Understanding the Bridge Benefit

Because our Plan is integrated with the Canada Pension Plan (CPP), if you retire before age 65, your pension will include a portion called a bridge benefit.

This bridge benefit is designed to help bridge the gap between your early retirement income and your income after you turn 65, when you can receive 100% of your CPP benefit. It’s important to note that if you choose to receive your CPP at age 60, or delay collecting your CPP, the Bridge Benefit will still end at age 65 when fully CPP eligible. The bridge benefit will no longer be on your pension beginning on the first day of the month that follows your 65^th birthday.

• Calculating the bridge benefit

  The bridge benefit is based on the lesser of your highest average earnings (HAE) or the average of the year’s maximum pensionable earnings (YMPE) for the 36 months immediately preceding the month of your retirement. The current formula used to determine your bridge benefit is:

  0.6% x HAE (or three-year average of YMPE) x number of years of service*

  *The maximum number of years of service used to determine your bridge benefit is 35 years.

• What is the YMPE?

  YMPE stands for the year’s maximum pensionable earnings. It is an amount defined annually by the Government of Canada and is used to calculate contributions to and benefits from the Canada Pension Plan. You can find the current YMPE on the Government of Canada’s website.