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 small benefit refund if the commuted value of your pension benefit is less than 20 per cent of the year’s maximum pensionable earnings (YMPE) in the year you apply for your pension.

For example, in 2017 the YMPE was $55,300. If you retired in 2017 and the commuted value of your pension benefit was less than 20 per cent of YMPE ($11,060 or lower), you could have received the commuted value of your pension benefit as a lump-sum cash payment, rather than as a monthly pension over your lifetime. YMPE changes each year, so the threshold amount will change annually.

When you apply for your pension, 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 small benefit refund amount, indicate this on your pension estimate and return it. We'll then send you a small benefit refund estimate.

Please note: We cannot provide you with your small benefit refund estimate until your employer sends us your termination/retirement data. For most active members, this data will not be available until after your pension effective date. If you requested a small benefit refund estimate when applying for your pension, we will confirm if you are still eligible for the refund and, if so, the amount.

You must then choose how you want to receive your pension in one of the following ways:

• Small benefit refund as a single cash payment (income tax will be deducted)
• Small benefit refund as a transfer to an RRSP, with any amount over your limit payable as cash (income tax will be deducted)
• Monthly pension payment

If you choose to receive a monthly pension payment, your first pension payment may be delayed as we may not be able to process that option as quickly as the other options.

You may want to speak with an independent financial adviser before making your final decision.