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Pension Glossary

Accrued benefit – The amount of pension earned to date in a defined benefit pension plan.

Accrual rate – The percentage of your highest average salary used to calculate your pension.

Annuity – A retirement income product that provides regular payments.

Beneficiary – The person (or persons) named to receive a benefit in the event of the member’s death.

Bridge benefit – An additional benefit payable from retirement to the end of the month in which the member turns 65.

Commuted value – The amount of money needed today to pay the member’s earned pension when the member retires.

Deferred pension – A pension set up when a plan member terminates before retirement. This pension is payable in the future.

Defined benefit pension plan – A pension plan that provides a pension benefit based on a formula.

Eligibility service – Service used to determine a member’s eligibility for retirement.

Excess contributions – The amount by which a member’s contributions with interest exceed half the commuted value of the member’s pension.

Guarantee period – The minimum length of time the full benefit will be paid.

Highest Average Salary (HAS) – A specified period of averaged highest pensionable salary.

Joint Pension – A pension payable as long as either the member or member’s spouse is alive.

Locked-in – Funds that cannot be withdrawn in cash and must be used to provide retirement income.

Locked-In Retirement Account (LIRA) – A locked-in tax-deferred savings plan.

Maximum transfer amount – The maximum amount you may transfer from a defined benefit pension plan on a tax –deferred basis.

Non-vested – Not entitled to a pension benefit.

Pension – Regular monthly payments from a pension plan to a person who has retired.

Pensionable salary – The salary on which a plan member makes pension contributions.

Pensionable service – Service used in a pension calculation to determine a member’s pension benefit.

Registered Retirement Income Fund (RRIF) – A retirement income product. The holder may vary the withdrawal amounts annually.

Registered Retirement Savings Plan (RRSP) – A tax-deferred savings plan.

Spousal waiver – A legal document used by a plan member’s spouse to give up benefits to which the spouse is entitled.

Spouse – Your spouse is:

  • the person to whom you are legally married; or
  • if you are not married, the person with whom you are living in a conjugal relationship, and to whom at least one of the following situations applies:
    • has been living with you in a conjugal relationship for at least 12 continuous months;
    • is the parent of your child by birth or adoption; or
    • has custody and control of your child (or had custody and control immediately before the child turned 19 years of age) and your child is wholly dependent on that person for support.

A spousal relationship with someone to whom you are legally married ceases upon divorce.

A spousal relationship with someone to whom you are not married ceases upon a separation of at least 90 days due to a breakdown in your relationship. The individual immediately resumes being your spouse if you resume living together in a conjugal relationship.

A married spouse takes priority over another person even if that person meets the definition of a spouse. You cannot have more than one spouse at any given time.

Survivor benefit – A benefit payable to the spouse of a retired plan member who dies.

Vested – Entitled to a pension benefit.