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Section 1: Retirement Options

A man taking a photograph on the beach.

When can I retire?

While the decision to retire is a personal one and will be based on many factors, employees enrolled in the TMU Pension Plan must be at least 55 years old in to collect pension payments: 

  • If you choose to retire between the ages of 55 and 64, this is considered early retirement and your pension may be impacted if you don’t meet an unreduced retirement factor. Unreduced retirement factors are:
    • The 90 factor - Your age and years of pensionable service is equal to 90. 
    • You’re at least age 60 and have at least 20 years in the pension plan. 
    • You can still retire if you do not meet an unreduced retirement factor, but your pension will be impacted. Learn more about early retirement
  • If you choose to retire at age 65 or older, this is considered normal retirement. There will be no reduction to your pension. 
  • While you may choose to work past age 71, you are required to begin collecting your pension at this time.

For teaching faculty members, the usual retirement dates are September 1 and January 1. For all other pension plan members, it can be the first day of any month in the year. At least three months' notice is required to prepare and complete the necessary documents.

For detailed calculation explanations on pension payments, review the TMU Pension Plan summary for your employee group

What are my retirement options?

  • A reduced workload is a potential option for those that might be looking to reduce their working hours (e.g. working less than full time hours)
    • Must be approved by the chair/dean/direct leader
    • For faculty members:
      • The reduction cannot be greater than 50%
      • You must contribute to the pension plan on 100% of earnings
      • You maintain full benefits for the full two years of a reduced workload. 
      • If the reduced workload extends beyond two years, then the reduced salary will apply to life insurance and long-term disability starting in year three.
      • For example:
        • If your annual salary rate is $120,000 and you take a 50% reduced workload, your monthly gross salary will be $5,000 but your pension deductions will be based on a monthly gross salary of $10,000.  
        • By contributing on your “full” or “notional” salary, you will receive full credited service in the pension plan (i.e. if you contribute for the full year, you’ll receive 1 year of credited service in the plan). 
        • If the reduced workload is extended beyond 2 years, the pension contributions/service will still be based on your “full” salary but the life insurance and LTD plan will now be based on the reduced salary rate of $60,000.
      • More details can be found in the collective agreement
        • For Mode I & Mode II members, see section 10.8 & 10.15.
        • For counsellors, see section 15.5.
        • For Librarians see section 16.5.
    • For staff:  
      • The reduction cannot be greater than 66%
      • You have the option of contributing to the TMU pension plan on either your actual/reduced earnings or on the full/notional earnings.  
        • For example if you decide to work 4 days per week, you can contribute based on 80% of earnings (the reduced rate) or on 100% (the full rate).  
      • If you contribute on the reduced rate you'll receive 80% of a year of credited service and if you elect to contribute on 100% of earnings you get the full year of credited service.
      • The salary related benefits (life insurance and LTD) are based on the reduced earnings.
      • For example:
        • If your annual salary rate is $78,000 and you decide to work 4 days a week, your gross bi-weekly salary will reduce from $3,000 to $2,4000. 
        • You have the option of contributing on either the $3,000 or $2,400 salary rate but if you choose the reduced rate, you will only receive 9.6 months of credited service in the pension plan (80% of 12 months).  
        • Your life insurance and LTD benefits will be based on the reduced salary rate.
  • The phased retirement program allows a faculty member to reduce their hours over a two year period with a proportionate reduction in salary but at the end of the period they must retire. A lump sum cash payment is made at the end of the period. Learn more about Phased Retirement options (external link) .

TMU faculty and staff are able to start receiving their TMU Pension Plan pension at age 65 (or later) while continuing to work. If you wish to start receiving your TMU pension at age 65, please contact the Pension & Benefits Unit at least three months prior to your 65 birthday to initiate the process.

Please note that you can no longer contribute or accrue service in the plan once you begin  receiving your TMU pension. Members are not required to start receiving their pension at 65 and have the option of continuing contributions and accruing service up to the maximum of 35 years of service or age 71, whichever occurs first.

The decision to start your pension at age 65+ and continue working,  is not a retirement (i.e. cessation of employment)  and you only need to notify the Pension & Benefits unit.  You will need to notify your Chair/Director/Dean/Manager when you eventually retire (i.e. stop working) and provide enough notice.

Does starting my pension while still working impact any other employment benefits? 

Starting your pension while continuing to work does not impact your group benefit coverage. Long Term Disability (LTD) coverage ends at 65, whether you start taking your pension or not. Additionally, most prescription drugs are covered by the provincial Ontario Drug Benefit (ODB) plan after age 65 and so would no longer be payable under the TMU benefits plan. Eligible drugs not covered by the ODB as well as any deductibles or co-pays can be submitted to the Sun Life plan for reimbursement.

