Guide for plan members

Municipal Pension Plan is committed to helping you make the most of your pension. This guide is a provincial requirement. Please use the links at right to explore the topics most relevant to you.


When you can retire


The age at which you apply for your pension will affect your monthly lifetime pension payment.

As required by the Income Tax Act, you must begin receiving your pension no later than the end of the year in which you turn 71, even if you are still working.

Your normal retirement age and earliest retirement age   depend on whether you work in public safety. If you work in public safety as a police officer or firefighter, your normal retirement age is 60 and your earliest retirement age is 50.
 

For all other members of BC's Municipal Pension Plan, your normal retirement age is 65 and your earliest retirement age is 55.

If you are an inactive member,   you may apply to begin receiving your pension as early as:
 
  • Age 55 for all other members of the plan
  • Age 50 for police officer or firefighters in member group 2 or 5

If you are retiring before your normal retirement age, your age at retirement and years of contributory service will determine if you are eligible for an unreduced pension.

Qualifying for an unreduced pension

You will receive an unreduced pension if, at the date of your retirement, you are:

  • 55 (50 for group 2 and 5 members) or older and your age plus years of contributory service   equals 90 or more (80 for group 2 and 5 members)
  • 60 (55 for group 2 and 5 members) or older, with two or more years of contributory service
  • 65 (60 for group 2 and 5 members) or older, with any amount of contributory service

For example, if you are 57 and have 33 years of contributory service, you are eligible for an unreduced pension because your age plus years of contributory service equals 90 or more.

Qualifying for a reduced pension

You will receive a reduced pension,   if, at the date of your retirement, you are:
 
  • Over 55 (50 for group 2 and 5 members) but under 60 (55 for group 2 and 5 members) and your age plus years of contributory service is less than 90 (80 for group 2 and 5 members)
  • Over 60 (55 for group 2 and 5 members) but under 65 (60 for group 2 and 5 members), with fewer than two years of contributory service

For example, if you are 57 and have 20 years of contributory service, you are eligible for a reduced pension. If you choose to retire, you will receive a reduced pension because your age plus years of contributory service is 77, which is lower than the required 90 for most members or 80 for group 2 and 5 members. 

To learn more about how the changes may affect your pension, sign in to My Account and use the Personalized Pension Estimator to find out what your monthly pension might be based on your salary and years of service.


How we calculate your pension


Your pension is based on your years of pensionable service   and the average of your highest five years of salary.
 

Retiring at or after the normal retirement age

If you retire once you are age 65 or older, or age 60 or older if you're in Group 2, we calculate your pension using the following formula:

Lifetime pension formula: all plan members except those in Group 5

If you are a police officer or firefighter in Group 5 and retire at age 60 or older, we calculate your pension using the following formula:

Lifetime pension formula: Group 5

 

Retiring before the normal retirement age

If you retire before age 65, or age 60 if you're in groups 2 or 5, your pension will include a temporary monthly payment called a bridge benefit. This bridge benefit covers the difference between your early retirement income and the additional income you may receive after age 65 through Canada Pension Plan and old age security benefits. The bridge benefit ends when you turn 65 or die, whichever happens first.

We calculate your pension and bridge benefit using the following formula:

Lifetime pension formula: all plan members except those in Group 5

If you are a police officer or firefighter in Group 5, we calculate your pension and bridge benefit using the following formula:

Lifetime pension formula: Group 5

 

Factors that affect your monthly pension payment

These basic pension formulas are based on a single life pension option   with no guarantee. The monthly pension payment you receive will depend on several other factors, including:
 
  • Your age when you retire, which may result in a reduced pension
  • The pension option you choose to protect a beneficiary  
  • The premiums you pay for health care coverage through the group benefit plan
  • Any legally required deductions such as income tax

After you retire, your monthly pension payment may increase if there is an annual cost-of-living adjustment (COLA). This adjustment is added to the basic lifetime portion of your pension. The COLA is also applied to the bridge benefit and the temporary annuity portion of your pension while you are receiving them.

COLA is based on the Canadian consumer price index and is applied to your pension in January each year if the Municipal Pension Board of Trustees determines that sufficient funds are available in the plan’s inflation adjustment account.

Although future COLAs are not guaranteed, once you have received the adjustment it becomes part of your lifetime pension for all subsequent years.


Calculating your reduced pension

If you decide to retire early and you do not meet the criteria for an unreduced pension, your pension will be reduced. The bridge benefit is also proportionately reduced.

