Small benefit refunds
You may be eligible to receive a small benefit refund instead of a lifetime monthly pension if the commuted value of your pension benefit is less than a specific amount.
You are eligible for a small benefit refund if the commuted value of your pension benefit is less than 20 per cent of the year’s maximum pensionable earnings (YMPE) in the year you apply for your pension.
For example, in 2017 the YMPE was $55,300. If you retired in 2017 and the commuted value of your pension benefit was less than 20 per cent of the YMPE ($11,060 or lower), you were eligible to receive the commuted value of your pension benefit as a lump-sum cash payment, rather than as a monthly pension over your lifetime. The YMPE changes each year, so the threshold amount will change annually.
When you apply for your pension, we'll let you know if you may be eligible for a small benefit refund on your pension estimate. If you are eligible and you'd like to receive an estimate of the amount of your small benefit refund, please indicate this on your option selection page and we'll send you a small benefit refund estimate.
Please note that we cannot provide you with your small benefit refund estimate until your employer sends us your Employee Information at Termination/Retirement data. For most active members, this will not be until after your pension effective date. Once we have the data, if you requested a small benefit refund estimate when applying for your pension, we will tell you if you are eligible for the refund and, if so, its amount.
You must then choose between receiving either:
- The small benefit refund as a single payment
- The small benefit refund as a transfer to an RRSP
- any amount over your limit would be payable as cash
- A monthly pension payment
If you choose to receive a monthly pension payment, there may be a delay before you receive your first pension payment because we may not be able to process it as quickly as with other pension options.
You may wish to speak with an independent financial adviser before making your final decision.