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Frequently Asked Questions for Active Members

You will have the choice of leaving your benefits in the plan and receiving a pension at retirement (payable unreduced at your normal retirement date), or of transferring the Commuted Value of your pension to a Locked-In Retirement Account or to another registered pension plan (if that plan will accept it) on a tax-sheltered basis. However, please note that the Income Tax Act imposes limits to the amount that can be transferred from a registered pension plan on a tax-sheltered basis.  If your Commuted Value exceeds this limit, the excess amount shall be payable as cash and will be subject to withholding tax.  There may be an opportunity for you to tax-shelter a portion or all of your excess amount (if applicable) if you have available RRSP contribution room.

 

If your annual pension payable at your normal retirement date is less than 4% of the Year's Maximum Pensionable Earnings (“YMPE”) in the year your employment terminates, or the Commuted Value of your pension is less than 20% of the YMPE in the year your employment terminates, your benefit is considered to be a “small benefit” and may be payable as cash subject to withholding tax.

 

If your contributions with interest to the plan (excluding any DC account balances) exceed 50% of the total value of your pension benefits, you may receive the excess as a taxable cash payment, or transfer it to your tax-sheltered personal RRSP.

A Commuted Value represents today’s value, as a lump-sum, of the lifetime benefit payable to a member upon retirement. Conceptually, the Commuted Value represents the amount of money that would be required today, and invested in high quality government bonds, to eventually provide you with the same pension benefit as offered by the pension plan.

 

Commuted Values are calculated using assumptions prescribed by the Canadian Institute of Actuaries and assumptions determined by the Pension Committee. As of today, these assumptions can be outlined as follows:

 

Mortality: Recommended mortality rates (unisex) and improvement scale from the Canadian Institute of Actuaries’ Final Report on Canadian Pensioner Mortality – published in February 2014.

 

Interest rates: Based on Government of Canada medium and long-term benchmark bond yields – published monthly. One rate applicable for the first 10 years; another rate applicable for all years thereafter.

 

Other assumptions (determined by the Pension Committee by recommendation from the Plan’s actuary):

Percentage male/female

Percent married at retirement

Spousal age difference
 

All things being equal, a younger employee would have a lower Commuted Value because they would have a longer period of time to invest. A lower interest rate would yield a higher Commuted Value since you would require a larger investment to achieve the same pension.

The HRM Pension Plan is a Defined Benefit (“DB”) pension plan, which means that a member’s pension is determined by a formula and not the dollar amount contributed. Under the DB provision of the plan, your benefit entitlement is determined by the following formula: 2% x Best Average Earnings x Credited Service, less any reduction for early retirement (if applicable).

 

Your benefit is funded in equal parts by DB employee and DB employer contributions. The DB contributions are invested in the pension fund and these DB contributions plus the investment income are used to pay for the DB benefit.

 

In Nova Scotia, your DB employee contributions (with interest) can fund at most one half of the Commuted Value of your benefit. The remainder of the value must be funded by the DB employer contributions.

 

If your DB employee contributions (with interest) exceed 50% of the Commuted Value of your benefit, you will receive, in addition to your pension benefits, a partial refund of your contributions.

 

If you make additional optional contributions to the Defined Contribution (“DC”) provision of the plan, you are entitled to receive the Employer DC contributions plus the investment return on the Employer DC contribution.

Vesting means that you are fully entitled to your pension benefit.

 

Prior to June 1, 2015: The Plan Text and pension legislation required that members, who were not retirement eligible, be in the pension plan for two years before they were “vested”. If a member left employment before being eligible to retire and before meeting the two-year vesting requirement, the member would have received a refund of their employee contributions with interest. The member would not have been entitled to the pension benefit they had accrued. If a member left employment after being eligible to retire or after meeting the two-year vesting requirement, the member would have been entitled to a pension benefit from the plan.

 

Pension legislation changed on June 1, 2015: Now all members are immediately vested; which means, when you end your employment you are entitled to a pension benefit. The options for payment of the pension benefit depend on whether you are retirement eligible or not. If you are retirement eligible when you end your employment, you would be entitled to an immediate monthly pension. If you are not retirement eligible you would be entitled to a deferred pension or a commuted value payout.

