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How Much Pension Will You Receive?

Your personalized Annual Statement that you receive around June of each year includes estimates of your pension at future dates. You should refer to your Annual Statement if you’re wondering how much pension you might expect to receive at retirement. The following provides a description of how your pension is calculated.

Your pension is based on a defined benefit formula tied to your annualized pensionable earnings and years of credited service as follows:

1. Annualized pensionable earnings
multiplied by
2. Years of credited service in the Plan
multiplied by
3. Applicable Benefit %
divided by 12
Equals your monthly pension.

What is a Base Year and how does it affect your pension benefit?

The Plan uses a “Base Year” to determine your annualized pensionable earnings for the earlier years of your plan membership. Your annualized pensionable earnings for years of Plan membership before the Base Year will be the same as your annualized pensionable earnings in the current Base Year.

Using the current Base Year earnings instead of your annualized pensionable earnings for your earlier years of Plan membership increases the amount of your pension. This happens because your annualized pensionable earnings in the current Base Year are usually higher than the annualized pensionable earnings you actually received during those years before the current Base Year.

(Note: the current Base Year is used unless an earlier Base Year produces a higher pension benefit for you.)

Base Year upgrades, when approved, apply only to active members and usually take effect on January 1. Effective December 31, 2016, the Base Year was upgraded from 2014 to 2015.

Base Year upgrades are usually considered each fall. If the Base Year is upgraded, an announcement will be made as soon as it is approved.

Please note: If you are considering termination or retirement late in the calendar year, you may wish to consider the impact that any Base Year upgrade could have on the amount of your benefit. In some cases there can be a substantial financial advantage if you delay your termination or retirement until after the new Base Year is effective.

Now let’s look at the details:

For all accumulated credited service
before December 31 of the Base Year
(the Base Year is currently 2015)


1.4% of your Base Year's annualized pensionable earnings
up to the YMPE for that year
plus
2% of your Base Year's annualized pensionable earnings
in excess of the YMPE for that year
times
Years of credited service up to December 31 of the Base Year
(YMPE is $53,600 for 2015)

PLUS

For credited service earned in each year
after December 31 of the Base Year


1.4% of your annualized pensionable earnings
up to the YMPE for that year
plus
2% of your annualized pensionable earnings
in excess of the YMPE for that year
times
Credited service accrued in that year
(YMPE is $54,900 for 2016 and $55,300 for 2017)

Part-time employees, or employees on an unpaid leave of absence who chose not to contribute to the Plan during their leave, will receive a partial year of credited service that is prorated based on the percentage of a regular work year they were employed and contributed to the Plan.

Note: If your Base Year’s annualized pensionable earnings are greater than the average of your highest 36 consecutive months of pensionable earnings, the latter will be used to determine your benefits for credited service up to the end of the Base Year.


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