Reduced vs. unreduced pensions

February 25, 2019

The bottom line is a key determining factor when deciding your retirement date. A good place to start is understanding how we calculate your pension, and then deciding if you’re going to collect an unreduced or reduced pension.

Until age 65, your pension is based on:

2% x credit x “best-five” average salary = basic annual pension

Once you hit your 85 factor (your age + years of service = 85) you qualify for an unreduced pension.

Don’t think you want to work that long? Since you’re over 50 you can collect a reduced pension. If you decide to stop working and start collecting immediately, your pension will be 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.

If you haven’t taught since 2017, and want to start collecting now, we use a different reduction formula.

Sign in to your online account and experiment with the Pension Calculator to get an idea of how much you’ll collect, when.

Understanding how Canada Pension Plan (CPP) fits into your financial picture is important too. Learn about the bridge benefit we provide until you turn 65 or start collecting a CPP disability pension.