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Pension definitions

The estimated amount of money needed today to be invested to pay the future benefits you have under the Plan. The actuarial present value is based on assumptions such as interest rates, inflation, mortality, and salary escalation.
The YMPE in each year in the averaging period used to determine your best average earnings for calculation of your pension benefit at termination or retirement. Here is how we determined the 2021 average YMPE for a member who is retiring on January 1, 2022:
YMPE Earnings
2021 YMPE $61,600
2020 YMPE $58,700
2019 YMPE $57,400
2018 YMPE $55,900
2017 YMPE $55,300
Subtotal $288,900
Divide by five $57,780
You can name any person, organization, or your estate as your beneficiary to receive survivor benefits in the event that you do not have an eligible spouse, or spousal benefits have been waived, or you do not have eligible children at the time of your passing. To make an update to your beneficiary information, log in to My Pension Resource and complete the Spousal Declaration and Beneficiary Designation form.

The annual average of your pensionable earnings for the highest 60 consecutive months of service during the last 120 months of pensionable service before your retirement or termination from the Plan. If you worked less than 60 months, your best average earnings will be based on your average earnings as a member of the Plan.

A temporary benefit provided to employees who retire prior to the age when unreduced CPP benefits begin. It is paid when you retire from your participating employer before age 65 (even if you collect an early CPP pension). The bridge benefit is payable until the earlier of age 65 or your passing.

Learn more about the bridge benefit.


The CPP is a contributory, earnings-related social insurance program that is paid by the federal government. It provides a measure of income to contributors and their families upon retirement, disability, and death. For further details, contact Service Canada.

The CRA is the federal regulatory agency that administers the Income Tax Act.

The lump-sum value of your earned pension. The commuted value changes based on factors such as age, life expectancy, inflation and interest rates.

An inflation measure computed by Statistics Canada that calculates the change in prices of a fixed set of commodities purchased by Canadians each month. If the combined cost of these goods goes up, inflation increases. The CPI is used to calculate annual cost-of-living increases for pension benefits, also referred to as “indexing”.

This is the pension benefit earned up to the date of termination of employment, which is calculated at the time of termination of employment but payable at a later date. Learn more about this onleaving your employer.

A pension plan that defines the ultimate pension benefit to be provided in accordance with a formula, usually based on years of service and earnings. WISE Trust is a defined benefit pension plan.

Learn more on the advantages of a defined benefit pension plan.

Retirement before you reach age 65, in which you may receive a reduced pension or an unreduced pension.

Learn more about this on the retirement page.


An eligible child includes your natural, adopted, or step child in respect of whom you are acting in the role of a parent and who is:

  • under age 18; or
  • 18 or older but less than 25 and attending full-time, continuous education; or
  • 18 or older and suffers from a physical or mental disability that has prevented them from earning a living since reaching 18 or since your death, whichever occurred most recently.

Eligible spouse means, on the relevant date, either of two persons who are

  • married to each other; or
  • not married to each other but are living together in a conjugal relationship, either:
    • continuously for a period of not less than three years; or
    • in a relationship of some permanence, if they are the parents of a child, as set out in Section 4 of the Children’s Law Reform Act pursuant to subsection 1 (1) of the Pensions Benefit Act.

On termination of employment, the Plan compares 50 per cent of the commuted value of the member’s deferred pension to the total of their contributions plus interest. If the member’s contributions plus interest equal more than 50 per cent of the commuted value of the pension, then that member is entitled to a refund of the difference, called excess contributions.

An independent regulatory agency, an objective of which is to improve consumer and pension plan beneficiary protections in Ontario.

Learn more about them on FSRA’s website.

The Policy, which is approved by the WSIB and the OCEU as Sponsors of the Plan, provides a framework for the financial management of the pension benefits earned under the Plan and the corresponding assets of the trust fund that secure those pension benefits.

A federally legislated act with underlying regulations that outline, among other things, the maximum limits for registered pension plans. The Income Tax Act allows employees and employers to deduct pension contributions from their respective income for tax purposes and sets standards for the benefits a pension plan can provide. It is regulated by CRA.

A method in which pension benefits are adjusted to take into account changes in the cost of living.

A pension plan in which decision making and funding of the benefits is shared jointly by both employees and the participating employer. It’s a pension plan where there is a partnership in the governance of the plan.

The lifetime pension is the amount paid to you for the rest of your life once you retire, inclusive of any further indexation. This amount does not include the bridge benefit, which is paid on top of the lifetime pension up to age 65. Once you reach age 65, the bridge benefit ends and you continue to receive the lifetime pension.

A legislative requirement stipulating that vested entitlements under a pension plan must be used to provide pension payments at retirement and are not available as immediate cash.

A tax-sheltered retirement savings arrangement in which the funds are subject to locking in under pension legislation. Funds in a locked-in retirement savings arrangement cannot be withdrawn prior to the age of 55 and the payment of retirement income from the arrangement must begin no later than the end of the year in which you reach age 71. Examples include annuities, locked-in retirement accounts, life income funds, and other registered pension plans that will accept the commuted value of a deferred pension.

Learn more about this on leaving your employer.


