Answers to Common Questions

Transfer Values and Lump Sum Payments
Why are my Pensionable Service and Qualifying Service amounts different?
What does the information on my Benefits Statement mean?
Does severance affect my pension or insurance?
Am I entitled to severance pay?
What is the best time for me to retire?
How does saving 50 days vacation for retirement increase my pension?
Should I choose to integrate with the Canada Pension Plan (CPP) and/or Old Age Security (OAS) at retirement?
When should I expect my first pension payment when I retire?
Can I borrow from the monies that I've contributed to the Fund?
What is bridging?
What is the Rule of 80?
Is health insurance available in retirement?

The transfer value of your pension is almost always available for transfer out of the pension plan:

1.  when you cease to be an employee under the plan, even if you are eligible for a retirement pension,

2. to your eligible spouse or partner following your death if you are not yet retired, or

3. to your former spouse or partner if you separate from him or her.

You typically find transfer values on your Annual Employee Benefits Statement in both the termination and death sections, shown as a refund or lump sum transfer.

The transfer value of a pension is our estimate of its current value. It’s the amount of money we estimate you would need today, if reasonably invested, to pay for your monthly pension in the future. We must follow provincial pension law and guidelines established by the Canadian Institute of Actuaries in calculating these amounts.

A transfer value is estimated based on a variety of assumptions. These assumptions include how long we expect you to live, when you are expected to start drawing retirement income, and how much interest your money will earn if invested in certain bonds. It’s also based on factual information including the amount of your pension and when you are entitled to receive it. Transfer values tend to increase over time. They don’t however tend to increase consistently or on a straight line, but fluctuate up and down, mostly due to changes in current interest rates. A transfer value determined at a particular date may be less if determined at a future date.

In a June 15, 2004 press release, Brian FitzGerald, Canadian Institute of Actuaries President said of changing transfer value (commuted value) standards that “The goal is to ensure a fair and up-to-date method for calculating pension commuted values and to serve the public interest by developing a standard that will help assure the security of peoples’ pensions, now and into the future. Maintaining viable commuted values is important for defined benefit (DB) plan members. If too little money is available to terminating plan members, their ability to take money out will not be a fair option for them. If too much money is available to terminating plan members, this weakens the financial position of pension plans”.

Calculation of transfer amount for some events on or after January 1, 2012 - Changes to the method of calculating transfer values are described in our newsletter, available here.

Why are my Pensionable Service and Qualifying Service amounts different?

Pensionable Service is the time on which you are contributing or contributions are being made on your behalf to the Fund. For example, if you worked 1/2 time in 2001, your Pensionable Service for 2001 would be .5000.

Qualifying Service is employment (or combined periods of employment) that is unbroken by resignation, termination or retirement except for a temporary absence/layoff. A temporary absence/layoff is considered to be a period of employment if the absence/layoff does not exceed 52 consecutive weeks. For example, if you worked 1/2 time in 2001, your Qualifying Service for 2001 would be 1.0000.

As well, a difference between your Pensionable Service and Qualifying Service could be due to Pensionable Service using pay periods to determine service while Qualifying Service uses calendar days to determine service.

What does the information on my benefits statement mean?

Section 1

Check to make sure all your personal data is accurate. If you feel your service is inaccurate, please contact your Human Resource department. Please include your PIN [?] for all inquiries to our office.

Section 3

The lifetime pension amount is prorated based on your prior years' service and earnings up to the retirement dates. Any increase in salary will adjust these amounts.

Other Sections

Questions about your Benefits Statement? Contact us.

Does severance affect my pension or insurance?

No.

Am I entitled to severance pay?

We’re not aware whether a member will be entitled to severance or to how much he or she might be entitled.

We’d expect that any entitlement to severance pay would be determined by your human resource or payroll department and suggest you contact them. If your severance depends on whether or not you retire in accordance with the provisions of the pension plan, it’s your employer who would decide whether or not you’ve met that requirement rather than the Board. An employer or union may decide to use the Board’s interpretation of retirement, but that doesn’t change the fact that it’s the employer or union’s decision and ultimately their interpretation. The Board would therefore not answer questions regarding interpretation, and these would best be taken up with the employer or union who entered into the severance agreement. The Board’s role is to administer the pension and insurance plans. Severance does not affect pension or insurance.

