Vested MEPP members are eligible to receive an unreduced pension on or after their 60th birthday. Retirement with a reduced or unreduced pension is possible as early as the age of 55, provided certain age and pensionable service requirements are met.
When Can Members Retire?
When Can Members Retire?
How Soon Can Members Retire?
A simple calculation determines a member’s earliest eligible retirement date:
Age at retirement + Years of pensionable service = 80
If the sum of these two parts is equal to (at least) 80, a member could be entitled to an unreduced MEPP pension as early as their 55th birthday. This is known as the 80 factor ("80 points").
The 80 factor takes into account any combined pensionable service (CPS).
Early Retirement Reduction
If a member retires early—before the age of 60 and before reaching their 80 factor—their monthly pension amount will be reduced.
The early retirement reduction amount is 3% per year multiplied by the lower number of:
- the number of years it would take the member to reach the age of 60; or
- the number of years until the member reaches 80 points.
Please note: A member’s pension is not reduced for early retirement on service accumulated prior to 1992.
Here is an example of how an early retirement reduction is calculated:
Step 1
Calculate the number of years it will take for the member to reach age 60 and the number of years until they reach 80 points.
Years From Turning 60
Years From Reaching 80 Points
Step 2
Use the lower number (4 years) to calculate the total pension reduction rate.
Pension Reduction
Step 3
Determine their monthly pension with the reduction applied.
In this example, if the member waited to start their pension until age 60 (the normal retirement age in the Plan), their unreduced pension would be $4,000 per month ($48,000 annually).
Based on the pension reduction calculated in STEP 2, their pension will be subject to an early retirement reduction of 12%, which results in their pension being $3,520 per month ($42,240 annually).
Reduction to Monthly Pension Payment
Please note: The maximum pension reduction is 30%. The reduction will be prorated for partial years. This reduction only applies to pension benefits for serviced earned after December 31, 1991.
When Must Members Start Their Pension?
Members must start their pension no later than December 31 of the year they turn 71 years of age. In this case, a member would not have to stop working for their MEPP employer in order to start their pension. There are many factors to consider when determining a retirement date. Members can use these tools to take the guesswork out of their benefit estimates and calculations.