IMPORTANT update to the Non-Management Personnel Pension Plan (RREGOP)
Planning to retire?
IMPORTANT update to the Non-Management Personnel Pension Plan (RREGOP)
On June 8, 2016, Bill 97 was adopted. It integrates many changes agreed upon at the collective bargaining table pertaining to provincial pension plans of public service employees. Some of these changes can affect your retirement. This is what you need to know:
New retirement criteria to obtain your pension without a penalty
Starting July 1, 2019
- The age criteria to retire will rise from 60 years to 61 years
- A new retirement criteria will be introduced (factor 90), which is: minimum age 60 years + service for eligibility at retirement = 90
NB: the current retirement criteria, 35 years of admissibility upon retirement, remains status quo.
Increase to penalty percentage if you retire early
Starting July 1, 2020
- the penalty (actuarial reduction) applied to a pension for every year of anticipation until the eligible age to receive a full pension, will increase from 4% to 6%
WHAT YOU CAN DO TO RETIRE UNDER THE CURRENT RULES
How the above rules apply for people in a progressive retirement
In the case of a progressive retirement (phased departure agreement) that starts before or on September 7, 2016, the current retirement rules will remain. The new retirement rules will apply for all agreements that will start after September 7, 2016.
For an agreement that started and/or will start between May 11 and September 7, 2016 inclusively, the work schedule must be reduced by at least 20% of the normal schedule for a full time equivalent position. This must be the case for each year of the agreement.
Increase to the maximum number of years you can contribute to your pension
The current maximum number of years you can contribute to your pension plan is 38. However, effective January 1, 2017 the maximum number of years will increase to 39 and then on January 1, 2018 it will increase to 40. A person could, on January 1, 2019, receive a pension corresponding to a maximum of 80% of the average of his/her best five years of admissible salary. Today, a person who contributes the maximum number of years, which is 38, will receive 76% of their admissible salary.
This cannot be applied retroactively. Therefore, service prior to January 1, 2017 that is over 38 years on December 31, 2016, will not be recognized for the purpose of calculating the pension. It will, however, be recognized for the purpose of establishing the average salary.
If you have already reached the maximum 38 years of contributions on/before December 31, 2016 you must start to contribute again on January 1, 2017 for two more years. A pension buy back cannot permit a person to accumulate more than 38 years, for the purpose of calculating the pension, on December 31, 2016.
Click to view original MUHC Newsletter, ‘Planning to retire?’