The main purpose of your pension plan is to give you secure income to enjoy your retirement. Here’s what you can look forward to when the time comes.
Normal retirement starts the first day of the month following your 65th birthday (or on your 65th birthday if it falls on the first day of the month).
However, you can take early retirement any time after age 55. Some members may be able to retire prior to age 55 if their age plus service equals at least 90 points (years). Depending on your age and years of service at retirement, your pension may be reduced. See What if you retire early for more information.
The main purpose of your pension plan is to give you secure income to enjoy your retirement. Here’s what you can look forward to when the time comes.
Normal retirement starts the first day of the month following your 65th birthday (or on your 65th birthday if it falls on the first day of the month).
However, you can take early retirement any time after age 55. Some members may be able to retire prior to age 55 if their age plus service equals at least 90 points (years). Depending on your age and years of service at retirement, your pension may be reduced. See What if you retire early for more information.
Following retirement, you will receive a monthly income for the rest of your life. The amount is based on a formula that is the same for all Union Plan members. It is calculated as:
Best average Plan Earnings
Credited service
Best average Plan Earnings
The best (highest) average of your Plan Earnings (measured over your best five consecutive years).
Credited service
Years of service with FortisBC during which you contributed to the Union Plan, plus your credited years of service accumulated through any previous eligible plans, plus approved periods of long-term disability or approved WorkSafeBC claim.
Note that there’s a difference between credited service and continuous service.
Continuous service alone refers to your years of employment with FortisBC (both Gas and Electric divisions) and eligible predecessor companies, including periods of long-term disability and any approved leaves of absence or maternity leave. Continuous service is not used to calculate your monthly pension amount. However, it is used to determine your eligibility for retirement and early retirement reduction, if applicable.
Credited service is used in the pension formula above to determine your monthly pension amount before any reduction for early retirement.
Your monthly pension will cease when you pass away, unless you die within the first five years, in which case there would be a death benefit payable to your beneficiary. Additional payment options will be made available at retirement.
In this example, you have 35 years of credited service and your best five years average Plan Earnings is $60,782.
Normal retirement calculation | ||
|---|---|---|
Annual pension | = 2% x best average Plan Earnings x years of credited service | |
= 2% x $60,782 x 35 years | ||
= $42,547 per year (or $3,546 per month) | ||
In this scenario, a monthly pension of $3,546 will be paid for your lifetime. Your monthly pension will be taxed similar to employment income at the time of payment, so the amount deposited to your bank account would be $3,546 less applicable income tax.
Your annual pension will NOT be reduced if you are at least age 60 on retirement. However, if you retire before achieving age 60, your annual pension will be reduced by an amount equal to 3% multiplied by the number of years preceding your 60th birthday. Some members may be able to retire before age 60 WITHOUT a reduction for early retirement if their age and service equals 90 points (years) on retirement.
If you are an IBEW Electric employee hired before January 1, 2020, there are some different provisions that apply to pension benefits earned for your service prior to January 1, 2020. In particular, the unreduced retirement date for your pre-2020 credited service is the earlier of age 62 or 90 points.
You can read about the unique provisions here.
In this example, you are retiring at age 55 and have 20 years of credited service.
Your best five years average Plan Earnings is $60,782.
Early retirement calculation | ||
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First, calculate your pension entitlement for your credited service, again using the same formula as the normal retirement example:
| ||
Unreduced annual pension | = 2% x best average Plan Earnings x years of credited service | |
= 2% x $60,782 x 20 years | ||
= $24,313 per year (or $2,026 per month) | ||
Then, subtract the early retirement reduction {3% x years before age 60 (5 years)} = 15%: | ||
Reduced annual pension | = $24,313 x (100% – 15%) | |
= $20,666 per year (or $1,722 per month) | ||
In this scenario, your $1,722 pension benefit, less applicable income tax, will be deposited to your bank account each month following retirement for the rest of your life, with a five-year guarantee period (meaning that there would be a death benefit payable if you pass away within the first five years).
The normal form of pension gives you a lifetime pension paid on the first business day of each month beginning on your retirement date. It is guaranteed for 60 months (meaning that in case of death within the first five years after retirement, the balance of the 60 payments is payable to your beneficiary).
Your retirement statement will include a number of additional payment options for you to consider. Each option will be equal in present value to the normal form of pension.
Under provincial pension legislation, your spouse at retirement is entitled to a survivor’s pension. This means that the minimum form of pension you can elect if you are married at retirement is a joint and survivor pension in which 60% of your pension continues to your spouse when you pass away. If you wish to elect a form of pension that provides a lower level of spousal benefits, your spouse will have to sign a spousal waiver declaration.
When you retire, the Union Plan may provide inflation protection to help safeguard the buying power of your pension.
The Board of Trustees decides annually, in accordance with its Funding and Indexing Policy, whether to provide a cost-of-living adjustment to your pension. These adjustments are limited to the prior year increase in the Consumer Price Index and are granted only if certain conditions are satisfied. If approved, the increase takes effect in July of that year.
A detailed retirement process can be found on Connector. Please take note of the following:
Pension estimates and copies of your annual pension statements are available online using the Pension Web Portal. Feel free to contact TELUS Health for assistance with the Web Portal, or the FortisBC Pension Department for additional support.
Pension Web Portal
Log in instructions
Government benefits like Canada Pension Plan (CPP) and Old Age Security (OAS) are paid to eligible employees IN ADDITION to the Union Plan monthly pension. For information on Government benefits, contact Service Canada.
