A commuted value is the lump sum you would need today to replace your future pension. It depends on a number of factors, including:

  • your age,
  • your earned pension benefit,
  • your qualifying years of service, and 
  • bond yields.

You can transfer your pension's commuted value (CV) to a locked-in retirement account (LIRA) to provide you with a life annuity or life income fund (LIF) starting no earlier than age 50.

You must terminate employment and request a transfer before you're eligible for an immediate pension. This means you can request a transfer up until the earlier of:

  • the month before you turn 50; or
  • the date on which you're approved for a disability pension.

Note: If you ceased employment in education before July 1, 2001, different deadlines and eligibility rules apply. Please contact us for more information on your benefit options.

How do changes in bond yields affect the commuted value?

The interest rates and inflation rates used in calculating the commuted value of your pension are determined by the yields of real return Government of Canada bonds. Real return bonds are long-term bonds that pay the holder of the bond a specific sum of money, at a specific interest rate, plus the rate of inflation. When the yields of those bonds increase, the commuted value decreases; when they decrease, it increases.

Example

Bill is 49 years of age and has accumulated 26 years of credit. With an average salary of $75,000, the commuted value of his pension can vary by more than $105,000 depending on bond yields at the time of the transfer.

Bill's commuted value transfer at different rates
Rates determined from bond yields Commuted value transfer
1.75% $575,000
2.25% $520,000
2.75% $470,000