What is the best time for me to retire?

This is a personal decision. You should contact the Canada Revenue Agency (CRA) if you are concerned about tax implications.

How does saving 50 days vacation for retirement increase my pension?

At retirement, any remaining vacation time (maximum 50 days) is deemed Pensionable Earnings when it is paid out to the member. Pension contributions will be deducted from the vacation pay and the vacation pay is added to the final years earnings. This may increase your monthly pension at retirement.

Should I choose to integrate with the Canada Pension Plan (CPP) and/or Old Age Security (OAS) at retirement?

This is a personal decision. If integrating with CPP, you would receive advances from the CSSB for CPP until your 60th birthday, at which point, your pension from the CSSB would be decreased for your lifetime. It is your responsibility to contact CPP approximately 6 months prior to turning age 60.

If integrating with OAS, you would receive advances from the CSSB for OAS until your 65th birthday, at which point, your pension from the CSSB would be decreased for your lifetime. It is your responsibility to contact OAS approximately 6 months prior to turning age 65.

When should I expect my first pension payment when I retire?

Pensions are paid at the end of each month, with direct deposit occurring on the second last banking day of the month.

If your completed retirement forms are received and processed on time, your first pension payment would normally be:

• At the end of the month in which you retire, if you retire on or before the 20th of the month, or
• At the end of the next month, if you retire after the 20th of the month.

Your pension is payable from your date of retirement, and your first monthly payment will be pro-rated if you retire part way through a month. However, in order to make sure that your first pension payment is not delayed, it is important that your completed retirement forms and supporting documentation be provided to us at least a month or two prior to your retirement date.

Delays in your first pension payment could occur if forms and supporting documentation are not provided on a timely basis, or if forms are incomplete. Because of the significantly higher number of retirements being processed in April and December, it is especially important to provide your forms on a timely basis if you are retiring in one of these months.

Your pension will be paid on an estimated basis until we have received all required documentation and verified the information provided by your employer. Estimates are based on the most recently verified service and earnings information on our records, and may not yet reflect current year information.

Can I borrow from the monies that I've contributed to the Fund?

Borrowing contributions from a Registered Pension Plan (RPP) is not allowed under the Income Tax Act. As well, financial institutions will not allow contributions in an RPP to be used as collateral.

What is bridging?

If you retire before the age of 60 and do not meet the Rule of 80, a bridging benefit would be paid to you until age 65. Bridging offsets the increase in the reduction for early retirement.

What is the Rule of 80?

The Rule of 80 is when the combination of your age (minimum age 55) and qualifying service equals 80 or more e.g. Age 55 with 25 years of qualifying service or more (includes full and part years of age and eligible service). If retiring between the ages of 55 and 60 and you meet the Rule of 80, there would be no reduction for early retirement.

Is health insurance available in retirement?

Manitoba Blue Cross group health insurance is provided to some pension recipients. The Board’s mandates include the administration of the pension and life insurance plans, but not retiree health insurance.

The Pension and Insurance Liaison Committee acts as policy holder and makes decisions about eligibility and coverage.

The Board has agreed to perform some of the administrative services on behalf of the Liaison Committee. This includes providing most retiring members (excludes Red River College retirees) with an application form and a written summary of coverage. Where a member elects coverage, the Board has also agreed to deduct premiums from the member’s pension and remit those premiums to Blue Cross.

The Board is not responsible for the Blue Cross retiree plan and does not administer or adjudicate enrollment or claims. The Board can advise what premium we are deducting (based on the direction of the member and Blue Cross), but would not answer questions regarding claims, eligibility, coverage, or deductions.

Any questions or requests for changes in coverage should be referred to Manitoba Blue Cross. Any comments regarding eligibility, costs or coverage should be referred to the Liaison Committee.

Any persons wishing to rely on the information provided from the above links should consult directly with the source of the information.

+ Larger Font | - Smaller Font