If you’re working as an occasional teacher, or thinking about switching from full-time work, here are four key facts you need to know about your pension.
Fact 1: Only 10+ days earns a year toward your 85 factor
To gain one qualifying year in the pension plan, you need to work more than 10 days in the school year. Qualifying years, combined with your age, determine when you’re eligible to receive an unreduced pension.
Once you reach your 85 factor (age + qualifying years = 85), you can retire with an unreduced pension. Because of changes in the pension plan, there are different rules for measuring your qualifying years.
|For the school years||Days of work needed for one qualifying year|
|After December 31, 1996||More than 10 days|
|September 1, 1990 to December 31, 1996||More than 20 days|
|Before September 1, 1990||Any credit|
There’s an important exception to how we measure qualifying years. If the first or last year of your career is a partial year, you’ll receive credit for only the portion of the year worked. For instance, if you began your career halfway through the school year, you would receive one half-year of qualifying service for that year of teaching.
Fact 2: Credit is given for actual time worked
Credit is the actual time you contribute to the pension plan. When you work less than full time, you receive credit for only the time you work and contribute to the plan. For example, if you work only 11 days during the school year, you'll receive only 11 days of credit for that year. If you work half days, you'll receive 0.5 days of credit for every day you work.
Credit is important because it, together with your average salary, is used to calculate the amount of your pension.
Your collective agreement specifies such things as required work days in a year, rates of pay by job and normal hours of work that can determine how much credit you get.
If you receive an hourly rate of pay or a predetermined lump-sum payment for completing a task or assignment, contact us to determine how it could affect your pension.
Fact 3: Occasional teaching can sometimes lower your pension
If you're close to retirement and teaching on a part-time contract, supplementing your income with an occasional teaching assignment may reduce your pension. In some instances, this can result in hundreds of dollars less in pension per year.
The rate of pay for occasional teaching can be significantly less than the rate for part-time contract work. Both rates are used when determining your annual rate during a school year in which you work both occasionally and on contract. This blending of your rate of pay could lower your average best-five years' salary, which would result in a smaller pension.
If you're nearing retirement, contact us before accepting any occasional teaching job to see how it could affect your pension.
Fact 4: Consider inflation protection vs. qualifying years
Are you considering returning to work as an occasional teacher after a lengthy break in your career? If yes, get a pension estimate first.
By returning to work, you'll add pension credit and qualifying years to the service you left in the plan. Adding qualifying years will help you reach your 85 factor earlier. However, there are other considerations.
Returning to work can eliminate the inflation protection that increased your deferred pension. In some circumstances, the inflation increases could be worth more than the extra credit you'll accumulate when you return to work.
On the other hand, returning to work after a long time away may have a positive impact on your pension. Your pension will be recalculated based on plan provisions in effect when you retire or leave the plan. This could, for example, lower the early retirement reduction to 2.5% from 5%.