NSAHO Pension Plan

Glossary

Many of the terms used in this website have precise meanings. Although we have summarized the important points below for the convenience of the reader, note that the official Plan Text takes precedence over these descriptions.

Jump to a section in the glossary by selecting the appropriate letter below.

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

Actuarial Adjustment

This is an upward or downward change to your pension to take into account your personal selections at termination or retirement. Any necessary changes are calculated by the Plan based on the advice of the Plan’s actuaries, accepted actuarial principles, and applicable legislation.

The amount of your pension could be reduced for a number of reasons. The two most common reasons are:

selecting an earlier pension (i.e., starting your pension at an earlier date than your earliest unreduced retirement date).
selecting a survivor benefit that is higher than the amount of survivor benefit normally provided by the Plan

Actuary

A person trained in the technical and mathematical aspects of pension plans so they may estimate how much money must be contributed to a pension plan to ensure that the plan’s future obligations are met.

Annualized Pensionable Earnings

See also “Pensionable Earnings”
If you work fewer than the full-time equivalent hours for your position, the Plan must “annualize” your actual pensionable earnings reported by your employer before any pension calculations are done. The result is an expression of your pensionable earnings as if you had worked all of the full-time equivalent hours for your position.

Example:

Employer reports that a member earns $15,000 in a year.
Employer reports that the member worked 1,248 of the full-time equivalent hours for her position (for this example, full-time equivalent equals 2,080 hours)
Therefore, the member’s annualized pensionable earnings are:
$15,000 x 2,080 hours = $25,000
1,248 hours
In other words, if she had worked all of the 2,080 full-time equivalent hours for her position, she would have earned $25,000.

Applicable Benefit Percentage (%)

This is one of the three parts of the benefit formula that calculates your pension benefits. It is applied to your annualized pensionable earnings. The benefit percentage used to calculate your lifetime pension benefit and your bridging benefit are as follows:

Lifetime pension:

1.4% on annualized pensionable earnings up to the YMPE
plus
2.0% on annualized pensionable earnings above the YMPE.

Bridging benefit:

0.6% on annualized pensionable earnings up to the YMPE.

Base Year

When calculating your pension benefits, the Plan uses a “Base Year” to determine your annualized pensionable earnings for the earlier years of your plan membership. Your annualized pensionable earnings for years of Plan membership before the Base Year will be the same as your annualized pensionable earnings in the current Base Year.

Using the current Base Year instead of your actual annualized pensionable earnings for your earlier years of Plan membership increases the amount of your pension. This happens because your annualized pensionable earnings in the current Base Year are usually higher than the annualized pensionable earnings you actually received during those years before the current Base Year.

(Note: the current Base Year is used unless an earlier Base Year produces a higher pension benefit for you.)

Effective January 1, 2008, the Base Year was upgraded from 2005 to 2006. Future upgrades to the Base Year will be considered by the Board of Trustees.

Best 36-Month Average Earnings

This is 1/3 of your total annualized pensionable earnings for your highest 36 consecutive months of earnings while a contributing member of the NSAHO Pension Plan.

Bridging Benefit

A temporary early retirement benefit that is designed to supplement – or "bridge" your retirement income – until age 65, when unreduced CPP benefits are normally payable. If you die before age 65, the bridging benefit stops.

Common-law Partner

This is the person (other than a spouse) with whom you have cohabited in a conjugal relationship for at least two years. For the purposes of the Plan, you can have only one common-law partner (or spouse) at a time.

Commuted Value

This is the lump-sum present value of your future pension benefits. Or to put it simply, it is the amount of money that would need to be invested today to pay – at the time of your retirement – the pension you have earned to date.

The amount of your commuted value is calculated by the Plan based on the advice of the Plan actuary.

Continuous Service

This is your most recent period of continuous employment that has not been broken by a period of terminated employment. It is used to establish when you are eligible to start receiving a pension.

Credited Service

This is the period of service that is used in the benefit formula to calculate how much your pension will be. It includes:

periods of Plan membership during which you made required contributions;
periods of disability when you received benefits from an employer-sponsored Long Term Disability plan;
periods of disability when you received Workers’ Compensation benefits, provided that the contributions required during such a period for both you and your employer are made to the Plan;
periods of employer-approved pregnancy or parental leave, provided that during that period you and your employer continued regular contributions to the Plan;
periods of any other employer-approved leave of absence, provided that during that period you continued making those contributions to the Plan that were required for both you and your employer;
periods of service from another pension plan that stem from a transfer of funds (i.e., reciprocal transfer or portability arrangement); and,
periods of service purchased through the Past Service Purchase Program.

For years of regular full-time employment where you worked and contributed on all of the full-time equivalent hours for your position, you will receive one year of credited service.

