Did you know?
Did you know that the Public Service Pension Plan is the largest pension plan in Newfoundland and Labrador with over 55,000 members?
After exhausting all your sick leave credits (where applicable) you may qualify to receive a disability pension. The criteria for eligibility includes, but may not be limited to, the following:
- You must be an employee as defined by the Plan Text;
- You must have accumulated a minimum of five years’ pensionable service; and
- Your disability must be medically certified as likely to be permanent
The pension payable under medical disability is based upon the amount of pension earned to the date of retirement due to disability. Three things that distinguish this benefit from other retirement options are:
- You have a permanent disability that prohibits you from returning to work;
- The benefit is payable with effect from the first day after we receive the completed Medical Disability Application. However, the date your pension is effective may be impacted if you are entitled to any sick leave or are purchasing service or unpaid leave;
- There is no minimum age requirement
Note: Participation in a rehabilitation program is mandatory if recommended by the Plan’s medical assessor.
What if I die before retirement?
In the event of your death prior to retiring, the benefits that will be payable depends upon many factors, as described below.
If you die before you have been credited with at least five years of pensionable service, a refund of your contributions and interest will be paid to your estate.
If you die with at least five years of pensionable service, your principal beneficiary will have the following options:
- a lifetime pension equal to 60% of the benefit earned to the date of death, or
- a lump sum payment of the greater of:
- 100% of the commuted value of your pension entitlement, calculated at the date of death;
- the commuted value of the 60% survivor benefit as determined at your date of death.
If your principal beneficiary elects to receive the 60% survivor pension, it is payable to them for life. Payments will begin on the first day of the month following the month of your death.
If you have no principal beneficiary at the date of death, the commuted value of your pension entitlement will be paid to your estate.
What if my principal beneficiary dies leaving surviving children?
Upon the death of a principal beneficiary who is receiving the 60% survivor benefit, the benefit will continue to be paid to (or for the benefit of) surviving children:
- until the youngest child reaches age 18, or
- if a child is in full-time attendance at a recognized school or post-secondary institution, until the course of study is completed or the child reaches age 24, whichever occurs first.
What if I die after I retire?
Upon the death of a pensioner, the surviving principal beneficiary or, in the absence of a principal beneficiary, the surviving children will receive a survivor benefit equal to 60% of the pension.
In the case of a principal beneficiary, the benefit is payable for life. In the case of surviving children, the benefit is payable until the youngest child reaches age 18 or, if a child is in full-time attendance at a recognized school or post-secondary institution, until the course of study is completed or the child reaches age 24, whichever occurs first.
Please note that, if it has not been removed, the offset (or bridge benefit) will be removed from the survivor pension when the plan member would have reached age 65.
Are there any other provisions which protect my interests in the event of my death?
Yes. If you and/or your survivors should die before the total of benefits paid out is equal to your contributions plus interest, the difference between the amount of contributions with interest and the total benefits paid will be calculated and paid to your estate.
A deferred pension is a specified pension determined at the time of termination, which is payable when the plan member reaches the required age.
Change in Marital Status
Pension benefits acquired during the marital period are considered as matrimonial property and, consequently, may be subject to division upon marriage breakdown. A division of pension benefits is not automatic and will occur only as directed by a court order or separation agreement. Ending a spousal relationship can be life-changing and choosing whether to divide your pension assets is an important decision. To begin this decision-making process, you may be required to obtain a valuation of your pension benefit. We can provide the information you need to make an informed decision, but cannot provide you with legal or financial advice. Please consult a family law lawyer before making any decisions regarding your pension.
For more information regarding the division of your pension benefit upon marriage breakdown please contact a Provident10 Pension Analyst at 709.701.3355, toll-free at 1.844.247.1237, or by email at [email protected].
Leaving My Job
Purchasing of Service
Can I purchase past service?
