It’s Financial Literacy Month! Let’s talk about your pension!
Your pension is a valuable part of your total compensation. Whether you’re early in your career, mid-way through, or planning for retirement, understanding how your pension works can help you make informed decisions and feel confident about your financial future.
This Financial Literacy Month, we’re sharing key facts about your pension—how it’s funded, how it grows, and how it supports you and your family in retirement. No jargon. No guesswork. Just clear, helpful information to empower you in your career journey—and beyond.
- Your Contributions Go Further Than You Think
Every dollar you contribute to your pension is matched by your employer and invested by Provident10. In retirement, about 25% of your pension comes from those contributions—the other 75%+ is generated through investment returns, providing you a retirement income for life. - You See Built-In Tax Savings
Your pension contributions are tax-deductible, which lowers your taxable income automatically. These savings are reflected on your T4. No extra paperwork required. If you purchase service (leave buybacks), those may also qualify for tax deductions. Learn more about Taxes and Your Pension. - You Benefit from Strong Investment Performance
For every dollar contributed, a defined benefit pension like the PSPP delivers $5.32 in retirement income—compared to just $1.70 from a typical individual approach (Source: HOOPP, The Value of a Good Pension). Our investment professionals work independently from banks and governments to deliver long-term results and retirement security. Learn more about our investment performance in our 2024 Member Highlights. - You’re Protected from Market Volatility
Your pension is based on a formula using your salary and years of service, not market performance. That means your retirement income is for life, regardless of economic ups and downs. Learn more about the benefits of your Plan. - Your Annual Pension Statement
Your Annual Pension Statement gives you a personalized snapshot of your pension. It includes your credited service, earned retirement income, and more. Reviewing it annually helps you stay informed and plan ahead. Learn more about your Annual Pension Statement and watch our video guide for additional information on how to read your statement. - It’s Easy to Estimate Your Pension
It’s easy to get an estimate of your Public Service Pension. Use our online Pension Calculator to estimate your future pension and Bridge Benefit. Just enter your credited service and highest average earnings. It’s quick, easy, and informative! - Vested Means You’re Pension Eligible
When you have reached five years of service in the Plan, you become “vested.” This means, you are eligible to receive a lifetime pension at retirement. - Boost Your Pension by Buying Back Leave Time
Buying back service within 90 days of returning from authorized leave can save you money—and qualify you for employer matching. Acting early helps you strengthen your pension at a lower cost. Learn more about buying back your service. - Transfer In and Out of the Plan
The PSPP has Transfer Agreements with many other plans across Canada. If you’ve contributed to another registered pension plan, you may be able to bring that service with you—helping you grow your pension, retire sooner, and secure lifetime benefits faster. Learn more about Pension Transfers and how they can support your retirement goals. - Understand Your Choices Before Leaving the Plan
If you choose a lump-sum payout when leaving the Plan, most (or in some cases, all) of the funds are locked-in and must be transferred to a Locked-In Retirement Account (LIRA) for retirement use after age 55. Un-locked funds can be transferred to a Registered Retirement Savings Plan (RRSP) or paid in cash (less income tax). Any remaining funds that can’t be transferred to a LIRA or RRSP if non-locked, are paid in cash and are subject to income tax. It’s important to understand your options before making a decision. Learn more about your options. - Your Flexible Retirement Options
You can work in retirement and still collect your pension, as long as your new job doesn’t contribute to the PSPP. Many retirees choose to work part-time or pursue new opportunities while enjoying their pension income. Learn more about returning to work in retirement. - Your Bridge Benefit in Retirement
If you retire before age 65, your Plan provides a bridge benefit, an additional monthly amount that helps support your income until you’re eligible for your full Canada Pension Plan (CPP) benefit at age 65. This benefit ends on the first day of the month following your 65th birthday, when CPP typically begins. At that point, your pension income may actually increase, as your CPP payments can exceed the bridge benefit amount. The bridge benefit helps ensure a smoother financial transition into retirement, especially for those retiring early. - Your Retirement Income Mix
Your pension is a key part of your retirement income—but not the only one. You will also receive your Canada Pension Plan (CPP) benefit, potentially Old Age Security (OAS), and income from personal savings tools Registered Retirement Savings Plans (RRSPs), Tax Free Savings Accounts (TFSAs), or other savings. It’s important to know this so you can plan early! Together, these sources help create a stable and secure retirement. Use this Retirement Income Calculator from the Government of Canada to support your planning. - You Support Your Loved Ones with Survivor Benefits
Your pension includes survivor benefits, so your spouse or primary beneficiary will receive a lifetime pension of 60% of your earned benefit after death. Learn more about your Survivor Benefits.
Stay Informed. Stay Empowered.
Financial literacy is about more than numbers—it’s about understanding the systems that support your future. Your pension is one of the most powerful tools you have, and we’re here to help you make the most of it.
Want to learn more? Explore our Member Resources or contact us for support!