The amount of your pension will be reduced based on a combination of your:

  • Age when you end your employment
  • Contributory service  
  • Age when you start receiving your pension

If you have at least two years of contributory service, your pension will be reduced by three per cent for each year that one of the following applies:

  • You retire before age 60 (55 for group 2 and 5 members)
  • The sum of your age plus years of contributory service is less than 90 years (80 years for group 2 and 5 members)

The lesser of these two circumstances will be used to calculate your pension reduction.

If you have less than two years of contributory service, your pension will be reduced by three per cent for each year you retire before age 65 (60 for group 2 and 5 members).

The three per cent reduction rate also applies when you end employment, if you meet the minimum age requirement:

  • 55 (50 for group 2 and 5 members) 
  • 50 (45 for group 2 and 5 members) and you have at least 10 years of contributory service

If you do not meet the minimum age requirement, your pension will be reduced by five per cent per year. 

Reductions are prorated by month for partial years.

If you left your employer before September 30, 2015, please contact the plan as different rules may apply.


Naming beneficiaries


Your pension is a secure, lifetime income source after you retire. In addition to the financial security it provides you, your pension can also provide financial care for your beneficiaries   after your death. Your beneficiaries can be family members, friends, charities or organizations that are important to you.
 

If you die before you retire, the plan will pay a pre-retirement survivor (death) benefit to your beneficiary(ies).

If you die after you retire, the plan may pay pension benefits to your beneficiary(ies) based on the pension option you chose when you retired.

Your pre-retirement beneficiaries are entitled to a portion of your pension should you die before retirement, but not after. You may name them again or another beneficiary(ies) when you apply for your pension.

It’s a good idea to talk with an estate planner, lawyer or other adviser to determine the best choice for you when it comes to naming beneficiaries.

There are two default beneficiaries: your spouse or your estate.

Your spouse

Your spouse is automatically your beneficiary when you die. Your spouse is either the person you are married to or in a common-law relationship with for more than two years.

However, your spouse can choose to give up their right to the pre-retirement survivor (death) benefit   or pension benefit they would normally receive when you die. They do this by signing a waiver.
 

If you do not have a spouse or if your spouse has given up their right to a pre-retirement survivor benefit or pension benefit, you can name other people, charities or organizations as your beneficiaries.

You may also name a trust for a beneficiary. This is helpful in cases where a beneficiary is a minor at the time of your death or if you have a beneficiary who is not able to manage their own finances.

You can name one or more alternate beneficiaries for each beneficiary. This means that if a beneficiary dies before you, the alternate beneficiary(ies) will receive the pension benefit when you die.

Your estate

Your estate is automatically your beneficiary when you die if you do not have a spouse and have not named a beneficiary. Your executor will be responsible for distributing the pension benefit. If you do not have a legal will, an administrator will be appointed.

You can also name your estate as your beneficiary. If you do, the pension benefit will be paid to your estate and distributed according to the instructions in your will.

Sign in to My Account to view your current beneficiary information.


Preparing for retirement


About a year before you plan to stop working, it’s a good idea to begin preparing for retirement – gathering together some of the documents you’ll need when you apply for your pension and taking the time to decide which pension option is best for you.

One year before you retire

□ Sign in to My Account and use the personalized pension estimator to explore your pension options

□ Consider whom to name as the primary beneficiary for your pension; if you are married or in a common-law relationship, your spouse is automatically your primary beneficiary

□ Consider whom to name as alternate beneficiaries

□ If you are separated from a former spouse and they have a claim to a portion of your pension, submit your complete, signed separation agreement or registered court order to the plan so we know how to divide your pension benefit

□ Apply to transfer your service from another pension plan, if applicable (you must apply within 30 days of retirement in addition to meeting other deadlines for transferring service)

□ Apply to buy service for an approved leave, if applicable (you must apply within 30 days of retirement in addition to meeting other deadlines for buying service)

□ Talk with an independent financial adviser to determine which pension option is best for you and your situation

□ Submit documents to BC's Municipal Pension Plan to confirm your age and identity and, if applicable, your spouse’s age and identity

□ If you have changed your name, submit documents to the plan to show proof of your new legal name

□ If you have not yet informed the plan that you are married or in a common-law relationship, update your personal information in My Account

□ Contact Service Canada for information about your eligibility and the application process for Canada Pension Plan and old age security benefits

90 days before your pension-effective date

The earliest you can submit your pension application is 90 days before your pension-effective date (the date you start receiving your pension). We encourage you to apply for your pension as soon as you are eligible to do so, and no later than 30 days before your pension-effective date.

Sign in to My Account to apply for your pension online.


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