Pension Formula and Eligibility

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When you're planning for retirement, it's important to know how the pension formula is calculated and whether you're eligible to receive an unreduced pension.

Pension Formula

If you’d like to estimate your pension, you can log in to MyPension to get an estimate. However, below is the formula used to calculate your pension.

Your five-year average pensionable salary, pensionable service, and five-year average YMPE are used to calculate your pension at retirement before any applicable reductions.

2.0% of Five-Year Average Pensionable Salary
multiplied by
Pensionable service before 1966
plus
1.4% of Five-Year Average YMPE
multiplied by‚Äč
Pensionable service after 1965
plus
2.0% of Five-Year Average Pensionable Salary Above the Average YMPE
multiplied by
Pensionable service after 1965

Your five-year average pensionable salary may be limited by the maximum pensionable salary (or salary cap) in accordance with the Income Tax Act. The monthly salary cap for the current and previous five years dating back to 1992 can be found on the Contribution Rates page.

Pension Eligibility

You are eligible for a pension when you are 55 years of age or older and have:

  • Five years of pensionable service after August 31, 1992, or
  • Five years of pensionable service that includes a period of pensionable service in each of the 1991-92 and 1992-93 school years, or
  • Ten years of pensionable service.

Start of Pension
You can begin receiving your pension (after your application has been processed) from the later of the first of the month following:

  • Your 55th birthday, or
  • The termination of your last teaching contract, or
  • The last accrual of pensionable service with ATRF, or
  • The last substitute service purchased.

Unreduced Pension
If you have enough service to be eligible for a pension, you can receive an unreduced pension, assuming the sum of your age and pensionable service is at least 85 (often referred to as the age-plus-service index of 85 or the 85 factor), or you are age 65 (normal retirement).

Reduced Pension
If, on the other hand, you have enough pensionable service to be eligible for a pension, but you retire before you can receive an unreduced pension (as outlined above), your pension will be reduced to the lesser of the following two calculations:

  • 2% for each year or portion of a year that your age-plus-service index is less than 85, or
  • 2% for each year or portion of a year that your age is less than age 65.

The maximum reduction is 20%.

Examples of Reduced Pensions
A plan member who is age 55 with 5 years of pensionable service would have an index of 60. There would be a 20% reduction in pension (25 years short of index, and only 10 years short of age 65; therefore, 10 years multiplied by 2% = 20% reduction).

A plan member who is age 60 with 22.5 years of pensionable service would have an index of 82.5. There would be a 5% reduction in pension (2.5 years short of index, and 5 years short of age 65; therefore, 2.5 years multiplied 2% = 5% reduction).