Snapshot
The Non Academic Pension Plan is a defined benefit (or “DB”) pension plan. When you retire, the plan pays you a set, monthly pension for the rest of your life. Your pension will be calculated using a formula that includes the number of years you participated in the plan and how much you earned while working at USask.
- how contributions were made
- how your pension is calculated
- when you can start your pension
- what happens to your pension at different stages in your career—e.g., if you took a leave of absence or transferred to another plan
Contributions
Both you and the university contributed to this plan until Aug. 31, 2019 with the university funding the plan going forward.
When You Retire
You will receive a monthly pension for your lifetime.
Plus there’s an option for your spouse. If you die first, your spouse will receive your pension benefit.
How Much?
It calculated using a formula based on how long you participated in the plan and your top earning years while working at USask.
Investing
All contributions went into a common pension fund—the same fund that is used to pay out pensions to each of our retired plan members. This fund is invested by professional investment managers.
Your Contributions
Contributions were automatically deducted from your pay and were deposited into the pension fund. Each month, you contributed 8.5% of your pensionable earnings.
- Up to a limit set by Canada Revenue Agency
- Pensionable earnings do not include overtime pay, cost of living bonuses, additional earnings for part-time employees who are employed beyond their agreed to hiring status, unsociable hours differential or any other type of income.
The University's Contributions
You also received the benefit of contributions from the University.
- Matched your 8.5% monthly contribution
- Any additional contributions based on the advice of the plan's actuary
- The actuary looks at all of the pensions promised to plan members and measures that against the amount of money that is required to pay those pensions.
The plan actuary advises the University how much money needs to be put in to make sure the pension fund has enough money to meet these financial obligations. This is ongoing even though the plan is closed to new members.
Pension Calculation
One of the greatest advantages of a defined benefit pension plan is that you can calculate how much pension you will receive. That’s because your pension is based on a formula—simply plug in your numbers to see what you’ll get when you retire!
Average of your highest pensionable earnings in 48 consecutive months of participation.
Years and months that you participated in the plan.
Meet George
George works at USask and was a member of the Non-Academic Pension Plan for 20 years. He is looking at his early retirement options for now.
AUGUST 31, 2020
Age: 55
Highest average salary (4-year): $50,000
NAPP Pensionable Service: 19 years
Total USask Service: 20 years
George could retire early because he is 55 years old but it would be at a reduced rate because he doesn’t meet any of the unreduced early retirement criteria:
- Rule of 80 (age + Total USask Service)
- 30 years of pensionable service
- 60 years of age
Early Retirement Calculation (Rule of 80):
|
55
Age |
|
20
Total USask Service |
|
75
Years of pensionable service |
Calculating George's early retirement pension
Pension Calculation
|
2%
|
x
|
$50,000
Highest Average Salary
|
x
|
19
NAPP Pensionable Service
|
=
|
$19,000
Pension before reduction
|
Formula to calculate George’s reduction
|
0.25%
Reduction per month
|
x
|
60
No. of Months
|
x
|
$19,000
Annual pension before deduction
|
=
|
$2,850
Pension reduction
|
George’s reduced Pension
|
$19,000
Pension before reduction
|
–
|
$2,850
Reduction
|
=
|
$16,150
Yearly pension with deduction
|
George could retire early because he meets the Rule of 80, one of the unreduced early retirement criteria.
Early Retirement Calculation (Rule of 80)
Calculating George's Pension|
59
Age |
|
24
Total USask Service |
|
83
Years of pensionable service |
||
|
2%
|
x
|
$53,500
Highest Average Salary
|
x
|
19
NAPP Pensionable Service
|
=
|
$20,330
Pension
|
Calculating George's Pension
|
2%
|
x
|
$58,750
Highest Average Salary
|
x
|
19
NAPP Pensionable Service
|
=
|
$22,325
Pension
|
Retirement Dates
You’ve earned your retirement, now it’s time to enjoy it! When you retire, you receive a pension payment every month, for as long as you live. Much like your regular paycheque, it’s income you can depend on.
When can I retire?
The plan offers three retirement scenarios—in all cases, your retirement will take effect on the first of the month:
Early
The first of the month after your 55 birthday
Normal
The first of the month after your 65 birthday
Postponed
By the end of the year you turn 71
You can retire at any point along the way; different rules will apply depending on the date you choose.
You can retire as early as age 55 and any time before age 65—this is considered “early retirement.” Depending on when you retire, you may receive a reduced or an unreduced pension.
| 55 | 56 | 57 | 58 | 59 | 60 | 61 | 62 | 63 | 64 |
| Reduced pension unless you meet special criteria |
Unreduced pension starting at age 60
|
||||||||
To retire before age 60 with no reduction, you must:
- Have 30 years of USask pensionable service (NAPP + CAAT), or
- Your age + pensionable service must total at least 80
If you retire early (and don’t meet the special criteria), how much will your pension be reduced?
for each month that you retire before being eligible for an unreduced pension (that adds up to a total of 3% per year) This reduction applies for all the years you receive your lifetime pension.
