Taking a Retirement Transition Package
If you are actively teaching and thinking about applying for your pension, then returning to teach under a new contract, there are some things you need to keep in mind.
If you and your employer are considering a retirement transition package, it’s important that you follow the necessary steps in the correct order.
- Confirm directly with your employer that you are accepting their retirement transition package before their deadline.
- You must then apply directly to ATRF for your pension before your new teaching contract begins.
- Begin your new contract while receiving your pension.
If you do not apply for your pension before your new contract begins, your pension application will be rejected, you will be required to contribute to the plan under your new contract, and you will have to re-apply to receive your pension which will not begin until your new contract terminates.
There are a number of considerations that you should be aware of before accepting a retirement transition package. Teaching while receiving a pension at the same time may have tax implications because your teaching salary and pension payments are both taxable incomes. Since you will have started your pension, you cannot earn additional service under your new contract, which means you will have a lower pension for your lifetime compared to not taking a transition package.
Also, signing a teaching contract after your retirement can impact your pension payments due to the “0.6 rule” that applies to the Teachers’ Pension Plans. If you work under a teaching contract for more than 0.6 of a school year with an ATRF employer while receiving your pension, your monthly pension payment will be reduced dollar-for-dollar by the amount of salary you earn over the 0.6 limit. More information about teaching after retirement can be found on our Returning to Teaching webpage.
If you have questions about how taking a retirement transition package may impact your pension or about returning to teaching after starting your pension, please speak with one of our knowledgeable pension counsellors. You can contact us by sending a message through the Secure Message Centre or schedule an appointment through your MyPension account.