Editor's note: Part one of this pension question and answer series appeared in the February/March 1999 issue of The Communicator.

What qualifies as eligible pensionable service under the Memorial University Pension Plan?

• current service performed as a permanent employee;

• current contractual service where the initial contract is for a  minimum duration of six months to work a minimum of 20 hours per week;

• prior refunded university service;

• periods of eligible prior contractual service for which no  contributions were previously made;

• periods of up to two years while on an approved leave of  absence;

• periods of sabbatical leave;

• periods while in receipt of benefits under the university's long term disability plan;

• prior pensionable service transferred under the Portability of  Pensions Act from any of the following public sector plans:
          – Public Service Pension Plan
          – Teachers' Pension Plan
          – Uniformed Services Pension Plan
          – Members of the House of Assembly Pension Plan;

• certain prior refunded pensionable service performed with an employer participating in any of the public sector plans referred to above;

• periods of service transferred under a reciprocal transfer agreement with McGill University, the province of New Brunswick or the Government of Canada;

• eligible war service during the First and/or Second World Wars or the Korean Conflict.

What do the terms "vesting" and "locking-in" mean?

The terms vesting and locking-in go hand in hand with respect to entitlement to pension benefits. Vesting means that an employee's right to receive a pension benefit upon reaching retirement age is no longer dependent upon remaining in the service of Memorial University.

Locking-in means that the accrued pension benefit cannot be refunded as a lump sum cash payment upon termination of employment — it must be used to provide a retirement income payable for life. This does not necessarily mean, however, that locked-in funds have to remain in the Memorial University Pension Plan. Subject to certain restrictions, locked-in funds may be transferred, upon termination of employment, to a locked-in retirement account (locked-in RRSP), to another employer willing to accept the transfer or to an insurance company to purchase a deferred life annuity.

When do vesting and locking-in occur?

Employees are vested with respect to benefits earned prior to 1 Jan. 1997 upon completion of five years of pensionable service. Locking-in occurs in respect of service performed between Jan. 1, 1987 to Dec. 31, 1996, upon attainment of 45 years of age and completion of 10 years continuous employment or plan membership. There are no locking-in restrictions imposed for lump sum cash payments in respect of pre-1987 employee contributions. Benefits earned after 31 December 1996 are vested and locked-in upon completion of two years continuous plan membership.

     Example:
          Current date: March 31, 1999
          Plan entry: Jan. 1, 1996
          Total service: 3 years, 3 months
 
vested and locked-in service --> 2 years, 3 months (post-1996)
 

What is the normal retirement date under the Memorial University Pension Plan?

The normal retirement date is Aug. 31 next following attainment of age 65 except for employees whose birthdate is Aug. 31, in which case their normal retirement date coincides with their
65th birthday.

What are the options for early retirement?

Advanced                    between the ages of 50 and 55 with at
Retirement                   least 30 years of pensionable service;
 
                 • pension subject to a lifetime actuarial reduction of 0.5% per month times the
number of months between pension commencement and age 55;

Unreduced Early           between the ages of 55 and 60 with at
Retirement                    least 30 years of pensionable service; or
                                    between the ages of 60 and 65 with at
                                    least two years of  pensionable service;

Reduced Early              between the ages of 55 and 60 with a Retirement
                                    minimum of two years but less than 30
                                    years of pensionable service;
 
                  • pension subject to a lifetime actuarial reduction of 0.5% per month times the number of months between pension commencement and age 60.

For further information on the Memorial University Pension Plan, please contact the Benefits and Pensions Office at 737-7406.

Stay tuned for more pension Q and As in the future issues of The Communicator.