Plan Details
Defined Benefit Pension Plan
Pension plans generally fall into one of two categories - defined benefit plans and defined contribution plans. SFPP is a defined benefit plan, which means your monthly pension amount when you retire is based on your length of service, the average of your five highest consecutive years' pensionable salary (highest average salary) and the legislated benefit rate. With a defined contribution plan, generally members are responsible for investing pension contributions with your pension amount then directly depending on your investment success.
Contributions to SFPP
Employers, employees and the Government of Alberta contribute to SFPP, at rates when combined with investment income are expected to provide for the benefits payable. The SFP Board conducts actuarial valuations and reviews contribution rates for employers and employees at least once every three years.
Pension Benefits
As an SFPP member, you are eligible for an annual pension at retirement after five years of pensionable service. You may retire with an unreduced pension after 25 years of pension service at any age.
If you are age 65 when you stop participating in the Plan, you qualify for a pension even if you do not have five years of pensionable service.
When you retire, SFPP will pay a benefit to you based on your highest average pensionable salary, length of pensionable service and a legislated benefit rate. Before you turn 65, your pension is calculated using 2 per cent of your highest average five-year salary multiplied by your years of pensionable service. However, 0.6 per cent of the 2 per cent accrual rate paid before age 65 is a bridge benefit. At 65 (when you will likely begin to receive federal pensions) the bridge benefit is no longer paid. The lower pension will then be paid for as long as the pension is paid.
Termination Benefits
With five years of service, you become vested. This means you are eligible to receive a pension at retirement or, if you leave SFPP, you are eligible to receive the value of the pension you have earned on your service. This value is called the commuted value. If you have more than five years of service but less than 25 years of service and are under 55, you are entitled to withdraw a commuted value.