If you elect to start receiving your pension :

  • The additional income through pension payments will need to be reported when filing taxes.
  • Pension income can be split with a spouse, reducing taxes. Note that this is done when you file your taxes, the actual pension paid by RBC is not divided between you and your spouse.
  • If you're collecting Old Age Security (OAS) it will likely be clawed back if your total income exceeds the prescribed threshold
  • Additionally, not contributing to the TMU pension plan provides more room for contribution to your RRSP if you have one.
  • No longer contributing to the TMU pension plan will increase your net (take home) pay. 

As a reminder, the Income Tax Act requires pension plan members to start receiving their pension by the end of the year that you reach age 71. This means that if you turn 71 in February, your TMU pension will begin on December 1 of that year. If you have RRSPs, you will be required to either cash them out, transfer them to a Registered Retirement Income Fund or purchase an annuity.

  • You may retire as early as age 55.
  • Pensions are reduced unless you meet one of the following criteria
    • Age 65
    • You are at least age 60 and have at least 20 years pension service or
    • Your age plus pension service equals 90.
  • In addition to the base pension, there is a bridging supplement payable, which provides additional income until age 65, between your early retirement date and age 65. Information on how the bridging supplement is calculated can be found in the pension plan summary for your employee group.
  • If you don't satisfy one of these conditions, your pension is permanently reduced by 5% for each year you are short of meeting one of these criteria. For example if you retire at 59 with 21 years of pension service, the reduction is 5% because you are 1 year away from the 60/20 date. If you are 61 with 10 years of service, the reduction is 20% since you are 4 years away from age 65. The reduction is also applicable to the bridging supplement.
  • There is no reduction if you retire at age 65, even if you only have 1 year in the plan.
  • If you are under 65 and return to work at TMU in a position where pension plan participation is mandatory, your TMU pension payments will cease and you'll begin contributing and accruing service again.
  • If you are over 65 and return to work at TMU in a position where pension plan participation is mandatory you will have the option of stopping your pension payments and begin contributions and service accrual or you can continue to receive your TMU pension and not re-join the Ryeson pension plan.
  • If you return to work and pension plan membership is voluntary (e.g. a term position), and you elect to re-join the plan, your TMU pension plan payments will cease.
  • If you return to work in a position that is excluded from pension plan membership (e.g. a CUPE 3904 sessional instructor, a non-union casual employee) there is no impact on your TMU pension.

Additional retirement circumstances

Retiring from long-term disability is much the same as any other retirement, with the following additional information:  

  • If you're in receipt of the Canada Pension Plan disability benefit, it will automatically switch over to the Canada Pension Plan pension benefit.
  • Your Sun Life LTD benefits are paid until the end of the month that you reach age 65.
  • Your TMU pension will be based on your highest 60 months of earnings, the number of years you contributed to the plan (including the years you were on LTD) and the plan formula.  
    • For those retiring from LTD the Year's Maximum Pensionable Earnings (YMPE)  used to calculate your pension is the YMPE in effect at the time your LTD benefit started. 
    • Your pensionable earnings do not increase while you are on LTD.
    • For example, if you went on LTD in 2015  and continued to be in receipt of LTD benefits until you reached age 65 in 2022, your pensionable earnings would be the base salary you were receiving when your LTD benefit started in 2015. This is because this period (from 2015 to 2022) is greater than 60 months and the pension benefit is based on the average of your highest 60 consecutive months of earnings. The pension would also be based on the 2015 YMPE of $53,600. If your LTD benefits only started 2 years prior to age 65, then your pension would be based on the average of your highest 60 consecutive months of earnings but would include 3 years of salary prior to the LTD period.

TMU Pension Plan

  • The base pension is payable for your lifetime whether or not you have a spouse at the date of retirement.
  • If you have a spouse on the date you retire, this spouse will receive a joint survivor pension upon your death. This is 60% of your base pension amount (excludes the bridge pension).
  • If you marry or remarry post-retirement, this spouse is not eligible for the joint survivor pension.
  • For individuals who do not have a spouse at time of retirement, there is a minimum 10 year payout of your pension. This means that if you die within 10 years of retiring, your beneficiary will receive the remainder of payments for the 10 year period from the date you retired. This is called a Life 10 pension. For example, if you die after receiving 5 years of payments, your beneficiary will receive the value of the remaining 5 years of payments. If you die after receiving 12 years of payments, there is nothing further payable to your beneficiary.

Canada Pension Plan 

Old Age Security 

There is a survivor allowance dependent on age and income level. Learn more about Old Age Security payment amounts (external link) .