A to Z
Pensions can be complicated. This glossary can help explain the language.
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| Accrual rate |
The multiplier used in the pension formula, along with your pensionable service and earnings, to calculate your lifetime pension. |
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| Active member | A member who is currently making contributions to the pension plan, on an approved leave of absence, receiving benefits from an approved long-term disability plan or still working but no longer contributing because they've accrued 35 years of service. | |
| Actuary | A financial professional who independently conducts a review of the plan’s funded position at least every three years. | |
| Actuarial valuation |
A review of the plan’s funded position, done at least every three years by the actuary. The valuation determines the financial position of the plan and the future contribution rates needed to ensure its long-term funding. The actuary determines how much money the plan needs to pay pension benefits by making assumptions about future investment returns, future inflation rates, future increases in salaries, retirement ages, life expectancy and other factors. |
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| Arrears | Arrears are a period of time when you and your employer should have contributed to the plan but did not. | |
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| Beneficiary |
The person(s), trustee(s) or organization(s) that are designated to receive your pension benefit after you die. If you have a spouse, they automatically become your primary beneficiary (unless they waived their right). |
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| Benefit | Any entitlement granted to a member or beneficiary under the plan rules, regardless of whether it is a lifetime entitlement. Benefits include a commuted value, pension, refund, bridge benefit, temporary annuity, monthly benefit, etc. | |
| Bridge benefit |
A temporary monthly amount paid in addition to the lifetime pension. It is payable from your retirement date until you turn 65 or die, whichever comes first. For regular members, the bridge benefit applies only to service up to March 31, 2018. |
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| Buying service |
See “purchase of service.” |
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| Commuted value | A lump-sum value based on the amount of money the pension plan would need to put aside today, at current interest rates, to pay for your future pension at retirement. | |
| Compassionate care leave | Time taken away from work to provide care and support to a family member who has a serious medical condition with a significant risk of death within 26 weeks. You may be eligible to buy back this time. |
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| Consumer price index (CPI) | The CPI is a measure of the rate of price changes for goods and services bought by Canadian consumers. It is one of the factors used to calculate inflation adjustments for pension benefits. |
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| Contributory service | You get a month of contributory service for every month during which you make a contribution to the plan (or are deemed to have made a contribution). It’s used to determine if your pension will be reduced and by how much. | |
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Critical illness or injury leave |
Unpaid leave to care for a family member whose health has significantly changed due to critical illness or injury, with the result that the life of the family member is at risk. The leave entitlement is 36 weeks within 52 weeks to care for a family member under the age of 19, and 16 weeks within 52 weeks for a family member who is 19 years of age or older. You may be eligible to buy back this time. | |
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| Deferred pension | If you stop working and contributing to the plan and do not take your pension benefit, you may apply to receive a pension benefit in the future. | |
| Defined benefit plan |
A pension plan that provides you a lifetime pension based on a specific benefit formula. Your entitlement to a lifetime benefit is independent of contributions and determined by a formula that includes factors such as your highest average salary, how much service you earned and a set accrual rate. |
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| Disability benefit | A monthly payment granted to a member deemed “totally and permanently disabled” in accordance with section 60 (1) of the plan rules. Though calculated like a pension, a disability benefit terminates if a member is no longer considered totally and permanently disabled. Therefore, it is not necessarily a lifetime entitlement. | |
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| Earliest retirement age | The earliest age you can start receiving your pension. | |
| Entry age normal cost |
The contribution rate required to pay for future years of service in the pension plan as determined by the actuarial valuation. |
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| Highest average salary (HAS) |
The average of your five highest years of pensionable salary. To calculate this average, the plan uses the best five years of full-time-equivalent earnings from your entire time with the plan. When you retire, your pension is based on a formula that uses your highest average salary. |
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| Inactive member | If you terminate your employment and keep your benefit in the pension plan but are not currently receiving a pension benefit from the plan. | |
| Inflation adjustment | The inflation adjustment is a non-guaranteed cost-of-living adjustment to your monthly pension payment. The inflation adjustment is based on the Canadian consumer price index and is applied to your pension in January each year if there are sufficient funds in the plan’s inflation adjustment account (IAA). The inflation adjustment is granted at the discretion of the board. | |
| Inflation adjustment account (IAA) |
An account that holds a portion of member and employer contributions, earning investment income. It funds inflation adjustments that may be granted on top of retired members’ monthly pension income to help offset the effects of inflation. |
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| Joint life option |
A monthly pension guaranteed to be paid for your lifetime and your spouse's lifetime. Should you die before your spouse, they will receive your monthly pension (or a portion of your monthly pension) for the remainder of their life. |
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| Latest retirement age (LRA) | The latest age you can start receiving your pension. You must start receiving your pension by December 1 of the calendar year you turn 71. Judges and masters are the exception to this rule. |
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| Leave of absence |
An employer-approved absence from work, with or without pay. You may be eligible to buy back time for the period of the leave to increase your pensionable time. |
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Leave respecting domestic or sexual violence |
If you or an eligible person in your daily care has experienced or is experiencing domestic or sexual violence, you may take leave to seek medical attention, counselling or other social or psychological services, or legal advice, or to seek new housing if you or an eligible person has experienced domestic or sexual violence. You may be eligible to buy back this time. | |
| Lifetime pension |
The portion of a pension benefit paid out over your lifetime. Depending on the option you select at retirement, payment may continue to your beneficiary(ies). It does not include the bridge benefit or temporary annuity. |
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| Limited member |
Your spouse or ex-spouse who applied to the plan to become a “limited member” following your separation or divorce. They are entitled to a portion of your pension benefits. |