If you retire at age 65, this is considered “normal retirement” age and you will receive a full (unreduced) pension from the plan.
You can retire after normal retirement age. This is considered “postponed retirement.” By law, you must begin your pension by the end of the year you turn 71.
Retirement Options
There are different ways you can choose to receive your pension—the plan has a default or “normal form,” or you can choose the “joint and survivor form.”
Normal form
If you’re single
- You get the “normal form” pension paid from the time you retire for the rest of your lifetime.
- The normal form is a single life guaranteed 10 year pension.
- That means if you die before receiving 10 years (i.e., 120 months) of pension payments, your remaining pension will be paid out to your beneficiary or estate.
Joint and Survivor form
If you have a spouse
- You get a pension paid from the time you retire for the rest of your lifetime.
- If you die before your spouse, he or she will continue to receive a percentage of your pension for the rest of his or her lifetime.
- You can choose the percentage paid to your spouse—100%, 75% or 60% of the pension amount paid to you.
- When you choose the joint and survivor form, your monthly pension will be less than if you were single. This is to account for the extra payments that may continue to your spouse.
You have the option of increasing your guaranteed pension payments to 15 years (i.e., 180 months). If you choose to receive your pension for a guaranteed 15 year period, your monthly pension amount will be less than the guaranteed 10 year period. This is to account for the extra payments that you may receive as a result of receiving your pension over a longer period of time.
The choice is yours
You can also choose the joint and survivor form—guaranteed 5, 10 or 15 years. If you die before receiving your guaranteed pension payments, your pension will be paid to your spouse (or your beneficiary or estate if your spouse has predeceased you). At the end of the guarantee period, your spouse will continue to receive a percentage of your pension for the rest of his or her lifetime. The monthly amount continuing to your spouse can be 100%, 75% or 60% of the pension amount paid to you.
George is married and wants to ensure that his wife Joan receives a portion of his pension if he dies before her. George decides to choose the 60% joint and survivor—guaranteed 10.
Here’s what his pension would look like:
In 2020
George Retires at 57
George receives a reduced pension to account for the extra payments that would continue to Joan if she survives him. At age 57, George’s joint and survivor pension amounts to $24,800 a year, or $2,067 a month, for his lifetime.
In 2025
George passes away
George passes away during his fifth year of retirement, so Joan will continue to receive $24,800 a year or $2,067 a month for the remainder of the guarantee period.
In 2030
Guaranteed period ends
When the guarantee period ends, Joan would receive 60% of George’s monthly pension for the rest of her lifetime. That means Joan would receive $14,880 a year, or $1,240 a month, for her lifetime.
The pension benefit amount for the joint and survivor form is based on a number of key factors, such as your age and your spouse’s age at retirement, interest rates in effect, and other assumptions. For your personalized estimate, contact the Pensions Office.
Life Events
There are certain scenarios during your career that can affect how you participate in the pension plan. Read on to see what happens to your pension if you…
Go on a disability leave
If you went on a disability leave, you were not required to make contributions. During your leave, you continued to earn pensionable service.
Experience a marriage breakdown
Your pension may be divided between yourself and your former spouse as part of a legal divorce. If you are required to transfer a portion of your pension to your former spouse, you will need to provide the Pensions Office with a written request and a copy of the court order or interspousal contract. This will reduce your pension when you retire.
Leave the University
If you are eligible for early retirement when you leave…
If you leave the University and are eligible to start your pension, you will go through the normal process as if you were retiring from the plan.
If you are not eligible for early retirement when you leave…
If you have less than two years of continuous service when you end your employment, you will receive a refund of your contributions, with interest. You can take this refund as a cash payment, less withholding taxes, or as a tax-deferred transfer to an RRSP.
If you have more than two years of continuous service, you have several options:
- Keep your pension in the plan and defer starting it until a later date—any time between age 55 and 65 (however, you may receive a reduced pension if you retire before age 60).
- Transfer your pension to another registered pension plan or a locked-in retirement account (LIRA).
If you choose a transfer, you will receive the greater of:
- The commuted (or “lump sum”) value of the pension you earned up to your last day as a plan member, or
- Two times your contributions, with interest.
Death before retirement
If you die before retirement, your beneficiary or estate will receive the greater of:
- The commuted (or “lump sum”) value of the pension you earned up to your death, or
- Two times your contributions, with interest.
