Your PSPP pension is an important and valuable financial asset. You qualify for a PSPP pension once you're vested, providing you with a secure, lifetime income once you retire.
- A PSPP pension is predictable. Your PSPP pension is based on a formula which uses your pensionable salary and years of service, and does not fluctuate with the stock market.
- Your pension is protected against the rising costs of goods and services (inflation).
- The PSPP is professionally managed, so you have no need to make difficult investment decisions.
- You might be able to start a pension as early as age 55.
- Your employer matches your contributions to the Plan.
- A PSPP pension is a pension for life.
A defined benefit pension plan is one of the best ways to invest in your future. Your PSPP pension will give you the confidence and peace of mind you need to plan your retirement.
The Value of a Defined Benefit Plan
A defined benefit (DB) pension such as PSPP offers predictability and security. The amount of your pension is predictable because it's based on a formula, not how much was paid into the Plan. This means the amount of your pension won't be affected by market adjustments and downturns in the economy.
The Plan is secure because it's backed by a well-managed pension fund that includes member contributions, employer contributions and investment earnings.
The Value of Being Vested
Once you're vested for a PSPP pension, you qualify for a secure, reliable monthly pension at retirement, paid for as long as you live.
You become vested after contributing to the Plan for two years as a full-time employee. You can become eligible for a pension before that if you transfer service from another plan, or buy back service you earned before contributing to PSPP. You must be vested in order to receive a pension when you retire. If you are not vested, you will receive only the money you paid into the Plan plus interest.
If you are contributing into the Plan on or after your 65th birthday, you're automatically vested, regardless of how much service you have purchased, transferred or earned.