Yes. Under the Public Service Pension Plan you may purchase prior service, provided the service is pensionable as defined by the Plan Text, and if you are an employee as defined by the Plan Text when electing to purchase. Examples of past service include:
- Worked service for which contributions were paid and subsequently refunded;
- Worked service with an employer under any other plan with whom the PSPP has a portability agreement, and where contributions were refunded;
- Worked service with an employer under any other plan, with whom the PSPP has a portability agreement, and where contributions were not paid but the service would be recognized under the former plan today;
- Prior full-time contractual service;
- Authorized leaves of absence
- An application to purchase unpaid leave must be received by Provident10 within 90 days of returning from the leave for the cost to be based on the member contributions that would have been paid had the leave not occurred. If the application is received after 90 days, the cost is based on actuarial values and could be significantly greater.
There are other periods of service which may be purchased. Please note that most purchase costs are calculated using actuarial values. A significant factor in determining an actuarial value is whether the purchase will enable you to retire earlier (i.e., the cost recognizes that if a plan member retires earlier, the benefit will be paid out for a longer period). Other factors in determining cost are the age of the plan member and interest rates.
For further information on the purchase of prior service, including payment arrangements, please contact your employer. All requests to purchase prior service must come to Provident10 via your employer. Requests will not be accepted directly from plan members. An application to purchase unpaid leave must be received by Provident10 within 90 days of returning from the leave for the cost to be based on the member contributions that would have been paid had the leave not occurred. If we receive the application after 90 days, the cost is based on actuarial values and could be significantly greater.
Please note that if you have an outstanding balance remaining on a purchase of service contract at the date that you leave the Plan, your benefits cannot be processed until the outstanding balance is paid in full. If you do not wish to pay the outstanding balance, the amount of service that has been credited must be re-determined based on the amounts paid. Both the pension amount and the date that you are eligible to receive a pension will be re-calculated based on the reduced amount of service. Please contact Provident10 to discuss this matter.
What if my employment terminates?
A non-vested member is a person with less than five years pensionable service. If you terminate employment and are non-vested you will have the following options:
- receive a cash refund of your contributions and interest (less required withholding tax), or
- transfer your (employee) contributions and interest to an individual RRSP, thus deferring tax implications, or
- transfer your termination benefit directly from the PSPP to the pension plan of your new employer (provided your new employer’s pension plan permits such transfers), or
- leave your contributions in the PSPP. This would enable you to link your service accumulated to the date of termination, with future pensionable service should you be re-employed in a pensionable position under the PSPP.
If you have at least five years of pensionable service, you are a vested member. “Vested” means that you have earned the right to a lifetime pension (i.e., a deferred pension). The options of a vested member may vary according to age and service. Please note that if you are eligible for an immediate unreduced pension, you do not have the option of a commuted value payment. Furthermore, it is important that you read the entire section on “Vested Member” to be certain of the options available to you. An election form, detailing your options, will be provided upon termination of employment.
Upon termination, you may elect one of the following options within 90 days of termination:
- To transfer the commuted value of your pension entitlement to a locked-in retirement account (LIRA), or
- To transfer your termination, benefit directly from the PSPP to the pension plan of your new employer (provided your new employer’s pension plan permits such transfers), or
- To leave your contributions in the PSPP and either:
- receive a deferred pension payable from your earliest eligible retirement age or,
- link the vested service with future service if you are re-employed in a pensionable position under the PSPP.
- If you have less than 10 years of pensionable service and have not been continuously employed for 10 years, and are not yet age 45, you may elect within 90 days after termination to receive:
- A return of your pre-1997 (employee) contributions plus interest; and
- A transfer of the commuted value of your pension entitlement representing pensionable service performed after December 31, 1996, to a LIRA.
- If you have accumulated 10 years of pensionable service or you have been continuously employed for 10 years, and you are at least age 45, you may elect within 90 days after termination to receive:
- A return of your pre-1987 (employee) contributions plus interest; and
- A transfer of the commuted value of your pension entitlement representing pensionable service after December 31, 1986, to a LIRA.