A type of RRSP available to maintain funds that are locked-in as required by pension legislation. These funds must be used to purchase a life annuity or be transferred to a life income fund no later than the end of the year in which you reach age 71.

An employee of a participating employer who is contributing to the Plan or has contributions made on their behalf. Member also includes a former employee of a participating employer who made contributions to the Plan and has either terminated employment or terminated membership in the Plan and (i) retains the right to a deferred pension payable from the Plan or (ii) is receiving a pension payable from the Plan.

This includes the period commencing on the date an employee becomes a member of the Plan until the date the employee terminates the employment that relates to the Plan or terminates membership in the Plan. Any period during which a member was absent from work on a leave of absence, as well as any period of pensionable service transferred into the plan or purchased subject to the Plan’s terms will be included in the calculation of the member’s period of membership. Membership will not be broken for the sole reason that an employee ceased employment with one participating employer and immediately began employment with another participating employer.

An online self-service site for members to log in to view their personal pension details, estimate their pension, request a quote to purchase pensionable service, download forms, tip sheets, the guidebook, and more.

Login to My Pension Resource.

Normal retirement age under the Plan is age 65. The normal retirement age does not compel retirement at age 65, but rather sets the age when unreduced pensions are paid regardless of the years of pensionable service you have under the Plan.

The Workplace Safety and Insurance Board (WSIB), Infrastructure Health and Safety Association (IHSA), Public Services Health and Safety Association (PSHSA), Workplace Safety and Prevention Services (WSPS), Workplace Safety North (WSN), and the Trustees of the Workplace Safety and Insurance Board Pension Plan Fund (WISE Trust).

The deemed value of additional pension benefits purchased for service in previous years. The CRA generally must approve the PSPA before the purchase of additional benefits can be completed and before the purchase can be included in any benefit calculation.

The CRA’s deemed value of the lifetime benefit a member earns during a calendar year under a pension plan, and it affects the member’s RRSP contribution room for the following year.

The pension adjustment is the annual pension amount earned by the member during the year, multiplied by nine, and then the prescribed amount of $600 is subtracted.

The pension adjustment is reported on your T4 tax slip, and your available RRSP contribution room for the following year is reduced by the pension adjustment amount.

Provincial legislation enforced by FSRA, which regulates pension plans in Ontario and determines minimum standards for eligibility, funding, and benefits for Ontario-registered pension plans.

Learn more about the legislation: Pension Benefits Act (PBA).

The basic amount of remuneration actually received for the position held by you, as a member of the Plan, and includes:
  • the amount of benefits that you are in receipt of under the Workplace Safety & Insurance Act (WSIA) for loss of earnings and any amount supplemented by the WSIB up to the maximum of your regular earnings
  • non-bargaining unit lump-sum merit awards
  • earnings if you are receiving long-term disability benefits

Pensionable earnings do not include:
  • overtime pay
  • irregular-hour premiums
  • performance bonuses
  • job differential pay
  • second-language bonuses
  • pay in lieu of vacation or Management Compensation Option
  • any payment in lieu of a benefit provided by your participating employer

Represents the total years, months and days of service during which you or your employer have contributed to the Plan on your behalf. Subject to the Plan’s terms, it includes any pensionable service you have purchased, transferred in, or service during which you were receiving short-term or long-term disability benefits or while you were in receipt of benefits from a claim filed under the WSIA.

If you are a part-time employee, your pensionable service is calculated as a proportion of the pensionable service that an equivalent full-time employee in the same employment category would accrue. Learn more under pensionable service.


A pension that starts before age 65 and is subject to a reduction for starting your pension early. The reduction for starting your pension early means the pension is reduced by three per cent for each year (and any fraction thereof) your retirement falls before the date you would have qualified for your earliest unreduced pension.

Learn more about this on collecting your pension.

This is a savings arrangement available from most financial institutions that accumulates contributions and investment earnings on a tax-sheltered basis.

The annual statement of earnings and deductions provided to employees and to the CRA by the employer.

The annual statement of pension earnings and deductions provided to retirees and to the CRA by WISE Trust.

An unreduced pension is a pension that is not subject to an age reduction. You may receive an unreduced or lesser reduced pension at age 65 or, earlier provided you have qualified under the early retirement provisions of the factor 85 or 60/20 rule.

Learn more about this on collecting your pension.

A term used in the CPP that refers to the earnings on which CPP and Quebec Pension Plan contributions and benefits are calculated. The YMPE is re-calculated each year according to a formula based on average wage levels. The YMPE is published annually by the CRA.

Leaving your employer

Ending your employment before retirement

When your employment ends, your active membership in the Plan also ends. At that point, you’ll need to decide what to do with your pension. Your pension is an important part of your financial future. We recommend that you talk to an independent financial advisor when considering the pension options available when you leave your employer.

Pension options

If you’re under age 55 and not yet eligible for an immediate pension from the Plan when your employment ends, you may have the following options:

Commuted value

What is a commuted value?

The commuted value of your pension is the amount of a lump sum payment, in today’s dollars, estimated to be equal in value to your future pension payments. You may be able to transfer the commuted value to a new employer’s registered pension plan (if applicable) or a locked in retirement arrangement.