If your beneficiary is your spouse, he or she can choose a:
- Lump-sum payment, less withholding taxes
- Transfer to a Registered Retirement Savings Plan (RRSP)
- Transfer to a Locked-In Retirement Account (LIRA)
- Transfer to a Prescribed Registered Retirement Income Fund (PRRIF)—if he or she is older than 55
- Transfer to an insurance company to purchase an annuity
- Transfer to another registered pension plan
If your beneficiary is not your spouse, he or she will receive a lump sum payment, less withholding taxes.
By law, your spouse must be the beneficiary of your pension, unless your spouse has waived this option by completing a waiver form. If you do not have a spouse, you can name anyone as your beneficiary.
The Big Picture
Whether you’re planning to travel the world or live a simpler life during retirement, your retirement income will come from more than just one place. The pension you receive from the University is a great start—but you’ll also receive government benefits to finance your retirement.
Each pay, you contribute a percentage of your earnings* to the CPP. The University also contributes the same amount on your behalf.
When you retire, you receive a pension from the CPP based on the number of years you contributed and how much you earned during those years.
The rules around CPP are subject to change; however, the current rules are:
Ages 60-65
- You can start an “early” pension
- Your pension is reduced by 0.6% for each month you begin before age 65
- This reduction is permanent
At 65
- This is the “normal” age to begin your pension
- You get a full pension
Ages 65-70
- You can “postpone” your pension
- Your pension is increased by 0.7% for each month you begin after age 65
- This increase is permanent
Once you begin your CPP, your payments will be adjusted each year based on the change in the Consumer Price Index.
*Up to the Year’s Maximum Pensionable Earnings (YMPE)
You need to apply for CPP and OAS at least six months before you would like your benefits to begin—they do not start automatically.
Get more information about government benefits online.
You do not make contributions to OAS; it is a benefit provided to all Canadian residents, regardless of employment status.
The rules around OAS are subject to change; however, the current rules are:
- OAS begins at age 65; however, you can delay it up to age 70 and receive a 0.6% increase for every month you delay starting it, up to a maximum of 36%
- You must be a resident of Canada for 10 years to receive the benefit
- If you are a resident of Canada for 40 years, you will receive the full benefit
When you file your income taxes each year, if your income is above a certain threshold, part of or all of your OAS benefit may be taken back (this is called a “clawback”).
You need to apply for CPP and OAS at least six months before you would like your benefits to begin—they do not start automatically.
Get more information about government benefits online.
One of the most tax-effective ways to save for retirement is through a registered retirement savings plan (RRSP).
- Contributions are tax-deductible—you get an immediate tax savings
- Investment earnings are tax-sheltered
- You don’t pay tax until you withdraw the money for retirement—and generally, retirees are in a lower tax bracket than during their “earning” years
There is a maximum you can contribute to an RRSP each year. You will see this amount on the Notice of Assessment you receive after filing your income taxes. You can leave your money in your RRSP until December 31 of the year in which you turn 71.
Pension adjustment (PA)
Your pension adjustment is calculated each year and reported on your T4 form. It is the value Canada Revenue Agency assigns to the benefit you’ve earned through the pension plan. Your PA decreases the amount of RRSP contribution room you will have for the following year.
Pension adjustment reversal (PAR)
If you end your employment and decide to take your pension with you (i.e., transfer it to another plan or to a LIRA), you may be entitled to restore some RRSP contribution room that you lost in previous years—known as a PAR. If you are entitled to a PAR, the University will send you a T10 form advising you of the amount.
USask has a retirement channel in PAWS that is full of valuable information for faculty and staff who are considering retiring in the next 2-3 years, including benefit options after retirment and a checklist to follow?
Stay Involved
Planning for retirement is important no matter what age you are. This checklist can help ensure that you’re taking care of your pension plan responsibilities.
Review your annual pension statement
Your annual pension statement is available on the PAWS portal.
It contains information about:- Your pension contributions and years of pensionable service
- How much pension you have earned so far
- Your beneficiary information on file
Note: If you have a spouse, your spouse must be named your beneficiary.
Create a well-rounded retirement plan
You should consider the type of lifestyle you’ll want to lead when you retire and then use one of the many online tools (the Canadian Retirement Income Calculator, for example) to figure out how much you will need to save. The Non Academic Pension Plan is one source of retirement income; you should also consider how government benefits will play a role and also how much you’ll need to save outside of the plan. A financial planner can also be a great asset to help you establish and meet your savings goals!
USask's Checklist
The University is responsible for overseeing, managing, and administering the Non Academic Pension Plan to make sure the fiduciary and other obligations of the plan are met. It also makes sure the plan operates in compliance with the Pension Benefits Act and the Income Tax Act.
Other Information
Plan Information
Annual Reports and General Meetings
Forms
- Change in Beneficiary
You can view your current beneficiaries by logging into your Total Rewards Statement under Survivor Benefits.
