The main purpose of your pension plan is to give you secure income to enjoy your retirement. Here’s what you can look forward to when the time comes.
Normal retirement starts the first day of the month following your 65th birthday (or on your 65th birthday if it falls on the first day of the month).
However, you can take early retirement any time after age 55. Depending on your age and years of service at retirement, your pension may be reduced. See What If You Retire Early for more information.
The main purpose of your pension plan is to give you secure income to enjoy your retirement. Here’s what you can look forward to when the time comes.
Normal retirement starts the first day of the month following your 65th birthday (or on your 65th birthday if it falls on the first day of the month).
However, you can take early retirement any time after age 55. Depending on your age and years of service at retirement, your pension may be reduced. See What If You Retire Early for more information.
Following retirement, you will receive a monthly income for the rest of your life. The amount is based on a formula that is the same for all FEI Plan members. Your annual pension income is calculated as:
Best Average Plan Earnings
The best (highest) average of your Earnings (measured over your best 36 consecutive months).
Average YMPE
Average YMPE over the same period used to determine the Best Average Earnings.
Credited Service
Years of service with FortisBC during which you contributed to the FEI Plan plus approved periods of long-term disability.
Note that there’s a difference between Credited Service and continuous service.
Continuous service alone refers to your years of employment with FortisBC (both Gas and Electric divisions), including periods of long-term disability and any approved leaves of absence. Continuous service is not used to calculate your monthly pension amount. However, it is used to determine your eligibility for retirement and early retirement reduction, if applicable.
Credited Service is used in the Pension Formula above to determine your monthly pension amount before any reduction for early retirement.
Your monthly pension will cease when you pass away. A death benefit would be payable to your beneficiary only if you the pension payments you received is less than your contributions with interest at the time of retirement. Additional payment options will be made available at retirement.
In this example, you have 35 years of Credited Service. Your Best Average Earnings (based on the highest 36 consecutive months of Earnings in the last 10 years of your employment) is $105,000 and the Average YMPE is $68,800.
Normal Retirement Calculation | ||
|---|---|---|
Annual pension | (1.4% x Best Average Earnings up to the Average YMPE + 2.0% x Best Average Earnings in excess of the Average YMPE) x years of Credited Service | |
= [(1.4% x $68,800 + 2% x ($105,000-$68,800)] x 35 years | ||
= [$963 + $724] x 35 years | ||
= $59,045 per year (or $4,920 per month) | ||
In this scenario, a monthly pension of $4,920 will be paid for your lifetime. Your monthly pension will be taxed similar to employment income at the time of payment, so the amount deposited to your bank account would be $4,920 less applicable withholding taxes.
Members can retire as early as age 55. However, a reduction for early retirement may apply. This reduction is equal to 3% multiplied by the number of years by which your pension start date precedes age 60.
Your annual pension will NOT be reduced if you are at least age 60 on retirement, or your age plus continuous service totals 90 years.
In this example, you are retiring at age 57 and have 15 years of Credited Service. Your continuous service is also 15 years, which means that your earliest unreduced retirement date will be age 60 (since your age plus continuous service will be less than 90 years).
Your Best Average Earnings is $75,000 and the Average YMPE is $68,800.
Early Retirement Calculation | ||
|---|---|---|
First, calculate your pension entitlement for your Credited Service, again using the same formula as the normal retirement example:
| ||
Unreduced annual pension | (1.4% x Best Average Earnings up to the Average YMPE + 2.0% x Best Average Earnings in excess of the Average YMPE) x years of Credited Service | |
= [(1.4% x $68,800) + 2% x ($75,000-$68,800)] x 15 years
| ||
= [$963 + $124] x 15 years | ||
= $16,305 per year (or $1,358 per month) | ||
Then, subtract the early retirement reduction {3% x years before age 60 (3 years)} = 9%
| ||
Reduced annual pension | = $16,305 x (100% – 9%) | |
= $14,837 per year (or $1,236 per month) | ||
In this scenario, your $1,236 pension benefit, less applicable withholding tax, will be deposited to your bank account each month following retirement for the rest of your life.
In this example, you are retiring at age 59 and have 31 years of Credited Service. Your continuous service is also 31 years, which means that you are eligible for immediate unreduced retirement since your age (59) plus continuous service (31) is 90 years.
Your Best Average Earnings is $105,000 and the Average YMPE is $68,800.
Early Retirement Calculation | ||
|---|---|---|
First, calculate your pension entitlement for your Credited Service, again using the same formula as the normal retirement example:
| ||
Unreduced annual pension | (1.4% x Best Average Earnings up to the Average YMPE + 2.0% x Best Average Earnings in excess of the Average YMPE) x years of Credited Service | |
= [(1.4% x $68,800) + 2% x ($105,000-$68,800)] x 31 years | ||
= [$963 + $724] x 31 years | ||
= $52,297 per year (or $4,358 per month) | ||
In this scenario, your $4,358 pension benefit, less applicable withholding tax, will be deposited to your bank account each month following retirement for the rest of your life.
When you retire, you’ll have a choice of pension payment options, each of which will pay you a monthly income for the rest of your life. You will select the option that works best for you at the time of your retirement. Each option is expected to pay out the same Present Value over your lifetime and/or your Spouse’s lifetime.
The normal form of pension gives you a lifetime pension paid on the first business day of each month beginning on your retirement date. When you pass away, should your accumulated payments be less than what your contributions with interest were at retirement, the difference will be payable to your beneficiary.
Your retirement statement will include a number of additional payment options for you to consider. Each option will be equal in Present Value to the normal form of pension.
Under provincial pension legislation, your Spouse at retirement is entitled to a survivor’s pension. This means that the minimum form of pension you can elect if you are married at retirement is a joint and survivor pension in which 60% of your pension continues to your Spouse when you pass away. If you wish to elect a form of pension that provides a lower level of spousal benefits, your Spouse will have to sign a spousal waiver declaration.
A detailed retirement process can be found on Connector. Please take note of the following:
Pension estimates and copies of your annual pension statements are available online using the Pension Web Portal. Feel free to contact TELUS Health for assistance with the Web Portal, or the FortisBC Pension Department for additional support.
Pension Web Portal
Log in instructions
Government benefits like Canada Pension Plan (CPP) and Old Age Security (OAS) are paid to eligible employees IN ADDITION to the FEI Plan monthly pension. For information on government benefits, contact Service Canada.
