Hourly Pension Plan

1. About My Hourly Pension Plan
2. When I May Retire
3. Contributing to the Pension Plan
4. How is my Pension Calculated?
5. Future Pension Increases
6. What Happens to My Pension Benefit When I Die?
7. If I Leave the University Prior to Retirement

1. About My Hourly Pension Plan

Defined Benefit Plan

The McMaster Hourly Pension Plan is a defined benefit plan. When you retire, you will receive a pension based on your Regular Monthly Earnings and your years of Credited Service.

Immediate Vesting

When an employee joins the Pension Plan, the Member is immediately entitled to benefits under the Pension Plan.

2. When I May Retire

There are several types of retirement under the Hourly Pension Plan.

Normal Retirement Date

The automatic normal retirement date is the first day of the month following the Member's 65th birthday.

Early Retirement Date

A member may also retire early with a reduced pension at any time during the 10-year period preceding the normal retirement date.

Special Early Retirement Date

A member may retire on the first day of the month coincident with or next following the date the total of the Member's age and years of Continuous Service equals at least 80.

3. Contributing to the Pension Plan

Employee Contributions

You begin making monthly contributions by means of payroll deductions on the date you join the Pension Plan.

You contribute 3.5% of your Regular Monthly Earnings up to the Year's Maximum Pensionable Earnings (YMPE) and 5% of your Regular Monthly Earnings in excess of the YMPE.

University Contributions

The University shall pay into the Fund each year, the amount as based on the advice of the Actuary, to provide the normal cost of benefits currently accruing to Members in accordance with the provisions of the Plan. Effective January 1, 1986, the University contributions shall in no event be less than the contributions made by the Plan Members during any Plan Year.

4. How Is My Pension Calculated

Your retirement pension is calculated in two steps.

Your pension benefit to December 31, 1985 (based on the Plan provisions in effect on December 31, 1985) is calculated. This represents a benefit based on career average earnings in existence at the time, which was frozen with improvements from time to time

plus

Your pension benefit for years on or after January 1, 1986 according to the current Plan formula:

(a) 1.4% of Best Average Earnings up to the Average Yearly Maximum Pensionable Earnings (AYMPE) multiplied by years of Credited Service earned after December 31, 1985, plus

(b) 2.0% of Best Average Salary in excess of the AYMPE multiplied by years of Credited Service earned after December 31, 1985.

Bridging Benefit

For members who retire on or after July 1, 2001, and who have reached their Rule of 80 date, their bridge benefit is calculated as follows:

•  $12 per month for each year of Credited Service prior to July 1, 2001, payable from the later of the Member's pension commencement date and age 60 and ceasing with the payment immediately preceding or coincident with the earlier of the Member's Normal Retirement Date and the date of his death.

For members who retire on or after July 1, 2001, after age 55, and who have not reached their Rule of 80 date, their bridge benefit is calculated as above but reduced by 0.25% for each month by which the date of pension commencement precedes the Member's normal retirement date.

5. Future Pension Increases

Pension increases as determined by the Plan formula will occur on January 1st and will be prorated based on the number of months you were retired between January and December of the previous year.

6. What Happens to My Pension Benefit When I Die?

If Your Death Occurs Before Retirement

On the death of the member prior to his/her retirement, the death benefit amounts to:

(1) a refund of contributions made to December 31, 1986, plus Net Interest

(2) the Commuted Value of the pension benefits accrued on or after January 1, 1987

These benefits are payable to the Spouse, where no Spouse exists such amounts are paid to the named beneficiary or the estate.

If Your Death Occurs After Retirement

The benefit payable is dependent on the form of payment of pension you choose at retirement.

7. If I Leave the University Prior to Retirement

If you terminate employment prior to retirement, you may be eligible to choose one of the options described below. For Members terminating with service prior to January 1, 1987, please refer to the Plan language for further details.

(a) Where the Member has not participated in the Plan for at least two years, to receive a refund of required contributions made for service on or after January 1, 1987, accumulated with Net Interest on the Fund.

(b) To transfer an amount equal to the greater of the Commuted Value of the Member's pension and twice the Member's required contributions made for service on or after January 1 ,1987, to such other pension plan or locked in retirement arrangement as prescribed by the Income Tax Act and the Pension Benefits Act.

(c ) A deferred pension payable in the form permitted under the Plan and commencing at the normal retirement date. A former member may elect to receive a reduced pension commencing on or after the 1st of the month of attainment of age 55.

Disclaimer

The information provided on this website is intended to summarize in plain language, the McMaster University Contributory Pension Plans. For an exact and complete description of the Plan, consult the Plan Text. In cases where the information provided on this website differs from that contained in the Plan text, the Plan text will govern.