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%

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?’