A to Z index

Pensions are complicated. This A to Z index can help you understand the language.


Click on a letter below to get to the word you're looking for.

A

B

C

D

E

F

G

H

I

J

K

L

M

N

O

P

Q

R

S

T

U

V

W

X

Y

Z


A


  Active member A member who is currently making contributions to the pension plan, on a leave of absence or receiving benefits from an approved long-term disability plan.
 
  Actuary A financial professional who independently conducts a review of the plan’s funded position at least every three years.
 
  Actuarial valuation A review of the plan’s funded position, done at least every three years by the actuary.
The valuation determines the financial position of the plan and the future contribution rates needed to ensure its long-term funding. The actuary determines how much money the plan needs to pay pension benefits by making assumptions about future investment returns, future inflation rates, future increases in salaries, retirement ages, life expectancy and other factors.
 
  Arrears Arrears are a period of time when you and your employer should have contributed to the plan but did not.
 

B


  Beneficiary The person, trustee or organization that will receive your pension benefit after you die.
If you have a spouse, they automatically become your primary beneficiary (unless they waived their right).
 
  Benefit A monetary amount such as a pension or commuted value, payable under the plan to you or your beneficiary.
 
  Bridge benefit A temporary monthly amount paid in addition to the lifetime pension.
It is payable from your retirement date until you turn 65 or die, whichever comes first.
 

C


  Child-rearing The time you took off work to care full-time for a child under age seven. You can get credit for child-rearing time to increase your contributory service, which could help you quality for an unreduced pension before you reach age 60.
 
  Cost of Living Adjustment (COLA) COLA is a non-guaranteed cost-of-living adjustment to your monthly pension payment. COLA is based on the Canadian consumer price index and is applied to your pension in January each year if there are sufficient funds in the plan’s inflation adjustment account (IAA). COLA is granted at the discretion of the WorkSafeBC pension committee after considering all relevant factors.
 
  Commuted value A lump-sum value based on the amount of money the pension plan would need to put aside today, at current interest rates, to pay for your future pension at retirement.
 
  Compassionate care leave Time taken away from work to provide care and support to a family member who is gravely ill with a significant risk of death within 26 weeks.
You may be eligible to buy back this time.
 
  Consumer price index (CPI) The CPI is a measure of the rate of price changes for goods and services bought by Canadian consumers. 
It is one of the factors used to calculate annual cost-of-living (inflation) increases for pension benefits.
 
  Contributory service You get a month of contributory service for every month you make a contribution to the plan (or are deemed to have made a contribution). Contributory service comes into play when you are deciding when to retire because it’s used to figure out when you are eligible for your pension, and whether your pension will be reduced and by how much. It is one of the factors that can help you determine when you would like to retire.
 

D


  Deferred member A member who stopped working and contributing to the plan and did not take their pension benefit. They may apply to receive a pension benefit in the future.
 
  Deferred pension If you stop working and contributing to the plan and do not take your pension benefit, you may apply to receive a pension benefit in the future.
 
  Defined benefit plan A pension plan that provides you a lifetime pension based on a specific benefit formula.
Your entitlement to a lifetime benefit is independent of contributions and determined by a formula, such as using your highest average salary, amount of service and the plan rules.
 
  Dependent Your spouse or child (under 19 or a full-time student under 25).
 
  Disability pension A monthly pension payment payable to you if you are totally and permanently disabled before age 60 and not eligible for long-term disability benefits.
 

E


  Earliest retirement age The earliest age you can start receiving your pension.
 

H


  Highest average salary (HAS) The average monthly amount of your salary during each of the highest five years of annual salary. Each of the five years can be from any point in your career within the plan.
It is used to calculate a monthly pension benefit.
 

I


  Inactive member If you leave your job and keep your benefit in the pension plan but are not currently receiving a pension benefit from the plan.
 
  Inflation adjustment account (IAA) An account that holds a portion of member and employer contributions, earning investment income.
It funds cost-of-living adjustments (COLAs) that may be granted on top of retired members’ monthly pension income to help offset the effects of inflation.
 

J


  Joint life option A monthly pension guaranteed to be paid for your lifetime and your spouse’s lifetime.
Should you die before your spouse, your monthly pension will be payable to your surviving spouse for the remainder of their life.
 

L


  Latest retirement age (LRA) The end of the calendar year in which you reach age 71.
You must start receiving a pension from your registered pension plan (RPP) by December 1 of the calendar year you turn 71.
 
  Leave of absence An employer-approved absence from work, with or without pay.
You may be eligible to buy back time for the period of the leave to increase your pensionable time.
 
  Lifetime pension The portion of a pension benefit paid out over your lifetime. Depending on the option you select at retirement, payment may continue to your beneficiary(ies).
It does not include the bridge benefit or temporary annuity.
 
  Limited member Your spouse or ex-spouse who applied to the plan to become a “limited member” following your separation or divorce.
They are entitled to a portion of your pension benefits.
 
  Locked-in Pension plan funds that cannot be paid in cash. They must be used to provide a lifetime pension benefit.
 

M


  Marital breakdown Separation or divorce
 

N


  Non-contributory service A period when you worked for your employer but you did not contribute to the plan, because you weren’t eligible to contribute (e.g., probationary period or casual employment).
 

P


  Past service A period when you worked for your employer before your employer joined the plan. You may be eligible to buy back past service.
 
  Pension adjustment The value Canada Revenue Agency (CRA) assigns to your pension benefit that has accumulated in a registered pension plan during a calendar year.
Your pension adjustment is only used to adjust your RRSP room for the following calendar year.
 
  Pensionable salary Portion of your salary used to calculate pension contributions, benefits and purchase of service costs.
 
  Pensionable service The actual time you work while contributing to the plan.
This may include service you’ve purchased or transferred from another plan.
 
  Pre-retirement death benefit A benefit paid by the pension plan to your beneficiary(ies) if you die before retiring.
 
  Purchase of service Buying back eligible periods of pensionable and contributory service to increase your future benefit.
 

R


  Reduced pension If you apply for a pension on or after your earliest retirement age, but do not meet the age and contributory service requirements for an unreduced pension, your pension will be reduced.
 

S


  Shortened life expectancy If, before retirement, you have a terminal illness or disability likely to considerably shorten your life, you may choose to convert the pension, or part of it, to a payment or series of payments for a fixed term.
 
  Single life option A monthly pension guaranteed to be paid for only your lifetime.
When you retire you may also select a pension option guarantee of 5, 10 or 15 years for a beneficiary. This means if you pass away within the guarantee period, your pension is paid to your beneficiary as a pension or a lump sum based on the remainder of the guarantee period. 
 
  Spouse Your spouse is someone you are married to and have not been separated from for more than two years, or someone you have been living with in a marriage-like
relationship for at least two years.
 

T


  Temporary annuity An additional monthly payment you may purchase to increase your monthly pension payments until you turn 65 or die, whichever comes first.
The annuity cost lowers the amount of your lifetime pension.
 
  Termination of employment You no longer work for your employer.
It also means you end your plan membership.
 
  Transfer agreements or reciprocal transfer agreements An agreement between pension plans that allows you to transfer your eligible service from one pension plan to another.
 

U


  Unreduced pension A monthly pension benefit with no reductions included in the pension benefit formula.
 

V


  Vested Once you have made a contribution to the pension plan you are vested. This means you will be entitled to receive a pension benefit based on the defined benefit formula.
 

Y


  Year’s maximum pensionable earnings (YMPE) A salary limit set by the federal government each year for the purposes of determining the maximum annual contributions to the Canada Pension Plan.
It is used as part of the formula to calculate your contributions and pension benefits.