Changes to temporary annuities

Learn more about temporary annuities, including new options that will give you flexibility if you want to take an advance on your lifetime pension.

Changes to temporary annuities

A temporary annuity allows you to “take an advance” on your lifetime pension if you want or need extra income before age 65. Choosing to take a temporary annuity means your lifetime pension after age 65 will be permanently reduced.

Choosing a temporary annuity option:

  • May help you meet the initial expenses of retirement, such as paying off a mortgage before you turn 65
  • Would increase your monthly pension payments until age 65
  • Can help lower your taxable income after age 65, if you have significant taxable assets such as RRSPs

New temporary annuity options beginning January 1, 2022

Previously, only the full temporary annuity option, which is equivalent to the maximum old age security amount available at the time you retire, was available. Now there are two new options: a half and a quarter of the old age security amount available. These offer you extra income before age 65 and a smaller permanent reduction in your lifetime pension after age 65.

Estimates for the half and quarter options will be available in late November and will apply to pensions on or after January 1, 2022. Use the personalized pension estimator in My Account in late November to see how a temporary annuity would affect your basic lifetime pension. It helps you determine what your pension amount will be before and after age 65.

Temporary annuity options

A temporary annuity (TA) allows you to take a monthly "advance" on your lifetime pension. Here is an example for a member in the general membership (non public safety) and whose lifetime pension is $2,100.

Current option
Pie chart: full $610
The full TA is equivalent to the maximum old age security account
Two new options will soon be available:
Two pie charts: 1/2* $305 and 1/4 $153
* Estimate available in late November for a
January 1, 2022, start date.

These smaller portions may be more affordable.

Important things to keep in mind about a temporary annuity:

  • If you take a temporary annuity option during early retirement (any time before age 65), your lifetime pension will be reduced. The younger you are when you retire, the bigger the impact on your pension after age 65.
  • A reduced lifetime pension might have a significant impact on your spouse or dependants.
  • A temporary annuity is based on the maximum old age security benefit. Amounts may change from year to year in the old age security, but your payments will remain stable from your retirement date onwards.

What's involved in choosing an optional TA

Starting in late November, view the new TA options by logging in to My Account and using the personalized pension estimator
Finger pointing to My Account
The personalized pension estimator shows the TA options available to you and how they affect your pension
At retirement, if you decide to take a TA, you can choose from the temporary annuity options available to you
Three pie charts: full, 1/2 and 1/4 options
The younger you are when you retire, the bigger the impact on your pension
Before age 65, receive your monthly "advance" in addition to your lifetime pension payment
Coin falling into open hand
Your lifetime pension after age 65 will be permanently reduced to make up for the TA you receive before age 65