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Once you decide to retire, your planning will reap its benefits. Your income from the plan will play an important part in your financial security.

Head Office will inform you if you are eligible for any post-retirement insurance benefits. These benefits are only available to members who retire and receive an immediate pension.

There are a number of administrative steps required to process your pension, so you should notify your Human Resources Representative as early as possible once you decide on the date you wish to retire.



The pension formula

All the benefits paid from the DB plan are based on a formula that considers:

  • your best average earnings

    • which is the average of your five consecutive years of highest annualized earnings while a member of the plan, and

  • your years of plan membership

    • which is called your pensionable service

Effective March 1, 2003 the plan formula is:

2.0% × your best average earnings × your pensionable service to October 31, 1997

plus

1.6% × your best average earnings × your pensionable service from November 1, 1997

Using this formula, you can estimate anytime what your pension will be, based on an average of your five consecutive years of highest pay while a member of the plan.

Let's look at an example.

Matt's best average earnings are $60,000. He has 5 years of membership to October 31, 1997 and 10 years after that date.

Pension for service to October 31, 1997
2.0% × $60,000 $1,200
Pensionable service × 5 years
Matt's pension for service to October 31, 1997 $6,000
Pension for service from November 1, 1997
1.6% × $60,000 $960
Pensionable service × 10 years
Matt's pension for service from November 1, 1997 $9,600
Matt's annual pension, payable for life from age 65 $15,600 ($6,000 + $9,600)

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Normal retirement

  • You may retire with an unreduced pension anytime after you reach age 65. Your monthly pension will begin to be paid to you on the first day of the month following your retirement date.

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Early retirement

  • You may choose to retire early anytime after you reach age 55, as long as your pension benefits are vested.

  • If you retire early, you may choose to receive a pension beginning on the first day of any month thereafter, but no later than the first day of the month following your 65th birthday. If you choose to start receiving the pension before age 65, your pension—calculated according to the formula described in the Pension formula section—is reduced, because it will be paid for a longer period. The pension will be permanently reduced by:

    • 0.3%, for each month between age 60 and age 65, and


    • 0.4%, for each month by which your early retirement date precedes age 60.

Matt decides to retire on his 58th birthday

Pension calculated according to the formula $15,600
Early retirement reduction
  • 0.3% for each month between 60 and 65 (60 months × .3% = 18%)
  • 0.4% for each month before age 60 (24 months × .4% = 9.6%)
Total reduction 18% + 9.6% = 27.6%
Matt's pension is reduced by 27.6% $15,600 = $4,306
Matt's annual early retirement pension $15,600 - $4,306 = $11,294
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Postponed retirement

  • Your retirement may be postponed beyond your normal retirement date under certain circumstances.

  • If you retire late, your pension is calculated as for normal retirement, but will be higher, since it includes all pensionable service up to your actual retirement date. Under current income tax law, you must start receiving your pension no later than the end of the calendar year in which you reach age 71.

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Pension payment options

Normal form of payment

  • The plan’s normal form of pension payment is a single life annuity. Under this form, a monthly pension is paid to you for your lifetime. If you die within 10 years from the date your pension started, pension payments will continue to your named beneficiary for the remainder of the 10-year period, either as continuing income or in one lump sum.

  • If you are single when you retire, and you choose no other payment option, this is the form of pension you will receive.

A pension for your spouse

  • If you have a spouse when you retire, pension legislation requires that your pension be paid in a form that provides a pension to your eligible surviving spouse if you die. To accomplish this, the initial amount of pension you receive will be reduced from the normal form to account for the fact that the pension will be paid during two lifetimes instead of one.

  • The adjusted pension is paid to you until your death, and then, two-thirds of that amount is paid to your surviving spouse for his or her life. If your spouse dies before you, the pension ends at your death.

  • This form of payment is called a joint-and-survivor 66 2/3%. If you have a spouse when you retire, and you choose no other payment option, this is the form of pension you will receive.

Optional forms

  • You may choose one of the other pension payment options offered by the plan. Your pension amount may be adjusted to provide you with a higher pension that has no guaranteed payment period, or one that has a 60-month guarantee. If you have a spouse and wish to take one of the optional forms, you and your spouse must both sign a form, waiving the automatic spousal pension.

Anne retires with a monthly pension of $800:

Since Anne is single, she chooses one of the following pension payment options Anne’s monthly pension Monthly survivor benefit to Anne’s beneficiary after her death
Single life guaranteed
10 years (normal form of pension)
$800 $800
for balance of guaranteed period, if any
Single life guaranteed 5 years $818 $818
for balance of guaranteed period, if any
Single life no guarantee $824 None

If Anne has a spouse:

Since Anne has a spouse, she chooses one of the following pension payment options Anne’s monthly pension Monthly survivor benefit to Anne’s beneficiary after her death
Joint-and-survivor pension of 66 2/3% (automatic form of pension) $753 $502
Joint-and-survivor (100%) $722 $722
Or, if Anne’s spouse waives, in writing, his or her rights to a survivor benefit, Anne can choose:  
Single life no guarantee $824 None
Single life guaranteed 5 years $818 $818
for balance of guaranteed period, if any
Single life guaranteed
10 years
$800 $800
for balance of guaranteed period, if any

  • If you are getting ready to retire, you may wish to contact Morneau Shepell Ltd at 1-877-252-4442 to discuss these options.

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Indexing of pensions during retirement

  • Your pension will be indexed each January 1st to reflect 75% of the annual increase in the Consumer Price Index above 2%, to a maximum of 5.5%.

  • If the cost of living stays the same or goes down, your pension amount will not change.

  • Your eligible spouse's survivor pension will also be indexed in the same way.

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Your Money Purchase Feature (MPF) contributions

  • If you made MPF contributions (before this feature ended on November 30, 2004), when you retire, you may use these accumulated savings, Canadian Blood Services’ corresponding contributions and the interest they’ve earned to generate additional retirement income, in one of the following ways:

    • transfer to a locked-in retirement savings arrangement,
    • if you are taking another job, transfer to your new employer’s pension plan, if that plan accepts transfers like this, or
    • purchase an immediate or deferred annuity from an insurance company.

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If you die during retirement

  • If you die during retirement, the benefits to be paid depend on the pension payment option you chose before you retired.


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