment is full-time hours. If your contract stated a part-time workload of twenty-five hours per week, your full assignment is twenty-five hours per week.
 
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H


  Highest average salary (HAS) Your best five years of earnings or, if you are employed in group 2 or group 5 on or after January 1, 2022, your best four years. To calculate this average, the plan uses the best years of full-time-equivalent earnings from your entire time with the plan. When you retire, your pension is based on a formula that uses your highest average salary.
 
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I


  Inactive member A member who has terminated their employment and kept their money in the pension plan but is not currently receiving a pension from the plan.
 
  Inflation adjustment account (IAA) An account that holds a portion of member and employer contributions, earning investment income.
It funds cost-of-living adjustments that may be granted on top of retired members’ monthly pension income to help offset the effects of inflation.
 
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J


  Joint life option A monthly pension guaranteed to be paid for your lifetime and your spouse’s lifetime. Should you die before your spouse, they will receive your monthly pension (or a portion of your monthly pension) for the remainder of their life.
 
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L


  Latest retirement age (LRA) The latest age you can start receiving your pension.
You must start receiving your pension by December 1 of the calendar year you turn 71.
 
  Leave of absence An employer-approved absence from work, with or without pay.
You may be eligible to buy back time for the period and this may increase your pension.
 
 

Leave respecting domestic or sexual violence

If you or an eligible person in your daily care has experienced or is experiencing domestic or sexual violence, you may take leave to seek medical attention, counselling or other social or psychological services, or legal advice, or to seek new housing if you or an eligible person has experienced domestic or sexual violence. You may be eligible to buy back this time.
 
  Lifetime pension The portion of a pension paid out over your lifetime. Depending on the option you select at retirement, payment may continue to your beneficiary(ies).
It does not include the bridge benefit or temporary annuity.
 
  Limited member Your former spouse who applied to the plan to become a “limited member” following your separation or divorce.
They are entitled to a portion of your pension.
 
  Locked-in Pension plan funds that cannot be paid in cash. They must be used to provide a lifetime pension.
 
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M


  Marital breakdown Separation or divorce.
 
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N


  Non-contributory service A period when you worked for your employer, but you did not contribute to the plan because you weren’t eligible to contribute (e.g., probationary period or casual employment).
 
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P


  Past service A period when you worked for your employer before your employer joined the plan. You may be eligible to buy past service.
 
  Pension adjustment The value Canada Revenue Agency (CRA) assigns to your pension that has accumulated in a registered pension plan during a calendar year. Your pension adjustment is only used to determine your RRSP room for the following calendar year.
 
  Pensionable salary Portion of your salary used to calculate pension contributions, highest average salary and purchase-of-service costs.
 
  Pensionable service The actual time you work while contributing to the plan or are deemed to have contributed. This may include service you’ve purchased or transferred from another plan.
 
  Plan administrative agent British Columbia Pension Corporation. The corporation provides professional pension services to the plan. One of Canada’s largest pension service providers, the corporation serves the largest public sector pension plans in British Columbia, representing more than 600,000 members and their employers. Services include providing plan information to members and employers, managing contributions and member records, paying pensions, and providing policy, financial and communication services to the board.
 
  Plan administrator Municipal Pension Board of Trustees. The board of trustees is responsible for the administration, management and oversight of the plan. The board may delegate investment or administrative services to a plan agent, but ultimately it has a fiduciary duty toward the plan’s members and other beneficiaries. This means the board is required to act in the best interests of plan members and any other person to whom a benefit is owed.
 
  Plan investment agent BC Investment Management Corporation (BCI). BCI provides investment management services for the plan’s funds. This includes managing investments and loans. BCI also provides policy advice, strategic communications advice and financial modelling services.
 
  Pre-retirement death benefit A benefit paid by the pension plan to your beneficiary(ies) if you die before retiring.
 
  Purchase of service Buying back eligible periods of pensionable and contributory service to increase your future pension.
 
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R


  Reduced pension If you apply for a pension on or after your earliest retirement age, but do not meet the age and contributory service requirements for an unreduced pension, your pension (and bridge benefit, if applicable) will be reduced.
 
  Retired member A person receiving a pension from the plan; this includes a person who receives a pension following the death of a member.
 
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S


  Shift worker If “shift worker” is defined in a collective agreement, that definition applies. Otherwise, if your employer’s normal operations during a 24-hour cycle are broken into two or more adjacent work periods, or shifts, each of them representing a full day’s work, you are a shift worker. For example in a hospital, some shift workers work from 8 a.m. to 5 p.m. and the next group of shift workers work from 5 p.m. to midnight.
Regular work during daytime hours on regular workdays is not shift work. For example, if your employer’s hours are from 9 a.m. to 5 p.m., you are not a shift worker. If you are unsure whether you are a shift worker, check with your employer.
 
  Shortened life expectancy If, before retirement, you have a medically certified terminal illness or disability likely to considerably shorten your life, you may choose to convert your pension, or part of it, to a payment or series of payments for a fixed term.
 
  Single life option A monthly pension guaranteed to be paid for only your lifetime.
When you retire, you can select a pension option guarantee of 5, 10 or 15 years for a beneficiary. This means if you pass away within the guarantee period, your pension for the remainder of the guarantee period is paid to your beneficiary as a pension or lump sum.
 
  Spouse Your spouse is someone you are married to and have not been living separate and apart from for a continuous period longer than two years, or someone you have been living with in a marriage-like relationship for at least two years.
 
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T


  Temporary annuity An additional monthly payment you may purchase to increase your monthly pension payments until you turn 65 or die, whichever comes first.
The annuity cost lowers the amount of your lifetime pension.
 
  Termination of employment You no longer work for your employer. Exceptions are if you are on layoff or if you leave one employer that participates in the plan and participate with a new employer within a month.
 
  Totally and
permanently
disabled

Suffering from a mental or physical condition that prevents you from engaging in any employment for which you are reasonably suited (by virtue of your education, training or experience) and can reasonably be expected to last for the remainder of your lifetime.

 
  Transfer agreements or reciprocal transfer agreements An agreement between pension plans that allows you to transfer your eligible service from one pension plan to another.
 
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U


  Unreduced pension A pension (and bridge benefit, if applicable) with no reductions included in the pension formula.
 
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V


  Vested Once you have made a contribution to the pension plan you are vested. This means you will be entitled to receive a pension based on the defined benefit formula.
 
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Y


  Year’s maximum pensionable earnings (YMPE) A salary limit set by the federal government each year to determine the maximum annual contributions workers make to the Canada Pension Plan. It is used as part of the pension formula to calculate your contributions and retirement benefit earned before January 1, 2022, for members in group 1 and 5. It continues to be used to calculate pension benefits for members in group 2 and for the bridge benefit for members in groups 2 and 5.
 
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