Reduced Pension

If you're not eligible for an unreduced pension by the time you want to retire, you can take a reduced retirement pension when you're at least 50 years old.

Immediate reduced pension

An immediate reduced pension is when you stop working in education and begin collecting your pension the following month. Immediate pensions are reduced by:

  • 2.5% for each point you're away from the 85 factor; or 
  • 5% for each year you're under age 65, whichever is less.

Example

Let's assume you want to start your pension immediately after retiring at age 52 with 30 years of credit.

52
age
+ 30
qualifying years
= 82
qualifying factor

Since you're three points shy of your 85 factor (85 - 3 = 82), your pension is then reduced by 7.5% (2.5% x 3).

$51,000
basic annual pension
- 7.5%
percentage of reduction by point
= $47,175
basic annual pension after reduction

Deferred pension

If you don't begin your pension the month after you stop working, your basic annual pension will be reduced. The amount of the reduction depends on when your last employment occurs, and the age you are when it does.

  • Before January 1, 2018, regardless of age – the reduction is 5% for each point you’re under your 85 factor or age 65, whichever is less.
  • On or after January 1, 2018, and age 50 or older – the reduction is 2.5% for each point you're under your 85 factor or age 65, whichever is less.

Example

Now let's assume you end your employment in education at age 52 with 30 years of credit but you don't want to start your pension immediately.

If your last day of work occurred before January 1, 2018:

52
age
+ 30
qualifying years
= 82
qualifying factor

Since you're three points shy of your 85 factor (85 - 3 = 82), your pension is then reduced by 15% (5% x 3).

$51,000
basic annual pension
- 15%
percentage of reduction by point
= $43,350
basic annual pension after reduction

If your last day of work occurs after January 1, 2018:

52
age
+ 30
qualifying years
= 82
qualifying factor

Since you're three points shy of your 85 factor (85 - 3 = 82), your pension is then reduced by 7.5% (2.5% x 3).

$51,000
basic annual pension
- 7.5%
percentage of reduction by point
= $47,175
basic annual pension after reduction

NOTE: If you defer the start of your pension, your pension will reflect changes in the cost of living from the time you left employment in education to the time you begin collecting your pension.