Pension overview
What does defined benefit pension mean?
Your pension at retirement is based on a pre-determined formula that considers your pensionable earnings and years of pensionable service. It is funded by contributions to the Plan made by you and by Canada Post, as well as the investment income generated by the Plan's assets. It does not depend on how much you contribute or how well pension fund investments perform.
When do I become a member of the Plan?
Your membership begins when you start making contributions to the Plan.
What will my pension be based on?
Your pension at retirement is based on a pre-determined formula that considers your years of pensionable service, up to a maximum of 35 years, your highest average earnings (HAE) and your average maximum pensionable earnings (AMPE).
Your pension benefit is made up of your lifetime pension, payable until your death, and may include a bridge benefit if you begin receiving your lifetime pension before age 65. The bridge benefit is meant to supplement your lifetime pension prior to age 65, which is the age you would normally begin receiving Canada Pension Plan/Quebec Pension Plan (CPP/QPP) benefits.
The bridge benefit is payable until you:
- reach age 65,
- die, or
- begin receiving CPP/QPP disability benefits,
whichever occurs first.
Your bridge benefit will be paid even if you've decided to start receiving your CPP/QPP benefits (except for CPP/QPP disability benefits) before age 65.
What is the formula used to calculate my pension?
This is the formula used to calculate your pension.
If your highest average earnings (HAE) is less than the average maximum pensionable earnings (AMPE)
| Lifetime pension | Bridge benefit | ||
|---|---|---|---|
| Before age 65 | 1.3% x HAE x pensionable service | + | 0.7% x HAE x pensionable service |
| After age 65 | 1.3% x HAE x pensionable service | No longer paid |
If your HAE is greater than the AMPE:
| Lifetime pension | Bridge benefit | ||
|---|---|---|---|
| Before age 65 | 1.3% x AMPE x pensionable service + 2.0% x (HAE - AMPE) x pensionable service |
+ | 0.7% x AMPE x pensionable service |
| After age 65 |
1.3% x AMPE x pensionable service + 2.0% x (HAE - AMPE) x pensionable service |
No longer paid |
When can I retire?
You can retire with an unreduced pension once you reach pensionable age.
Can I retire early?
The Plan allows you to retire up to 10 years before you reach pensionable age with an immediate reduced pension. Your pension is reduced because you will be receiving it over a longer period of time.
Are there other pension benefits available?
The Plan also pays benefits if you become disabled, your employment ends before retirement or in the case of death.