Medical Retirement - Operational Pension - Indexing

[u/Trick_Fig3092]

If I medically retire, will my pension be indexed right away? I will have 21 years of service and am 42 years of age.

I know a normal operational service pension requires you to get to the 85 factor to begin indexing (tho the percentages will accumulate from date of retirement until 85 factor)

[u/Vegetable-Bug251]

For the Federal Public Service there is no such thing as factor 85. The pension retirement rules in the FPS are either retire at age 55 with at least 30 years of pensionable service for an unreduced pension (employees who started before 2013) or retire with at age 60 with at least 30 years of pensionable service for an unreduced pension (employees who started after 2012).

To answer your specific question, if it is ultimately determined that you are eligible to medically retire right now, you would receive roughly 2% per year times 21 years of service times your average top 5 consecutive best salary. So if your average top 5 consecutive best years salary is for example $100,000 then multiply that by 42%, so your medical retirement pension would be $42,000 per year and it is indexed starting on January 1st of the year after you retire, with a pro-rated indexation for the first year depending on the month you medically retired the year before, and then full indexation on January 1st every year thereafter. There is no penalty reduction for your pension if you medically retired, much like there is if you retire non-medically, without the needed years of service to qualify for an unreduced pension.

[u/Limp_Belt3116 → u/Vegetable-Bug251]

Do they not receive money from other sources i.e. CPP-D and Sunlife top up....until age 65, in addition to pension?

[u/Vegetable-Bug251 → u/Limp_Belt3116]

 Not if the employee is medically retired

[u/Limp_Belt3116 → u/Vegetable-Bug251]

Interesting, someone told me they did. That there is  a sunlife top up. So if you medicallybretire and have 10yrs of service the only money you receive is a pension based on thosec10 years?

[u/Vegetable-Bug251 → u/Limp_Belt3116]

Yes if you are medically retired with 10 years of service you receive an immediate unreduced pension equal to the amount of years of service times 2% (roughly) times the average best 5 years consecutive salary. So if your average best 5 years salary after ten years of service is $100,000 then your immediate unreduced pension would be about $20,000 annually, I.e. $100,000 x 2% x 10 years. There is no additional “top up” provided and indexing would start immediately on January 1st of the year after your are medically retired. 

[u/Trick_Fig3092 → u/Limp_Belt3116]

You get sunlife top up to 70%

[u/Vegetable-Bug251 → u/Trick_Fig3092]

Only while not medically retired