2023
2022
2021
2020
2019
2018
2017
- Annual General Meeting Presentation 1
- Annual General Meeting Presentation 2
- Annual General Meeting Notice
- Annual Newsletter
2016
- Annual General Meeting Presentation 1
- Annual General Meeting Presentation 2
- Annual General Meeting Notice
- Annual Newsletter
- Retirement Seminars
2015
Glossary
Beneficiary: The person you designate to receive death benefits from the Plan after you die.
Canada Revenue Agency Limits: USask pension plans are Registered Pension Plans, governed by pension legislation and subject to the rules of The Federal Income Tax Act. As a result, there are limits to the amount you can contribute. These limits are:
- 2021: $29,210
- 2022: $30,780
- 2023: $31,560
- 2024: $32,490
- 2025: $33,810
Canada Pension Plan (CPP): The Canada Pension Plan is a federal government program based on earnings-related contributions. It is indexed annually based on the change in the Consumer Price Index. Benefits start when you reach age 65 but may begin as early as age 60. CPP also includes other benefits: a death benefit, a survivors’ pension, and disability benefits before you retire.
Continuous Employment: Continuous Employment is your most recent, uninterrupted period of employment with the University as a permanent employee. Continuous Employment is not interrupted during periods of approved absence, including:
- jury duty
- authorized vacations and statutory holidays
- authorized absences (including sabbatical leave and administrative leave)
- qualified disability; or
- breaks of less than six months between termination of employment and re-employment with the University, provided you have not taken a refund of the contributions.
In all other cases, Continuous Employment is interrupted by termination of employment, retirement, or failure to return to work following an approved absence or disability.
Guarantee Period: Pension payments may be guaranteed for a specific period of time. If you die within this time, your pension payments are guaranteed to continue to your Spouse, beneficiary, or estate until the end of this specific period.
Life Annuity: A lifetime pension purchased through a contract with an insurance company. You receive monthly payments, the amount of which will vary depending on the type of annuity you select, the interest rates in effect when you sign the contract, and your age and your Spouse’s age when the annuity payments begin. The higher the interest rates and the older you are when payments begin, the higher the pension you will receive.
Locked-in Retirement Account (LIRA): Upon termination, you can transfer your pension plan benefits to a Locked-in Retirement Account (LIRA). A LIRA is an investment account in which you can keep your money invested. You cannot make withdrawals from your LIRA. When you reach the age of 55, and any time thereafter until you turn 71, you can use your LIRA to purchase a Prescribed Registered Retirement Income Fund (PRRIF) or a Life Annuity. You must transfer your LIRA to a PRRIF, or use it to purchase a Life Annuity before December 31 of the year in which you turn 71.
Old Age Security (OAS): Old Age Security is a government benefit that any person 65 or older is entitled to receive after meeting certain minimum residency requirements.
Pension Adjustment (PA): The value Canada Revenue Agency assigns to your benefit under the Pension Plan. Your PA will reduce your RRSP contribution room.
Pensionable Earnings: Pensionable Earnings refers to your University salary. It excludes any other earnings such as honorariums, fees, and summer session payments, and is subject to a yearly maximum. For members of the clinical medical staff, Pensionable Earnings is the academic component of the University salary only.
Postponed Retirement: Retirement date after your Normal Retirement Date.
Prescribed Registered Retirement Income Fund (PRRIF): If you are 55 years of age or older, upon retirement you can transfer your pension plan benefits to a PRRIF. A PRRIF allows you to keep your money invested but there is a minimum amount that must be withdrawn each year. There is no maximum withdrawal amount. Your spouse, if you have one, must sign a release in order for you to transfer your benefits to a Prescribed RRIF.
Registered Amount: Money is viewed as registered if the amount falls within Income Tax Regulations. It can be transferred on a tax-deferred basis to a registered savings vehicle. Investment income is tax-sheltered. Any withdrawals are taxable.
Registered Retirement Savings Plan (RRSP): A tax-deferred retirement savings vehicle. Contributions are tax-deferred up to Canada Revenue Agency limits. Investment income is tax-deferred. Any withdrawals are taxable.
Spouse: A person who is either:
- married to a member,or
- if a member is not married, a person with whom the member is cohabiting in a conjugal relationship at the relevant time and who has been cohabiting in a conjugal relationship continuously with the member as his or her spouse for at least one year prior to the relevant time.
Year’s Maximum Pensionable Earnings (YMPE): The earnings base used to determine Canada Pension Plan contributions and benefits. The level adjusts annually to keep pace with average wage increases in Canada.
Contact
Pension Office
- plan documents
- retirement information
- beneficiary changes
ConnectionPoint
- help with completing your enrolment form