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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.

Survivor Benefits

Survivor benefits can help protect your loved ones financially when you pass away. The type and amount of survivor benefits depend on whether you have an eligible spouse and/or eligible children and whether you have begun receiving a pension when you pass away. By law, your eligible spouse is entitled to receive survivor benefits when you pass away.

Choosing a beneficiary

If you don’t have an eligible spouse or eligible children, your beneficiary may be entitled to receive survivor benefits. A beneficiary can be any person, persons, or organization you choose. If you don’t choose a beneficiary(s), or your beneficiary(s) passes away before you, any benefits payable when you pass away will go to your estate as a lump-sum payment (less applicable withholding taxes).

Beneficiary scenarios

Commonly asked questions

Your beneficiary can be one or more people or a corporation, such as a charity. You should name a beneficiary and review your designation whenever your personal circumstances change, such as having a baby or getting married. By law, your eligible spouse is entitled to receive survivor benefits when you pass away.

You can review and change your spousal declaration and beneficiary designation on My Pension Resource by completing the form.

An eligible spouse is 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.
If you have both a former spouse, from whom you’re separated but not legally divorced, and a common-law spouse with whom you’re living on the date that the first installment of your pension is due, your eligible spouse is your common-law spouse you’re currently living with. If you have a spouse from whom you are living separate and apart at the time of determination, that person is not an eligible spouse.
An eligible child includes a natural, adopted, or stepchild that the person is acting in the role of a parent 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 passing, whichever occurred most recently.

Your child is eligible for survivor benefits if they’re 18 or older and have a physical or mental disability that has prevented them from earning a living since reaching 18 or since your passing, whichever occurred most recently. It’s important to inform us if you have an eligible dependent to ensure they receive their entitlement under the Plan, should you pass away.

You will need to provide the following documentation to ensure your dependent is eligible for survivor benefits:

  • a recent copy of the Ontario Disability Support Program statement that shows your dependent is receiving a disability benefit from the Government
  • a medical report or letter provided by a qualified doctor or nurse practitioner (it should include when your dependent’s disability began)
  • a copy of a long form birth certificate
  • a copy of the Power of Attorney for property or guardian document for property, if the Eligible Child is over the age of 18 and unable to manage his or her own property

Contact the WISE Trust Pension Contact Centre for more information on how to provide this documentation. Eligibility of a person designated as an Eligible Child with a disability to survivor benefits from the Plan is required to be assessed at the date of the member’s death.

If you pass away before you retire, survivor benefits are paid from your WISE Trust pension. Your eligible spouse is typically considered the primary recipient of survivor benefits. If you don’t have an eligible spouse, survivor benefits may be paid to your eligible children. If you don’t have an eligible spouse and/or eligible children, a lump-sum death benefit is payable to your designated beneficiary.
Your eligible spouse will receive 66 2/3 per cent of the lifetime pension you were receiving if you were living together when your pension started, unless your eligible spouse had elected to waive their entitlement before your pension commenced. In addition, if you have one or more eligible children, each may receive a pension of up to 10 per cent of the lifetime pension you were receiving at the time of your passing. The exact amount will depend on the number of eligible children you have.
If you didn’t have a spouse on the date you retire, and you enter into a spousal relationship after you have retired, you may be able to apply to provide your new spouse with access to the post-retirement survivor benefit in the event that you pass away before they do, provided that:
  • you didn’t have an eligible spouse on your retirement date; or
  • you did have an eligible spouse on your retirement date, and they’ve passed away and you have no eligible children entitled to survivor benefits.
Since survivor benefits for a spousal relationship beginning after retirement are not funded by WISE Trust, your pension is actuarially reduced to provide survivor benefits to your post-retirement spouse. You must make an election to add this survivor protection within a six-month period beginning one year after you begin a relationship with your post-retirement spouse.

Spousal waiver of pre-retirement survivor benefits

Under Ontario pension law, if you pass away before retirement and you have an eligible spouse, your spouse is typically considered the primary recipient for survivor benefits payable by your WISE Trust pension. However, your spouse may waive their right to these benefits at any time before you pass away.

We recommend that you and your eligible spouse obtain independent legal advice before signing any waiver to a pension benefit entitlement.

If your eligible spouse chooses to waive these benefits and you die before your pension begins, any survivor benefits payable would be paid to your designated beneficiary. If you don’t designate a beneficiary, these benefits will be payable to your estate. Your eligible spouse can also cancel the waiver at any time, prior to your passing. After you pass away, the waiver cannot be changed.

Spousal waiver of joint and survivor pension

Under Ontario pension law, if you pass away after retirement and you have an eligible spouse, your spouse is typically considered the primary recipient for survivor pension payable by WISE Trust. However, there may be situations where your eligible spouse may want to waive their right to this benefit.

We recommend that you and your eligible spouse obtain independent legal advice before signing any waiver to a pension benefit entitlement.

To waive their right, your eligible spouse must submit a waiver during the 12-month period before your retirement. This waiver cannot be cancelled once you start collecting your pension.

If your eligible spouse submits a waiver, survivor benefits will be paid to any eligible children you have. If you don’t have eligible children, the excess, if any, of your contributions plus interest made to WISE Trust, less any pension payments you received will be paid to your designated beneficiary or estate.