50 facts for 50 years: Retiring early (Facts 6-10)

Posted for Everyone, February 17, 2017

Did you know that 70% of Canadians retire sooner than they anticipated, and the main reason for this is health?1

The CAAT Pension Plan has offered early retirement provisions since the beginning, in order to give members greater flexibility to retire at the time that best suits them. So whether you’re retiring early because you want to or need to, your pension will be there.


When the CAAT Pension Plan started in 1967, members had one option if they wanted to retire early, and that was on a reduced pension if they were age 55 and over with 10 years of service. The first early unreduced option came in 1974, when the 90 Factor was introduced. This allowed a member to retire on an unreduced pension if their age and service added up to 90.


In 1988, the early reduced pension criterion was changed to age 55 with two years of service (today members can retire at age 55 no matter how much service they have). If members wanted an unreduced pension, they still had to qualify for the 90 Factor. In 1991, another unreduced pension option became available — the 60/20 Rule (60 years old with 20 years of service). In 1998, another early retirement option was introduced, enabling members to retire as early as age 50 with 20 years of service. Also in 1998, the 90 Factor changed to the current 85 Factor.


The first early reduced pensions were reduced by 5% for each year the member was away from age 65. In the 1990s the reduction rate (also called the “early start adjustment”) changed to 3% from a member’s earliest unreduced date, which for many members is earlier than age 65. By comparison, if you start your CPP pension before age 65, it’s reduced by 7.2% for each year you’re away from age 65. The CAAT Plan’s early start adjustment makes early retirement a valuable option for members – even if they haven’t yet qualified for an unreduced pension.


Another reason the Plan’s early retirement provisions are such a valuable benefit is the bridge benefit. This is an additional pension paid from early retirement, to age 65. It was originally introduced to members to “bridge the gap” between retiring early and starting CPP at 65. And even though you can currently start collecting a reduced CPP pension from age 60, the CAAT Plan’s bridge benefit is still paid to members who retire early until they reach age 65. Age 65 remains the age at which you can start collecting an unreduced CPP pension.


In 2016, almost 770 CAAT Pension Plan members retired. Of those members, 65% were under age 65, therefore retiring early. Of those retiring early, 60% qualified for early unreduced lifetime pensions.

Learn more about the CAAT Pension Plan’s retirement options by visiting our website’s retirement planning section for videos that answer your top questions.

12014 Sun Life Canadian Health Index report

An extra fact, eh!

From February 11th to 19th of 1967, the very first Canada Games took place. The Games were held in Quebec City, where 1,800 athletes from across the country came to compete in 15 sports. The event alternates between Winter and Summer Games every two years, giving young Canadian athletes the opportunity to compete at a national level and develop their skills. Many former competitors have gone on to great success, like Sidney Crosby, Steve Nash, and Catriona Le May Doan. The 50th anniversary Games will be held this summer in Winnipeg, Manitoba.