When can you transfer the commuted value and what are your options?

If you have terminated your employment before age 55 and are not eligible to retire immediately, you may transfer the commuted value of your pension entitlement to a locked-in savings vehicle.

Once you transfer your commuted value out of the Plan, you’re responsible for the investment of those funds. You’ll receive no further benefits from the Plan. If you were participating in your employer’s group benefits programs at the time you terminated your employment, transferring your pension entitlement out of the Plan may affect your eligibility for post-retirement group benefits as well. Contact your employer’s HR department for more information.

When can’t you transfer the commuted value and what are your options?

You can’t transfer the commuted value of your pension out of the Plan if, on the day you end your employment, you’re:
  • age 55 or older
  • less than age 55, but are eligible to receive a pension under the Plan’s Factor 85 early retirement option

Should you choose a deferred pension or commuted value?

Whether you transfer your commuted value to a locked-in retirement arrangement or leave your entitlement in the Plan, it’s an important decision.

Many choose the security and reliability of a future pension from the Plan with its guaranteed lifetime retirement income. Some prefer to transfer the commuted value of the pension out of the Plan in anticipation of earning a higher retirement income through superior investment performance.

There are important factors to consider related to the benefits and risks of keeping your pension in the Plan or transferring your commuted value into a locked-in retirement arrangement. Carefully consider which option best suits your individual needs and circumstances.

We recommend you talk to an independent financial advisor when considering pension options available when leaving your employer.

Consideration Deferred Pension Option Commuted Value Option
Predictable income The Plan provides you with a guaranteed pension income that is payable for your lifetime, starting on the date you elect to start your monthly pension payments.

Your pension is calculated using a formula. The formula is not impacted by market fluctuations. You will never outlive your pension, regardless of how long you live.
If you purchase an annuity with the funds in your locked-in retirement arrangement, you will receive regular (e.g., monthly) retirement income starting on the date determined in the annuity contract. Your monthly payments will depend on the value of your investments, your age and interest rates at the time you convert your investments into retirement income.

If the investment returns are not large enough, your retirement income may be lower than what you expect, or you could outlive your savings.
When you can receive pension income Your pension is payable monthly beginning as early as age 55. You cannot withdraw money from a locked-in retirement account before age 55, and all funds must be withdrawn or converted to an annuity or a Life Income Fund with payment of your retirement income beginning no later than the end of the year in which you reach age 71.
Survivor benefits Your eligible spouse, at the time of your retirement, is typically considered the primary recipient for survivor benefits (unless they have signed a waiver). Survivor benefits are payable if you pass away before or after your retirement.

Learn more about survivor benefits.
Upon your passing, your eligible spouse will receive a spousal death benefit equal to the value of the assets in the locked-in retirement arrangement.

If you use the funds in your locked-in retirement arrangement to purchase an annuity from an insurance company that includes a survivor benefit, the cost will be more than an annuity that does not include this benefit.
Investment risk The lifetime pension you receive from the Plan is not affected by market fluctuations; the formula of the Plan determines your pension amount. You don’t need to be concerned about whether markets are up or down when you want to retire. You assume all the investment risks and costs as well as rewards. Your retirement income will depend on how well your investments perform and the interest rates in effect at the time you convert your investments into retirement income.

If your investments do not perform well, you may end up with a retirement fund that is smaller than what you had when you left the Plan. Superior investment returns are not a guarantee; investments that have higher returns may carry a higher risk.

Managing your retirement investments typically involve transaction and expense costs that vary by investment type.
Inflation protection Your pension receives a guaranteed annual cost of living adjustment equal to a percentage of the increase in the Consumer Price Index (CPI). Before you start to receive your pension, it will be adjusted for inflation during the deferral period.

Once you start to receive your pension, your payments will continue to increase annually for inflation for the rest of your lifetime. This annual increase also applies to survivor benefits.

Learn more about how your pension is indexed.
You may purchase an annuity from an insurance company that includes inflation protection, but it will cost more than an annuity that does not include inflation protection.
Maximum transfer value N/A The Income Tax Act imposes limits on the amount of money that can be transferred to a locked-in retirement arrangement on a tax-sheltered basis. Any amount above these limits will be paid to you in cash.

The amount that you receive in cash is subject to withholding tax and must be declared as income in the year that you receive it. The amount you receive will be taxed at your personal income tax rate, and as a result, the amount of money available for investment can be reduced. Learn more on CRA’s website.
Post-retirement group health benefits You may be eligible for post-retirement group health care benefit coverage with your employer.

WISE Trust is not responsible for the payment or administration of any post-retirement group health care benefit programs. Contact your employer for more information.
If you qualify for post-retirement group health care benefits with your employer and you choose to transfer your pension entitlement out of the Plan, you may not be eligible for group health benefit coverage.

WISE Trust is not responsible for the payment or administration of any post-retirement group health care benefit programs. Contact your employer for more information.

Commuted value estimates​

Given the potential for commuted values to change due to interest rates and actuarial assumptions, your actual commuted value will only be provided when required by law upon notice of your termination of membership in the Plan.