This section provides a general introduction to Pension Credit and includes the following topics:
What is Pension Credit?
Pension Credit is the measurement in total number of years, months and days that
- a member has contributed to the PSPP
- an employer has contributed to the PSPP on behalf of the member, if applicable, and
- a member has acquired through the
- purchase of additional pension credit, or
- transfer from another Registered Pension Plan.
Calculating Complete Months for Pension Credit
For purposes of calculating the pension amount, pension credit is determined on the basis of complete months. Any partial months are calculated as follows.
|When any part of the month is...||Then the partial month is...|
|less than 15 days||Disregarded.|
|15 days or more||Considered a month.|
Communicating pension credit to members
This section describes how members receive information about their pension credit on the Annual Pension Statement and includes the following topics:
Plan Membership and Pension Credit dates
On the Annual Pension Statement, the member will see two dates under the Personal Data section:
Plan Membership Date: the date the member enrolled in the PSPP, and Pension Credit Date: the date from which the member's pension credit is measured.
These two dates differ from one another when the member
- takes an unpaid Leave of Absence and elects not to contribute or buy back the credit, and/or
- purchases or transfers eligible past service, and/or
- works less than full-time during any period of membership.
Pension credit is the total number of years and months, that the member (or the employer on the member's behalf) contributed to the PSPP. The total includes any credit
- transferred into the PSPP from another pension plan,
- purchased, or
- any period when the member was eligible for long-term income protection (LTIP).
If the Pension Credit Date is earlier than the member's Plan Membership Date, then the pension credit has been adjusted to reflect credit that the member purchased or transferred into the Plan.
If the Pension Credit Date is later than the member's Plan Membership Date, then the pension credit has been adjusted to reflect period(s) when the member may have
- worked on a less than full-time basis, and/or
- did not pay for an unpaid Leave of Absence.
Unreduced Early Retirement: Pension Credit Date
In all cases, the Pension Credit Date is the date used to determine a member's eligibility for pension benefits; e.g., Unreduced.
Pension credit for members who work less than full-time
This section describes how pension credits are determined for members who work less than full-time and includes the following topics:
- What is Less than Full-Time?
- Regular part-time ratio
- Moving from full-time to part-time or vice-versa
- Buyback: Non-contributory service, and
- Phased Retirement as part-time employment
What is Less than Full-Time?
Less than Full-Time applies to members who either
- are regular part-time employees (i.e. work fixed hours on a regular basis), or
- work on an irregular or seasonal basis.
Regular part-time ratio
- is the percentage of hours worked by a member who works less than full-time compared to the equivalent regular full-time position, and
- is used to calculate the member's contributions and pension credit.
Moving From full-time to part-time or vice-versa
A member's pension credit will be affected if a member goes from full-time to part-time or vice versa.
When members are considering moving from full-time to part-time status or vice-versa, the employer must inform
- the members of how this will affect their pension credit date, which in turn will affect
- the members' early retirement date
- the amount of pension they will receive,
- the member's eligibility for insured benefits after retirement, and
- OPB of the members' employment status change to make sure their pension credit can be calculated accurately.
Buyback: Non-contributory service
If a member wishes to buy back non-contributory service for a period of part-time employment, he/she may buy back only the period of part-time employment up to his/her RPT (regular part time) ratio.
Important: The member cannot buyback full-time credit for a period of part-time employment.
Pre-retirement Part-time Employment
Pre-retirement Part-time Employment occurs when a member is approved to work part-time hours for a period leading up to retirement.
During this period, the member may continue to earn credit in the PSPP as if working full-time. (Section 25, PSPP). For details, contact OPB.
Significance of pension credit on member's pension
This section describes the significance of Pension credit on determining a member's pension benefit and includes these topics:
- What Pension Credit influences
- What is Vesting?
- Pension benefit payable from age 65, and
- Eligibility for early unreduced pension.
What Pension Credit influences
Pension Credit influences a member's
- the amount of pension, termination or death benefit,
- eligibility for early unreduced pension, and
- eligibility for insured benefits after retirement.
What is Vesting?
Vesting describes a member's entitlement to a pension benefit from a registered pension plan. Members are considered immediately vested upon joining the PSPP. In other words, a member becomes entitled to pension benefits as soon as they join the plan, subject to small pension rules.
Pension benefit payable from age 65
Pension Credit is a significant factor in the calculation of a member's pension benefit and forms part of the pension formula as described below:
|Basic pension: (2% x average annual salary)||×||Number of years and months of pension credit||−||CPP integration: (0.7% of average annual salary up to average YMPE)||×||Pension credit from 1966 (max 35 years)|
The purchase of Pension Credit may help a member qualify for an unreduced early retirement provision.
See Unreduced Early Retirement for more information regarding Early Retirement provisions.
Eligibility for early unreduced pension
A member is eligible for an early unreduced pension under one of the PSPP’s early retirement provisions, provided the correct combination of age and pension credit is met.
This table summarizes the three possible provisions for meeting this eligibility.
|PSPP Provision||Combination of Age and Pension Credit|
|Factor 90||Member's age + Pension Credit = 90 years (at least)|
|60/20||Member's minimum age 60 + minimum 20 years of Pension Credit|
|OPP 50/30||OPP officer minimum age 50 + minimum 30 years of Pension Credit|
|Factor 85||OPP civilian member's age + Pension Credit = 85 years (at least)|
Eligibility for purchasing past service: buybacks & transfers
This section describes the types of prior employment or service eligible for buyback or transfer and includes these topics:
Types of eligible employment
The following types of prior employment or service may be eligible for a buyback or transfer:
- past service with an OPS employer
- service transferred into the Plan under the MOPPS Transfer Agreement or a Reciprocal Transfer Agreement, and
- membership in another pension plan registered in Canada.
See Buybacks and Transfers for details regarding purchasing past service under a buyback or a transfer arrangement.
If there are any questions regarding the eligibility or type of credited service the member wishes to purchase, employers should