# How is pension credit calculated

### Calculation

#### Example

If you earn \$85,000 in your five highest salary years and have 30 years of credit, your basic annual pension would be:

2% x Credit x YMPE average or "best-five" average salary = Basic annual pension

2% x 30 x \$85,000 = \$51,000

### Integration with the Canada Pension Plan (CPP)

You contribute less to the Teachers' pension plan on earnings covered by the CPP (\$53,600 for 2015) and your Teachers' pension is reduced to partially recognize benefits payable from CPP.

You can take an unreduced CPP retirement pension at age 65, or a reduced CPP retirement pension after age 60. Regardless of when you start your CPP retirement pension, at age 65 we'll reduce your Teachers' pension by an amount less than your unreduced CPP retirement pension. If you begin receiving a CPP disability pension, your Teachers' pension is reduced immediately.

### Reduced retirement pension

You're eligible for a reduced pension when you are at least 50 years old. Your reduced pension is calculated just like a regular retirement pension, and then reduced by a 2.5% or 5% reduction formula.

### How we measure service and credit

The length of your teaching career affects the amount of your pension and when you are eligible to receive it. We measure your plan membership in two ways:

This is the actual number of years, months, and days you have worked and contributed to the plan. We use this figure to calculate the amount of your pension.

This is the number of school years in which you have taught for at least a portion of the year. Qualifying years determine when you're eligible to receive a pension. Because of changes in the plan, there are different rules for measuring your qualifying years.

Source: www.otpp.com

Category: Credit