Introduction to retirement
Learn about the factors affecting the amount of your lifetime monthly pension from the plan.
There are many things to consider when planning your retirement – from when to retire to which pension option is best for you and your family.
Learning about your options will help you make these important decisions. Talking with an independent financial adviser can also help you determine your financial needs in retirement and identify other potential sources of retirement income. These can include your own personal savings, as well as Canada Pension Plan and old age security benefits.
When you can start your pension
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 the earliest age you can retire is 55.
Your pension may be reduced if you retire before your normal retirement age and do not meet the criteria for an unreduced pension.
A monthly pension for your lifetime
You will receive a lifetime monthly pension when you retire. This is the amount of money the plan pays you every month for the rest of your life.
The amount of your monthly pension payment is based on your years of pensionable service and the average of your highest four or five years of salary. The amount is also determined by the pension option you choose at retirement.
Choosing a pension option
When you apply for your pension, one of the most important decisions you will make is choosing your pension option. Your choice will determine the amount paid to you each month, and to your spouse or beneficiaries after your death.
For example, you can choose a pension option with a guarantee period. This means that after you die, your spouse or beneficiary will receive a pension for a defined period (such as with a single life guaranteed 15-year option) or for your spouse's lifetime (such as with a joint life 100 per cent option). These pension options reduce the amount of your monthly pension payments to reflect the likelihood that your pension will be paid for a longer period.
The pension formula provides most members (including all group 1 members) a basic option of a single life pension with no guarantee. Choosing a different option reduces your monthly payment. For members who are employed in group 2 or 5 on or after January 1, 2022, the basic pension option will be a single life pension with a 10-year guarantee. This provides higher monthly payments for any option than if the basic option were a single life pension with no guarantee.
No matter which pension option you choose, you will receive a lifetime monthly pension payment.
What happens after you die
Depending on the pension option you choose at retirement, after your death the plan may continue to pay:
- A monthly pension to your spouse (if you have one at retirement) for their lifetime
- Pension benefits to another beneficiary(ies)
- A lump-sum payment to your estate or an organization you have named as your beneficiary