Note: The commuted value will not be less than the value of the employee contributions and interest. Plan members who do not elect an option within 180 days after termination are deemed to have elected a deferred pension.
If you choose to remove your termination benefits from the Plan there may be other benefits that are impacted or forfeited. Please contact your employer regarding the impact this decision may have on other employer benefits.
Provident10 is notified of a termination in employment by participating employers.
How do I qualify for a pension at retirement?
You must have a minimum of five years of pensionable service. This is the vesting period of the PSPP. Vesting refers to the right of an employee to a lifetime pension. This does not have to be five consecutive years, but rather a total of 60 months.
When can I retire?
The date at which you will be eligible to retire depends on many factors; your age, how much service you have credited in the Plan, and whether you were a member of the Plan on December 31, 2014, when the pension reform changes were introduced. There are also different provisions which will either allow you to retire on an unreduced basis, or to retire earlier subject to a reduction in your accrued pension.
The Plan’s normal retirement age, being the age at which all vested members are eligible to retire with an unreduced pension, is 65.
Early Unreduced Retirement
The changes to the Plan’s early unreduced retirement criteria that were made as a part of pension reform were introduced on a transitional basis. During the period up to and including December 31, 2019, you were eligible to retire early with an unreduced pension if you met either of the following criteria:
- You had reached age 60 with a minimum of five years of pensionable service or,
- You had reached age 55 with a minimum of 30 years of pensionable service
Further, if you were already a member of the Plan on December 31, 2014, and qualified to retire on an unreduced basis under either of these criteria prior to December 31, 2019, you are eligible to retire on an unreduced basis at any point after that date if you decided to continue working and remain an active member of the Plan. In addition, if you had 30 years of service during this period, you will be grandparented under this provision, and are eligible to retire on an unreduced basis at age 55.
For members who joined the Plan after December 31, 2014, or for members who are not grandparented or who did not qualify for early unreduced retirement during the transitional period, the early unreduced retirement criteria changed. In this case, you will be eligible to retire early with an unreduced pension if you meet either of the following criteria:
- You have reached age 60 with a minimum of 10 years of pensionable service or,
- You have reached age 58 with a minimum of 30 years of pensionable service
Early Reduced Retirement
There are several scenarios which allow you to retire early, with a reduction in your accrued pension. If you were a member of the Plan on December 31, 2014, had 30 years of pensionable service by December 31, 2019, and are between the ages of 53 and 55, you can retire and receive an immediate pension that will be reduced by one-half per cent for each month you are younger than 55.
If you were enrolled in the Plan after December 31, 2014, or if you were a member of the Plan at December 31, 2014, but did not have 30 years of pensionable service by December 31, 2019, the reduced early retirement criteria are as follows:
- If you are between the ages of 53 and 58 with a minimum of 30 years pensionable service, you can retire and receive an immediate pension that will be reduced by one-half per cent for each month you are less than age 58.
- If you are between the ages of 58 and 60 with less than 30 years, and your age plus service totals a factor of at least 88, you can retire and receive an immediate pension that will be reduced by one-half per cent for each month you are less than age 60.
In these situations, the unreduced pension is calculated first, and the reduction is applied to the calculated pension and not to the accrual. As an example, if a plan member retires with 30 years of service credited by December 31, 2019, and is 53 years and seven months old, the reduction would be based on the number of months they are younger than 55, and is determined as follows:
- Months until age 55: 17 months
- Reduction: 17 * 0.5% = 8.5%
Finally, all members are entitled to retire as early as age 55 if they are vested. If you do not satisfy any of the above criteria, your immediate pension in this case will be actuarially reduced.
For information on how to calculate your pension, visit our Plan Booklet.
Change of Address
If you have recently changed addresses, or will change your address in the near future, please send an email to [email protected] with the following information: your first and last name, the last four digits of your SIN only, your date of birth, your old address, and your new address.