How we calculate your pension
Disclaimer: We make every effort to ensure that all information on this website is accurate and complete. Should any discrepancy exist, the Plan Documents, statutes, or regulations shall apply.
There are various types of pension plans. The Combination Pension Plan is considered a “hybrid” plan because it contains elements of both a defined contribution plan and a defined benefit plan. It may be described as a defined contribution plan with a defined benefit minimum component:
1. The Defined Contribution component
Benefits are calculated based on total contributions (employee + employer), as well as net investment returns.
In essence, the defined contribution component can be compared to a Registered Retirement Savings Plan (RRSP) in that contributions and investment returns accumulate in an account that becomes available at retirement. Similarly, your pension benefit will be dependent on market returns and the amounts contributed during your career. An important difference, however, is that your pension funds are “locked-in”: they must be used for a lifetime retirement benefit.
2. The Defined Benefit component
In a defined benefit plan, the benefits are calculated using a benefit formula based on average salary and years of service. This plan offers an option that provides a defined benefit minimum to retiring members.
Your options at retirement
Your contributions, as well as the university's, accumulate in a Combined Contribution Account during your career. At retirement, you have three basic options for those funds:
1. The Variable Benefit
This is the defined contribution feature of this plan. The funds that accumulated in your Combined Contribution Account are converted into a "Variable Benefit Account". With this option, you retain ownership of the funds and each year, you set the monthly retirement benefit that you wish to receive (subject to statutory minima and maxima). Please refer to the Variable Benefit fact sheet for more information, or the Variable Benefit booklet for more details on this option.
2. The Internal Variable Annuity (with defined benefit minimum)
You can also purchase an internal variable annuity with the balance in your Combined Contribution Account. It is called internal because you need not transfer your funds to a third party and your pension continues to be administered by UVic Pension Services. It is called variable because it will be adjusted annually based on a number of factors explained further in the Internal Variable Annuity fact sheet.
With this option, you relinquish ownership of your funds, which are added to a pool of annuitants, and in exchange, receive a stream of monthly payments for your lifetime (the initial amount payable depends, among other factors, on your account balance, your age, the survivor benefit option selected).
This option includes a defined benefit minimum: it provides a "floor" for the value of the annuity, which is calculated based on a formula.
Please refer to the Internal Variable Annuity fact sheet for more information.
3. Transfer Out1
You can also opt to transfer your account balance to another registered pension plan, a Life Income Fund (LIF), Registered Retirement Income Fund (RRIF), or purchase an external annuity from an insurance company.
Please also see Options at a glance for more information.
1 Such transfers must be on a locked-in basis unless at least one of the following conditions apply:
- The funds were contributed prior to 1993
- The account qualifies as small benefit
- You have been determined by Canada Revenue Agency to be a non-resident for purposes of the Income Tax Act
Your additional voluntary contributions
During your career, you can also choose to make additional voluntary contributions1. At retirement, You may use these funds to enhance your retirement benefit with one or a combination of the following options (some restrictions apply):
• Transfer to another Registered Pension Plan or purchase an annuity from a life insurance company
• Subject to certain conditions, use to receive or enhance an existing Variable Benefit from the plan
• If non-locked-in: receive in cash (less withholding tax), or transfer to a Registered Retirement Savings Plan (RRSP) or a Registered Retirement Income Fund (RRIF)
• If locked-in: transfer to Locked‐In Retirement Account (LIRA) or a Life Income Fund (LIF) (age 50 or older)
1 Eligibility subject to Income Tax Act maximums. Other conditions also apply during leaves and other situations. Please contact us for more information.
Early and deferred retirement
In the Combination Plan, there is no minimum service requirement to qualify for your pension. However, there are age requirements.
Earliest Retirement Age
This is the date at which you can elect to take early retirement. In the Combination Plan, this occurs at age 55. Therefore, if you start receiving your pension between age 55 and 65, your case will be considered an early retirement.
Early retirement means that the Internal Variable Annuity’s defined benefit minimum is reduced to its actuarial equivalent. Please refer to the Internal Variable Annuity fact sheet for a full description of that option.
While early retirement reductions do not apply to the Variable Benefit option, minimum and maximum withdrawal rates vary by age.
Please also refer to the Leaving UVic section of this website for more information about leaving the employ of the University before age 55.
This is the date at which the Internal Variable Annuity’s defined benefit minimum is calculated without reduction. In the Combination Plan, this occurs at age 65.
You must start receiving a pension benefit no later than December 01 of the year in which you reach age 71, regardless of whether you decide to retire at that time. You can choose to defer your pension until that date, but if you do not select a benefit by October 31 of that year, a default option will be selected on your behalf.
Survivor benefits after retirement
Survivor benefits are paid to a spouse, beneficiary, or estate upon a member's death.
There are a number of options available for members to select at retirement, and those options affect the amount and type of benefits that will be paid during retirement. Please review the Survivor Benefits fact sheet for more information.