 

In other provinces/jurisdictions without immediate vesting, if a pension plan member terminates employment before vesting, they typically receive a refund of their contributions to the pension plan (as opposed to receiving a pension benefit).

If you die before you start your pension, your surviving Spouse may elect to receive the Commuted Value of the pension you would have received had your employment ended immediately before your death. This Commuted Value could be payable as cash or as a direct transfer to your Spouse's personal RRSP.  Alternatively, your Spouse may elect to receive an immediate or a deferred survivor pension.  The survivor pension would be equivalent in value to the Commuted Value of your pension.

 

If you do not have a surviving Spouse, your designated beneficiary or estate will receive the Commuted Value of the pension you would have received had your employment ended immediately before your death.  This Commuted Value would be payable as cash less withholding tax.

 

If you die after your pension has started, the benefit payable will depend on the form of pension you chose at retirement. Any joint survivor pension will only be payable to the person who was your Spouse at the time of retirement.

The definition of Spouse in accordance with the Nova Scotia Pension Benefits Act means either of two persons who:

i.    are married to each other;
ii.   are married to each other by a marriage that is voidable and has not been annulled by a declaration of nullity;
iii   have gone through a form of marriage with each other, in good faith, that is void and are cohabiting or, where they have
      ceased to cohabit, have cohabited within the twelve-month period immediately preceding the date of entitlement;
iv   are domestic partners within the meaning of Section 52 of the Vital Statistics Act; or
v.   not being married to each other, cohabiting in a conjugal relationship with each other and have done so continuously for at least:

             a.   three years, if either of them is married, or
             b.   one year, if neither of them is married.

If you become disabled after April 1, 1998 and receive disability income from the Canada Pension Plan, Workers Compensation, or a long-term disability plan sponsored by your employer or a bargaining unit of your employer, and your net income as defined in the pension plan while disabled is less than your net income immediately prior to your disability, your pension benefits will continue to accumulate as long as you continue to be disabled and employed by your employer.  The benefit you earn during this period will be based on your rate of pay prior to your disability. You are not required to make contributions to the pension plan during this time; however, your employer must continue to make contributions on your behalf.

If your relationship ends, your former Spouse may be entitled to a share of up to 50% of the pension benefits you earned while you were together and a member of the pension plan. You and your Spouse must decide if the pension benefits will be split.  If you are planning on dividing your pension or require information for your lawyer regarding your pension benefit accrued during the period of marriage, please contact the HRM Pension Plan Office for an estimate.

 

In accordance with a court order, or separation agreement if the agreement was signed after June 4, 2001, benefits will be distributed by the plan administrator to your former Spouse upon the earlier of your termination of employment, retirement or death. If you have a court order or separation agreement which provides for a division of your pension benefits, please ensure that you send a copy of the order or agreement to the HRM Pension Plan office as soon as possible. The court order or separation agreement must:

 

  • provide for the division of the HRM Pension Plan in accordance with the Nova Scotia Pension Benefits Act;
  • specify the date of separation;
  • identify the date of marriage or start of the common law relationship; and
  • identify the percentage of the pension awarded to the spouse or common law partner which was accrued during the marriage or common law relationship.  The percentage may be at most fifty percent of the benefit earned during the period of marriage/relationship if the benefit is to be paid from the pension plan to the former spouse/common law partner.

 

In accordance with the Nova Scotia Pension Benefits Act, a fee of up to $650 will be payable to the HRM Pension Plan for processing a pension division.

You can commence receiving your pension at different ages, as follows:

 

Normal Retirement Date: The Normal Retirement Date under the plan is the first day of the calendar month coincident with or next following your 65th birthday (or 60th birthday for Public Safety Occupation members).

 

Optional Retirement Date: You may retire with an unreduced pension from the plan as early as age 60 or when your age and your years of continuous service add up to 80 (or 75 for most 'Public Safety Occupations'), whichever comes first. 

