Pension Calculation Examples
1) Plan Member #1
Enrolment date – June 1, 1986
Retirement date – April 30, 2012
Age at retirement – 57 years, 6 months
Total years of credited service – 25.15
5 year average YMPE - $47,360
5 year highest average salary – $42,000 (average salary is below average YMPE)
Pensionable years
Years of
credited
service x
accrual
rate
1986/06/01 to 31-12/1989 3.25 x
1.65%
1990/01/01 to 1991/12/31 1.58 x
1.30%
1992/01/01 to 1999/12/31 8.00 x
1.50%
2000/01/01 to 2012/04/30 12.32 x
1.70%
Annual pension before age reduction
Highest
average
salary
x
$42,000
=
$ 2,252.25
x
$42,000
=
862.68
x
$42,000
=
5,040.00
x
$42,000
=
8,796.48
=
$16,951.41
Age reduction (see Appendix III, Immediate Pension) = 7.5% (2.5 years to age 60)
Annual pension with age reduction = 16,951.41 less 7.5% = $1,5680.05
2) Plan Member #2
Enrolment date – June 1, 1986
Retirement date – April 30, 2012
Age at retirement – 60 years
Total years of credited service – 25.15
5 year average YMPE - $47,360
5 year highest average salary – $55,000 (average salary is above average YMPE)
Pensionable years
Years of
credited
service x
accrual
rate
1986/06/01 to 31-12/1989 3.25 x
1.65%
1990/01/01 to 1991/12/31 1.58 x
1.30%
1992/01/01 to 1999/12/31 8.00 x
1.50%
2000/01/01 to 2012/04/30 12.32 x
1.70%
Portion of salary above average
25.15 x
YMPE
2%
Annual pension age 60 -no reduction
Highest
average
salary to
YMPE
x
$47,360
=
$ 2,539.68
x
$47,360
=
972.77
x
$47,360
=
5,683.20
x
$47,360
=
9,919.08
x
$7,640
3,842.92
=
$22,957.65
Highest Average Salary Calculation Examples:
Full time member (retiring June 30, 2012)
Year
(a) FTE (% of
Number
Actual
(b) Actual
Fulltime
year worked
of months timespan
Salary
equivalent
out of the
worked
earned
salary (b/a)
total time
during this
available to
period
work during
this period)
2012
1.0
6
6
25,000
25,000
2009
1.0
12
12
50,000
50,000
2008
1.0
12
12
48,000
48,000
2007
1.0
12
12
46,000
46,000
2006
1.0
12
12
44,000
44,000
2007
1.0
6
6
21,000
21,000
totals
60
60
234,000
234,000
Highest average annual salary = $234,000/60 months x 12months = $46,800
Part-time member with same pay rate (retiring June 30, 2012)
Year
(a) FTE (% of year worked
out of the total time
available to work during
this period)
0.80
0.50
0.60
0.45
0.50
1.0
Number of
months
worked
Actual timespan
2012
6
6
2009
8
12
2008
9
12
2007
6
12
2006
10
12
2007
6
6
totals
45
60
Highest average annual salary = $234,000/60 months x 12months = $46,800
(b) Actual Salary
earned during this
period
Fulltime
equivalent salary
(b/a)
20,000
25,000
28,800
20,700
22,000
21,000
137,500
25,000
50,000
48,000
46,000
44,000
21,000
234,000