Reduced pension

If you are vested and age 55 or older, but aren’t yet eligible for an unreduced pension, you have the option of choosing an immediate reduced pension. (Other options may include taking a deferred pension or transferring the value of your pension to another pension plan.)

Under the reduced pension option, your pension is calculated using OPTrust’s basic pension formula (not including the CPP reduction) and is then reduced by 5% for each year you are under age 65. When you turn 65, your pension will be reduced for integration with the Canada Pension Plan.

EXAMPLE: Sean’s Reduced Pension

Sean is planning to leave his job when he turns 62. At that time, he will have 16 years of credit in the OPSEU Pension Plan. As a result, he will not qualify for an immediate unreduced pension.

Because he is vested and over 55, Sean has the option of taking an immediate reduced pension. Under this option, his basic OPTrust pension would be reduced by 15% (3 years x 5%).

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