 

Early Retirement Date: You may retire as early as age 55 with a reduced pension (age 50 for Public Safety Occupation members). The reduction is equal to ½% for each month between your Early Retirement Date and your Optional Retirement Date as described above. For example, if you retire at age 56 and your Optional Retirement Date is age 58, then you will be retiring 24 months before you are eligible for an unreduced pension.  In this example, the pension will be reduced by 12% ( ½% x 24 months).  This reduction is permanent to compensate for the longer payment period.  Please note that if your Optional Retirement Date is before age 55 (age 50 for Public Safety Occupation members), there will be no reduction in your pension upon early retirement.

 

Postponed Retirement Date: If you choose to work beyond your Normal Retirement Date, your pension will commence the first day of the month following your last day of work, but not later than December 1 of the year in which you turn age 71, in accordance with plan provisions and the Income Tax Act.

The plan is designed to help you accumulate benefits for retirement. Your benefits are based on a pre-set formula regardless of investment performance or interest rates. Here’s the formula to calculate your annual pension payable upon your retirement:

 

2% multiplied by your Best Average Earnings multiplied by your years of Credited Service

 

Your Best Average Earnings is the average of your earnings over the three highest-paid, consecutive years, usually your last three years of work. It does not include overtime and other non-regular sources of income. For further details as to the earnings included for pension purposes, please contact your payroll support person.

 

Your years of Credited Service is the length of time you have been continuously employed while a member of the plan, and made contributions as required by the plan. For part-time members, service is pro-rated based on the number of hours worked during the plan year compared to the number of hours scheduled to be worked by full-time employees. Credited Service includes any service that you purchased through a “buyback” or transferred to the plan under a Reciprocal Transfer Agreement.

Subject to approval by the Pension Committee, pensions in pay may be adjusted for increases in the cost of living. The process of approval by the Committee will be guided by the Committee’s Funding Policy and subject to a maximum outlined in the Plan Text.  Increases are made on an ad-hoc basis and are not guaranteed.

If you have a Spouse at retirement, you will receive a pension for your lifetime and when you die, your surviving Spouse will receive a lifetime pension equal to 66 ⅔% of your pension.  If you both die before you and your Spouse have received the value of your contributions to the plan with interest to your retirement date, your designated beneficiary will receive a lump sum benefit equal to the remainder of this amount.

 

If you do not have a Spouse at retirement, you will receive a pension for your lifetime, with a minimum of 120 monthly payments guaranteed to be paid.  If you die before receiving 120 monthly payments, your designated beneficiary will receive the value of the remaining payments.  If the total of all payments made to you and your beneficiary are less than your contributions to the plan with interest to your retirement date, the beneficiary would receive the remaining balance of such contributions in a lump sum.

When you decide to retire, please advise your supervisor/department manager and send written notice of your intent to retire to the HRM Pension Office (ideally 3-6 months before effective date).  In your retirement notice, please include your full name, the first 5-digits of your Social Insurance Number, your date of birth, and your address.

 

You can expect to receive a retirement statement and forms approximately 45 days prior to your retirement date.  You will be required to complete and return the forms along with copies of your birth certificate and your Spouse’s birth certificate (if applicable) and a void cheque for direct deposit.

 

Northern Trust Canada Ltd. will commence pension on the first of the month following your date of retirement.  Please note that your pension will initially be paid based on estimated pensionable earnings and credited service.  After your retirement, your actual pensionable earnings and service will be reviewed and any necessary corrections will be made to your pension.

Yes.  Subject to certain limits under the Income Tax Act, you can purchase service and have it count as pensionable service.  Such periods of service include:

 

• approved leaves of absence with your employer during which you did not contribute to the plan;
• service with your employer prior to joining the plan;
• service with employers with whom the plan has a reciprocal transfer agreement;
• certain periods of employment with other employers; and
• prior periods of service under the HRM plan for which you have received a refund when your employment ended.

