Small benefit refunds
You may be eligible to receive a small benefit refund instead of a lifetime monthly pension if the commuted value of your pension benefit is less than a specific amount.
You are eligible for a refund of your pension if the commuted value of your pension is 20 per cent or less of the year’s maximum pensionable earnings (YMPE) in the year we calculate your benefit.
For example, in 2020, YMPE is $58,700. If you are retiring in 2020 and the commuted value of your pension benefit is less than 20 per cent of YMPE ($11,740 or lower), you can receive the commuted value of your pension as a lump-sum cash payment rather than a monthly pension over your lifetime. YMPE changes each year, so the threshold amount will change annually.
When you apply for your pension at or after your earliest retirement age, your pension estimate will show if you are eligible for a small benefit refund. If you are eligible and would like to receive an estimate of your refund amount, please indicate this on the option selection page included with your pension estimate. When your employer sends us your Employee Information at Termination/Retirement data, we will confirm whether you are eligible for a refund and, if so, the amount.
If you leave your job with a plan employer and have not reached the earliest retirement age, we'll send you a Termination selection statement form that outlines your options.
If you are eligible for a refund, you must choose to receive your pension in one of the following ways:
- Small benefit refund as a single cash payment
- Small benefit refund as a transfer to an RRSP, with any amount over your maximum transferable amount payable as cash
- Monthly pension payment
- Deferred pension (if you have not reached the earliest retirement age)
You may wish to speak with an independent financial adviser before making your final decision.
Should you die before retiring, your surviving spouse may also choose to receive a refund if the commuted value of your pension is 20 per cent or less of YMPE in the year of your death.