Coordination is an option in PSPP that can allow eligible members who retire before age 65 to receive a temporary pension payment increase. However, it also results in a permanently reduced pension after age 65 when this temporary increase is removed and a lifetime coordination reduction begins.
This permanent reduction to your pension will continue regardless of changes to your federal benefits or to your other retirement income sources. If you select the coordination option, it is critical to ensure you will have enough income at age 65 to compensate for the permanent reduction to your PSPP pension. We suggest that you seek independent financial advice to make the choice best suited to your financial circumstances.
Am I Eligible for Coordination?
You're eligible for coordination if at age 65, when the permanent coordination reduction would begin, your monthly pension payment would be above a minimum threshold allowed by the Plan rules. For pensions that will commence in 2018, this threshold is $186.33/month.
If you're eligible for coordination, your Retirement Benefit Statement will show your coordination options. Prior to deciding whether to coordinate your pension, you should carefully review the different pension options that are available to you and select the option that best suits your individual circumstances.
How is My Coordination Amount Determined?
The amount of coordination shown on your Retirement Benefit Statement will be based on the maximum amount of Canadian Pension Plan (CPP) and Old Age Security (OAS) you may receive, and not based on how much CPP and OAS you will receive. You can also choose to coordinate a smaller amount if you prefer.
Your choice cannot be changed once your first pension payment has been made.
Use the Government of Canada's CPP/OAS calculators or talk to a representative at the Government of Canada at 1-800-277-9914 to get their estimation of how much CPP and OAS you will receive.
The following is an example of how coordination impacts your pension, before and after the temporary increase.