How Your Pension is Calculated
SFPP is a defined benefit pension plan. Your pension is based on a formula that includes your pensionable salary and years of service, not how much you've paid into the Plan. The longer you contribute to the Plan and the higher your average salary becomes, the larger your pension will be.
There are a number of tools available to estimate your pension:
- The Pension Estimator lets you compare retirement scenarios. Once you enter values for average salary, pensionable service and retirement age, the tool applies the pension formula to estimate your pension.
- The Pension Projection Calculator uses your actual salary and pensionable SFPP service to project your pension. You'll need to register or log in to mypensionplan.ca.
SFPP Pension Formula
The formula we use to calculate your pension includes your:
- Pensionable Salary
Your pensionable salary in the formula is determined by calculating your Highest Average Salary—the 5 consecutive years your salary was highest.
- Pensionable Service
The maximum pensionable service you can accumulate in SFPP is 35 years.
An important part of the Pension Formula is the Year's Maximum Pensionable Earnings (YMPE). The YMPE is a figure, set each year by the federal government, which specifies the maximum earnings amount that can be used in calculating contributions to the Canada Pension Plan. In the pension formula, your Highest Average Salary is divided into two parts: the Highest Average Salary up to the matching average YMPE and the Highest Average Salary above the matching average YMPE. The years used in the matching average YMPE calculation correspond to the years used in your Highest Average Salary calculation.
As an example, the following are YMPE values for the most recent 5 years:
|Most Recent YMPE Values|
5-year average YMPE= $54,440
On top of your lifetime pension, you may receive the Bridge Benefit, which is automatically applied to your pension until you turn 65. To estimate your pension benefit during those years, add the formula for the Bridge Benefit to the annual benefit you calculated above.
To calculate your individual Bridge Benefit value, use the matching average YMPE used in the Annual SFPP Benefit calculation. Your Bridge Benefit will be equal to 0.6% of that matching average YMPE multiplied by your years of pensionable service.