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| Locked-in | Pension plan funds that cannot be paid in cash. They must be used to provide a lifetime pension benefit. | |
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| Marital breakdown | Separation or divorce | |
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| Non-contributory service | A period when you worked for your employer, but you did not contribute to the plan because you weren't eligible to contribute (e.g., probationary period or casual employment). | |
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| Past service | A period when you worked for your employer before your employer joined the plan. You may be eligible to buy past service. | |
| Pension adjustment |
The value Canada Revenue Agency (CRA) assigns to your pension benefit that has accumulated in a registered pension plan during a calendar year. Your pension adjustment is only used to adjust your RRSP room for the following calendar year. |
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| Pensionable salary | Portion of your salary used to calculate pension contributions, benefits and purchase of service costs. | |
| Pensionable service | The actual time you work while contributing to the plan or are deemed to have contributed. This may include service you’ve purchased or transferred from another plan. | |
| Plan administrative agent | British Columbia Pension Corporation. The corporation provides professional pension services to the plan. One of Canada’s largest pension service providers, the corporation serves the largest public sector pension plans in British Columbia, representing more than 600,000 members and their employers. Services include providing plan information to members and employers, managing contributions and member records, paying pensions, and providing policy, financial and communication services to the board. | |
| Plan administrator | Public Service Pension Board of Trustees. The board of trustees is responsible for the administration, management and oversight of the plan. The board may delegate investment or administrative services to a plan agent, but ultimately it has a fiduciary duty toward the plan’s members and other beneficiaries. This means the board is required to act in the best interests of plan members and any other person to whom a benefit is owed. | |
| Plan investment agent | BC Investment Management Corporation (BCI). BCI provides investment management services for the plan’s funds. This includes managing investments and loans. BCI also provides policy advice, strategic communications advice and financial modelling services. | |
| Plan partners |
Key stakeholders in the joint trusteeship governance structure of the plan. The plan partners include a member partner (British Columbia General Employees’ Union) and an employer partner (Government of BC). Together, they provide guidance to the Public Service Pension Board of Trustees on managing the pension plan and pension funds. |
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| Pre-retirement death benefit | A benefit paid by the pension plan to your beneficiary(ies) if you die before retiring. | |
| Pre-retirement leave | Any earned leave banks and allowances you take as paid absence from work, right before you start your pension. | |
| Public safety member | Correctional officers, probation officers, youth probation officers appointed under section 2(1) of the Correction Act or under 24(1) of the Youth Justice Act. They are employed in a correctional centre with BC Corrections. Public safety members also include full-time and regular part-time ambulance paramedics in CUPE Local 873. Public safety members have different plan designs and early retirement provisions. All other plan members are designated as regular plan members. | |
| Purchase of service | Buying back eligible periods of pensionable and contributory service to increase your future benefit. | |
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| Rate stabilization account |
A rainy-day fund that accumulates interest and may be used to help offset future contribution rate increases for members and employers. The fund will be drawn from if future valuations determine the plan has an unfunded liability and requires contribution rate increases. |
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| Reduced pension | If you apply for a pension on or after your earliest retirement age, but do not meet the age and contributory service requirements for an unreduced pension, your pension will be reduced. | |
| Regular member | A member who does not qualify for a public safety designation. Most plan members are regular members. | |
| Retirement allowance | An amount of time or sum of money that long-serving BC public service employees may be eligible for, which can be taken as a pre-retirement leave, cash payout or deposit into a registered retirement savings plan. If you opt for a pre-retirement leave, you will continue to make contributions to the plan and accrue pensionable service during this time. | |
| Retired member | A person receiving a pension from the plan; this includes a person who receives a pension following the death of a member. | |
| Rule of 85 | A formula to determine a correctional officer’s eligibility for an unreduced pension. If an officer’s age plus contributory service equals 85 or more, they are eligible for an unreduced pension. The rule of 85 also applies to regular members on service earned up to April 1, 2018. | |
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| Shortened life expectancy | If, before retirement, you have a medically certified terminal illness or disability likely to considerably shorten your life, you may choose to convert the pension, or part of it, to a payment or series of payments for a fixed term. | |
| Single life option |
A monthly pension guaranteed to be paid for only your lifetime. When you retire you can select a pension option guarantee of 5, 10 or 15 years for a beneficiary. This means if you pass away within the guarantee period, your pension is paid to your beneficiary as a pension or a lump sum based on the remainder of the guarantee period. |
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| Spouse | Your spouse is someone you are married to and have not been living separate and apart from for a continuous period longer than two years or someone you have been living with in a marriage-like relationship for at least two years. | |
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| Temporary annuity |
An additional monthly payment you may purchase to increase your monthly pension payments until you turn 65 or die, whichever comes first. The annuity cost lowers the amount of your lifetime pension. |
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| Termination of employment | You no longer work for your employer. Exceptions are if you are on layoff or if you leave one employer that participates in the plan and participate with a new employer within a month. | |
| Transfer agreements or reciprocal transfer agreements | An agreement between pension plans that allows you to transfer your eligible service from one pension plan to another. | |
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| Unreduced pension | A monthly pension benefit with no reductions included in the pension benefit formula. | |
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| Vested | Once you have made a contribution to the pension plan you are vested. This means you will be entitled to receive a pension benefit based on the defined benefit formula. | |
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| Year’s maximum pensionable earnings (YMPE) | A salary limit set by the federal government each year for the purposes of determining the maximum annual contributions workers make to the Canada Pension Plan.
It may be used as part of the pension formula to calculate contributions and pension benefits for certain periods. |
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