If you are interested in seeing the formula and reading about about how all the parts of the formula work together, you can do so below. The salary we use in the formula is called your highest average salary , which uses the five years in a row where your average salary was the highest. Those are often, but not always, the last five years of a LAPP member's career. This is called the salary cap. The service we use in the formula is your pensionable service in LAPP, to a maximum of 35 years.
Your pension will be calculated differently depending on whether you work full-time or part-time. Salary up to the YMPE x 1. The key feature of pensions is that they pay a guaranteed monthly benefit for life. This provides retirees with unparalleled retirement security and keeps retired public employees out of poverty. People often wonder though, how are those monthly pension benefits calculated?
Most defined benefit pension plans use a formula that calculates three factors: the number of years of service of the employee; the final average salary of the employee; and a benefit multiplier.
The first of these is fairly straightforward: if you work for an employer for 30 years, then 30 is used as one of the factors in your benefit calculation. Final average salary varies a little bit more from pension system to pension system. In many places, it is the average salary of the final three years of service that is used. In some places it is four or five years; rarely is it longer than that. In other systems, instead of using the final three years of salary, they use the three years of highest average salary or four or five years.
The final factor used in pension benefits calculation is a benefit multiplier. My Retirement Plan My Retirement Plan offers active plan members secure access to their personalized pension information online. Contact Contactez-Nous Facebook Twitter. Search form. Toggle navigation MENU.
About Members Employers. How your pension is calculated. Your pension benefit calculation is a pre-determined formula that is based on: Your pensionable service: the number of years you have earned accrued. The maximum service credited for pension purposes is 35 years. Your 5-year highest average salary HAS. This is your average annual salary for the five years of your career during which your salary was at its highest.
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