 

Presently, the HRM Pension Plan participates in four reciprocal transfer agreements which allow eligible members to transfer pensionable service between pension plans.  The agreements are between the HRM Pension Plan and:

  - the Federal Public Service Pension Plan

  - the Ontario Municipal Employees Retirement System (OMERS)

  - the Province of Newfoundland and Labrador Public Service Pension Plan

  - the following participating authorities in the Nova Scotia Multilateral Agreement:

Town of Amherst

Cape Breton Regional Municipality

Municipality of the County of Colchester

Council of Maritime Premiers

Municipality of the District of East Hants

Halifax Regional Water Commission

Region of Queens Municipality

Municipality of the District of Lunenburg

Town of New Glasgow

Nova Scotia Health Employees’ Pension Plan

Province of Nova Scotia (Public Service Pension Plan)

Municipality of the County of Richmond

Sherbrooke Restoration Commission

Town of Truro

Town of Yarmouth

 

There are deadlines under which you must initiate the process of transferring service under the reciprocal transfer agreements as follows:

 

From the Federal Public Service Pension Plan – within one year of joining the HRM Pension Plan;

 

From the Ontario Municipal Employees Retirement System (OMERS) – you have to commence employment with HRM or a Participating Employer of the plan within twelve months of leaving your employment with your OMERS employer, then you must become a member of the HRM Pension Plan within twelve months of employment with HRM or a Participating Employer, and finally, you must initiate the process within six months of joining the HRM Pension Plan;

 

From the Province of Newfoundland and Labrador Public Service Pension Plan– you have to commence employment with HRM or a Participating Employer of the plan within three years of leaving your employment with the Province of Newfoundland and Labrador, then you must initiate the process within six months of joining the HRM Pension Plan;

 

The participating authorities in the Province of Nova Scotia – within one year of employment with HRM or a Participating Employer of the plan.

 

Please note that administration fees are charged for transfers under a reciprocal transfer agreement and for the purchase of service with a previous employer. Please contact the HRM Pension Plan office for more information about eligibility and the cost related to service purchases and transfers, as well as any applicable administration fees.

Yes. Members of the HRM Pension Plan may elect annually to contribute 6.3% of their overtime and other non-regular taxable earnings to the plan. Non-regular earnings may include bonuses and lump-sum payouts of vacation or sick time.  Please check with your payroll department to confirm which earnings types are eligible for these additional contributions.  If you elect to contribute on your overtime and other non-regular earnings, the Municipality (or Participating Employer) will match your voluntary contributions dollar for dollar. Prior to the beginning of each year, you will receive an election form to stop or change your optional contributions. You cannot change your election at any other time while you remain employed.

 

Note: In addition, if you are a sworn police officer, you can make a separate election indicating you wish to contribute 12.6% of your police extra-duty earnings. Please note that your employer does not match your contributions on any police extra-duty earnings. 

 

All contributions in respect of overtime and other non-regular earnings will be deposited in an account in your name and invested by professional money managers along with the other assets of the plan. The interest rate in respect of these contributions is the net rate of return (after all expenses) on the pension fund as a whole. The expenses paid from the fund include investment management, administration and other third-party service provider fees. These funds are not able to be withdrawn from the plan until your death, termination or retirement. When you retire or terminate employment, you can use the value of the account to purchase an additional pension, or transfer it to your personal Locked-In Retirement Account. Should you die, these additional contributions will be included in any death benefit payable to your Spouse or beneficiary.

 

Please note that Canada Revenue Agency imposes limits on benefits earned under Registered Pension Plans.  Your additional contributions cannot cause your Pension Adjustment to exceed the “Money Purchase Limit” for the year in which the contributions were made.  The Money Purchase Limit for 2020 is $27,830.

You can name anyone you want as your beneficiary.  However, please keep in mind that the plan terms and the provincial pension legislation state that your Spouse at the date of your death will automatically receive the death benefits payable from the pension plan, regardless of any beneficiary you have named.  In the event you do not have a Spouse at your date of death, benefits would be paid to your beneficiary.

In order to change your beneficiary, you must complete the appropriate form below;

Beneficiary & Spouse Designation form (Non-HRCE Employees)

Beneficiary & Spouse Designation form (HRCE Employees)

You can write, send us an email, or you can call the HRM Pension Plan Office at 490-6213 (local calls) or toll free long distance 1-888-490-6213. In order to process a change of address, we need your full name, the first 5-digits of your Social Insurance Number, your date of birth, your present address, your new address, and the effective date of your new address.  Please make sure that you also update your employer with your new address.

