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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 2020 average YMPE for a member who is retiring on January 1, 2021:
YMPEEarnings
2020 YMPE $58,700
2019 YMPE $57,400
2018 YMPE $55,900
2017 YMPE $55,300
+2016 YMPE $54,900
Subtotal $282,200
Divide by five $56,440
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.

Relationship changes

How relationship changes affect your pension

Maybe you’re getting married or entering a common-law relationship. Or maybe you just have questions about what happens to your pension during a separation or divorce. We can answer any questions you might have. If your relationship status changes, and you need to update your personal information, call the WISE Trust Pension Contact Centre. Remember to also update your employer through your HR department.

Getting married or becoming common-law

If you get married or enter into a common-law relationship before you retire, your new spouse automatically becomes your eligible spouse by law. This means your eligible spouse will receive spousal benefits when you pass away. When you retire, your eligible spouse remains your beneficiary, and receives any benefits payable upon your passing. This stays in effect even if you later divorce, separate from your common-law spouse, or re-marry. So, unless your eligible spouse waives their entitlement to the survivor pension before any division of your pension made as a result of the divorce or separation, they remain entitled to receive your pension benefits.

Determine your beneficiaries

You should name a beneficiary and review your designation whenever your personal circumstances change. Your beneficiary can be one or more people or a corporation, such as a charity. Many people name their children as beneficiaries. Learn more in Survivor Benefits.

Tip: Survivor benefits

Review your beneficiaries often.
Remember to review your beneficiary designation periodically and update it as things change or as needed.

Ending a spousal relationship

If your spousal relationship ends, your pension may be affected. Under the Ontario Family Law Act, pension benefits accumulated during your relationship may be included in the division of family property. What this means for you will depend on your own particular circumstances. We recommend you get professional financial and legal advice before making any decisions about your pension.

Before you divide your property, you’ll need to know the value of the pension assets you accumulated during your relationship. Here are a few steps to help you understand the process:

  • To request information or provide instructions about the division of your pension assets, you’ll need to use prescribed application forms. You can find these forms on FSRA’s website.
  • To determine the value of your pension, you’ll need a Family Law Valuation statement. You can get this statement from us at the WISE Trust Pension Contact Centre. Just send in a completed application for the valuation, including all supporting documents.
  • We’ll send you the statement within 60 days of receiving your application. It details the value of your pension accumulated during your relationship, as well as the maximum amount you can assign or transfer to your former spouse.

For more information, you can refer to the guidebook on My Pension Resource or contact us at the WISE Trust Pension Contact Centre.

When the changes occur can affect your pension

Once you receive the Statement of Family Law Value, you and your former spouse will need to decide if your pension will be divided. You have two options:

1. If you don’t divide your pension with a former spouse
You’ll need to send a completed application specifying that your pension is not being divided or a certified copy of the court order, family arbitration award or domestic contract that provides this information to the WISE Trust Pension Contact Centre.

2. If you divide your pension with your former spouse:
Your separation agreement or court order must state your former spouse’s share as a specified amount or percentage of the value of your pension.

Transferring the funds
We’ll transfer pension funds to your former spouse within 60 days of receiving all required documents, as well as an application from your former spouse. Their entitlement will be paid as a lump-sum payment which must, in most cases, will be transferred to a locked-in retirement vehicle or another pension plan—if that plan permits. There may be some exceptions. Your pension will be adjusted to reflect the amount paid to your former spouse.

Once you receive the Statement of Family Law Value, you will need to decide if your pension will be divided. You have two options:

If you don’t divide your pension with your former spouse:
You’ll need to send a completed application that specifies that your pension is not being divided or a certified copy of the court order, family arbitration award or domestic contract that provides this information to the WISE Trust Pension Contact Centre.

If you divide your pension with your former spouse:

  • Your separation agreement or court order must state your former spouse’s share as a specified amount or percentage of your monthly pension that is already in pay. Your former spouse then receives this share as a monthly pension and your pension will be adjusted to reflect the amount paid to them. You’ll need to send a certified copy of the court order, family arbitration award or domestic contract that provides this information to us at the WISE Trust Pension Contact Centre.
  • When you pass away, your former spouse’s share of the pension payment ends and they’ll receive a joint and survivor pension (provided they were the eligible spouse on your date of retirement) and as long as a waiver of joint and survivor pension form was not signed and filed with the Plan. Learn more about survivor benefits.
  • If your former spouse predeceases you, their pension payment will stop and their share reverts back to you—unless your separation agreement or court order filed with the application to divide your pension requires us to continue payment to your former spouse’s estate during your lifetime.

Separated before January 1, 2012?

Separation agreements that are signed or court orders, family arbitration awards or domestic contracts made before January 1, 2012, will fall under the old marriage breakdown rules. This means that your former spouse won’t receive any funds until those funds actually become payable – when you terminate, retire, or pass away, whichever comes first.