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FAQ - Early retirement

FAQs

The CAAT Pension Plan in general
Membership
Pensionable Service
The contribution formula and pension calculation
Transferring service
Purchasing service
Termination of employment
Retirement
Early retirement
The Bridge Benefit
Indexation
The 75% Spousal Pension
The 60 Months Pension Guarantee
Survivor benefits

Early Retirement

Member Handbook -
Early retirement pension
Unreduced early retirement pension:
85 Factor, 60/20 Rule
Reduced early retirement pension

Early Retirement
Qualifying for an unreduced pension
Getting a reduced pension

Retiring early - the 50/20 Option

What is an early retirement pension?

This is a pension that you start receiving when you retire before reaching age 65. It will be unreduced if you qualify - otherwise it will be reduced. If you retire before age 65, you will also receive the Bridge Benefit.

What's the difference between reduced and unreduced?

You qualify for an unreduced early retirement pension if you meet the requirements for either the 85 Factor or the 60/20 Rule.

For the 85 Factor, your age plus Pensionable Service must total at least 85.

For the 60/20 Rule, you must be at least 60 years of age with at least 20 years of Pensionable Service.

If you do not meet either of these requirements, your pension will be reduced by 3% multiplied by the number of years and part years which must pass before you meet one of the three criteria for an unreduced pension (85 Factor, 60/20 Rule, or age 65).

For more information, see the Member Handbook, or our Pamphlets.

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How do I qualify for an unreduced early retirement pension?

Normal retirement occurs when you retire during the month in which you turn 65. If you retire before age 65, you can receive an immediate Early Retirement pension made up of your lifetime pension and your Bridge Benefit, which is payable until you turn 65.

To qualify for an unreduced pension you must meet one of the following criteria:

85 Factor - your age plus Pensionable Service total at least 85. If you are under age 60, this is the only situation in which you can retire on an immediate unreduced pension.
60/20 Rule - you are age 60 or older and have at least 20 years of Pensionable Service.

Why will my pension be reduced?

The earlier you retire, the longer you are expected to collect a pension and your monthly benefit is reduced to reflect this fact. If you do not meet one of the Unreduced Early retirement criteria, your pension will be reduced by 3% multiplied by the number of years and part years you are retiring before the earliest date you would qualify for an unreduced pension. This date will be the earliest of:

the date you turn 65;
the date you would qualify under the 85 Factor; and
the date you would qualify under the 60/20 Rule.

The reduced Early Retirement pension will be available to you starting the month after you retire, as long as you qualify under one of two criteria:

you are age 55, with at least 2 years of Pensionable Service or Plan membership; or
you are age 50 to 54 with at least 20 years of Pensionable Service.

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How is the early retirement reduction calculated?

You must meet one of the criteria for the 85 Factor or the 60/20 rule to qualify for an unreduced pension. If you do not meet one of these criteria, your Early Retirement pension will be reduced by 3% multiplied by the number of years and part years you are retiring before the earliest date you would qualify for an unreduced pension or you turn 65.

For the 85 Factor to apply, your age plus Pensionable Service must total at least 85. For each full year you are a Member of the CAAT Plan and you work full time, you are credited with 2 years towards the 85 Factor; one for the increase in age, and one for the increase in Pensionable Service. Therefore, for the 85 Factor, subtract the total of your age and years of Pensionable Service from 85 and divide by two. This is the number of years until you qualify for an unreduced pension.

Under the 60/20 Rule, if you have 20 years of Pensionable Service, you will qualify for an unreduced pension when you turn 60. Similarly, if you are age 60 to 64, you will qualify when you have 20 years of Pensionable Service.

The earliest of the three dates will be used to calculate the reduction to your pension and Bridge Benefit. Since you are going to be receiving your pension over a longer period of time, the reduction is a permanent one. Your lifetime pension will not increase because you have turned 65.

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January 2006