Your RRSP contribution room each year is reduced by the value of the pension benefit you have earned for the year. This value is reported to you on your T4 slip as a Pension Adjustment. The Pension Adjustment is calculated using a formula prescribed by the Income Tax Act. The formula is as follows:

 

9 x the benefit you earned during the year - $600
+
employee and employer optional DC contributions
 

The $600 in the above formula is pro-rated based on credited service where your credited service is less than 1 in the year.

 

Pension Adjustments cannot exceed the limits set by Canada Revenue Agency.  The maximum defined benefit that can be earned in 2020 is $3,092.22 per year, which would create a Pension Adjustment of $27,230.  Pension Adjustments for members who contribute to a DC account (contributions on overtime and other non-regular earnings) cannot exceed the Money Purchase Limit for 2020 of $27,830.  For example, a member who is capped by the 2020 maximum pension (a member with pensionable earnings of $154,611) could not contribute more than $600 to the DC account in order to ensure that the total Pension Adjustment does not exceed $27,830 ($27,230 + $600).

If you terminate employment and are subsequently rehired within twelve months, you can return any monies (plus interest), which have been paid out of the Plan on your behalf, to the pension fund and receive continuous and credited service from your previous period of employment.  If this situation applies to you, please ensure that your Employer notifies the HRM Pension Plan Office.

Frequently Asked Questions for Pensioners

Subject to approval by the Pension Committee, pensions in pay may be adjusted for increases in the cost of living. The process of approval by the Committee will be guided by the Committee’s Funding Policy and subject to a maximum outlined in the Plan Text.  Increases are made on an ad-hoc basis and are not guaranteed.

The full amount of your pension is payable for your lifetime. It will not change at age 65, and will not be impacted by your decision to start collecting CPP or OAS benefits.

Any survivor benefits are payable to the spouse declared at the time of retirement.

If you are receiving a survivor benefit from the HRM Pension Plan, it is payable for your lifetime only, even if you remarry. Pension payments will cease upon your death.

You can write, email, or call the HRM Pension Plan Office. In order to process a change of address, we will need your full name, the first 5 digits of your Social Insurance Number, your date of birth, your current address, your new address, and the effective date of your new address.

To change your banking information we require a signed letter, mailed or faxed to the HRM Pension Plan Office. Your letter must include your full name, the first 5 digits of your Social Insurance Number, the effective date of the banking change, and your signature. In addition, please include a void cheque or a direct deposit form issued by your bank.

 

To ensure payments are deposited to your desired account, we recommend communicating any changes to your banking information at least 10 business days before the next payment date.

Law requires the HRM Pension Plan to deduct tax from your pension if it exceeds prescribed levels. If you would like more taxes withheld than would normally be deducted from your monthly pension (for example, if you have income from other sources), please send us a completed TD1 form. Alternatively, you may write to us specifying the exact dollar amount of additional taxes to deduct from your monthly pension.

If you appoint a power of attorney to tend to your financial affairs in the event you become incapacitated, please send a copy of your power of attorney documents to the HRM Pension Plan Office.  For pension-related purposes, your power of attorney is required to be categorized as a 'Continuing Power of Attorney for Property'.

 

Our office will deal with requests from your appointed power of attorney, provided we receive proof of their identity.  If you have specified that proof of your incapacity is needed first, we will also require this proof.

Northern Trust Canada Ltd. (the custodian for the Pension Fund) will prepare your annual T4A by February 28th of each year. If you have not received your T4A by early March, please contact the HRM Pension Plan Office. Remember to advise us of any address changes that occur during the year to avoid problems with receiving these forms.

 

Additionally, you can request a confirmation that you are receiving a pension from the HRM Pension Plan by contacting our office. In order to prepare a confirmation letter for you, we require your full name, the first 5 digits of your Social Insurance Number, your date of birth, and your current address.

 

If you would like a confirmation of income letter sent directly to a third party, we require a written and signed request containing the party’s name and full address.