Termination Of Membership Before Retirement print

Your membership in the Plan terminates on the earliest of the following: 

• your date of death;
• your retirement date;
• your break in service date, which occurs at the end of the second consecutive Plan year for which no earnings were reported to the Plan on your behalf; or
• the date following your termination of employment, when you transfer the commuted value of your pension out of the Plan.

You will have two or three options (dependent on your age on termination) to choose from with respect to your pension from the Plan if you terminate membership before you retire.

Immediate Pension

If you are eligible to retire in accordance with the requirements described on pages 9-11, then you can start receiving your pension on the last day of the month following the month in which you terminate. Your pension would be calculated in accordance with the method described on page 7.

Deferred Pension

If you have not reached age 69 when you terminate membership, you may defer starting your pension to anytime between the ages of 55 and 69. If you meet the requirements set out on page 10 you may commence your pension as early as age 50. Once you elect to commence your pension, it would be calculated in accordance with the method described on page 7.

Transfer to a Locked-In Arrangement

If you are less than age 55 when you terminate membership, you may elect to transfer the commuted value of your pension, including the amount in your employee contribution account, to:

• an approved, locked-in vehicle, such as another registered pension plan or a locked-in RRSP, or
• purchase a deferred life annuity from a Canadian life insurance company.

How the commuted value is calculated

In simple terms, the commuted value is the value today of your pension payable at age 65. For example, if you are age 40 and have earned a monthly pension of $500, the commuted value is the amount of money that you would need to invest today for 25 years (between age 40 and age 65) in order to provide you with a $500 per month lifetime pension at age 65. The calculation also factors in mortality (i.e., the probability of you living). The commuted value is highly sensitive to your age and current interest rates. The older you are, the larger the amount of money you would need to invest, and the higher the level of current interest rates, the lower the amount of money you would need to invest. The interest rates that are used to calculate the commuted value are set by the Canadian Institute of Actuaries and are subject to change monthly.

Factors to consider in choosing your option at termination

If you have terminated your participation in the Plan and wish to obtain the highest value possible from the Plan, it is very important to understand that an early retirement pension paid from the Plan has a much greater value than the commuted value of your pension payable at age 65. If you are in good health and are not concerned about dying prior to retirement, you may wish to leave your pension in the Plan and retire at age 55. By doing so you do not lose the value of the early retirement factors which the Plan provides - the commuted value of your pension payable at age 55 is much higher than the commuted value of your pension payable at age 65. As mentioned above, the commuted value of your pension is calculated assuming you elect to commence your pension at age 65 and therefore does not include any provision for the Plan's early retirement rules.

The Trustees recommend that, before making your choice of whether or not to transfer the commuted value of your pension from the Plan, you consider obtaining independent legal and financial advice concerning your rights and the effect of your choice from an advisor familiar with all of your personal circumstances that may affect your decision.

The Plan Administrator will not provide you with an estimate of your commuted value until you have actually terminated your employment with your employer.

Examples of the commuted value, at age 65, of a $1* per month pension at different interest rates and ages.