For years of reduced service where you worked and contributed on less than the full-time equivalent hours for your position, you will receive a partial year of credited service. Service will be prorated based on the ratio of actual (or deemed) hours worked to the full-time equivalent hours for your position.

Deferred Pension

A deferred pension is one that will start at a future date rather than immediately after you leave work.

Defined Benefit Pension Plan

A pension plan that provides a benefit based on a pre-set (i.e., defined) formula. The formula takes into account a member’s earnings history and years of participation in the Plan.

Dependent Child

A dependent child is a natural or adopted child who at the time of your death depends on you and who is:

under age 18; or
over age 18, but under age 23 and a full-time student at a recognized educational institution.

Pension payments made to a dependent child continue until the earlier of:

the end of the month in which the child no longer meets the above definition of dependent child; or
the end of the month in which the dependent child dies.

Early Retirement Date

This is the earliest date you may retire before your optional retirement date, with a reduced pension. You can retire with a reduced pension as early as:

age 55; or
age 50, if you have 10 or more years of continuous service; or
the date when your age plus your years of continuous service equals 80 points or more.

Please note: When calculating the amount of the reduction that applies to your pension amount at your Early Retirement Date, the Plan must take into account your age, and the years of continuous service you have actually accumulated, as at the date you left the Plan.

Excess Contributions

If your accumulated contributions, with interest, exceed 50% of the commuted value of your accumulated pension at retirement, termination of employment, or death prior to retirement - whichever comes first - then those excess contributions (if any) will be refunded to you.

Full-time Employee

For Plan purposes, this is an employee who is employed by one or more than one participating employer and who, in total, is regularly scheduled to work 50% or more of the full time equivalent hours for that employee’s position. Such an employee may join the plan immediately, but must join the plan within three months.

Full-time Equivalent Hours

This is the number of hours specified by your employer as the full-time hours for your position.

Funded Ratio

This is an indicator of the financial health of the Plan that compares assets to liabilities.

It compares – at a specific date – the present value of the assets of the Pension Fund (at current market values) to the present value of the Plan’s liabilities (for benefits promised by the Plan to Members for their service up to that date.) If the total asset value exceeds the total liability value (i.e., the funded ratio is greater than 1.0) the Plan is in a surplus position. If the funded ratio is less than 1.0, the Plan is under-funded.

Locked In Retirement Account (LIRA)

This is a registered retirement savings plan (RRSP), or other investment vehicle prescribed by Nova Scotia pension law, to which you can transfer (if eligible) the commuted value of your pension when you leave the Plan.

Money transferred to a LIRA is locked-in. This means it cannot be withdrawn until the earliest date that a pension could have commenced in the pension plan from which the money came. Once you are eligible to receive funds from the LIRA, payments must be taken as pension income, in the form permitted by the Nova Scotia Pension Benefits Act.

Marital Status

Your formal declaration as to whether you are single, or have a spouse or a common-law partner as of a specific date (e.g., your pension start date).

Under Nova Scotia pension law, your marital status determines how death benefits from the Plan will be paid, based on:

in the case of death before retirement, your marital status as of the date of your death
in the case of death after your pension starts, your marital status as of the day you start your pension.

Named Beneficiary

This is the person you have named to receive any benefits payable after your death, assuming you do not have an eligible spouse or common-law partner (as applicable). You can appoint one or more beneficiary(ies). You can also change your beneficiary at any time.

Optional Retirement Date

This is the earliest date before age 65 that you may retire with an unreduced pension. You may retire with an unreduced pension as early as:

from age 55 through 59, if your age plus years of continuous service equals 85 or more points; or
at age 60 or over, if you have 10 or more years of continuous service;

Please note: Your Optional Retirement Date shown in your Annual Pension Plan Statement is only a projection. This projection assumes that you will continue to work and be a Member of the Plan until that projected date. Your actual Optional Retirement Date will be determined as at your date of leaving the Plan based on your age, and the amount of continuous service you accumulated before you left the Plan.

Part-time Employee

For Plan purposes, a part-time employee is an employee who does not meet the Plan’s definition of a full-time employee. If this applies to you, then you have the option of joining the Plan at any time once you have:

completed 24 months of continuous employment, and
either worked 700 hours or earned at least 35% of the Year’s Maximum Pensionable Earnings (YMPE) in each of the two calendar years prior to enrolling.

Pension Adjustment

A PA represents the deemed value of the pension benefit you earned during the calendar year. A PA will be calculated for you each year that you belong to the Plan and will be reported on your annual T4 tax slip. Your RRSP contribution room in a given year is reduced by the amount of your PA for the previous year.

Pensionable Earnings (See also annualized pensionable earnings)

This refers to your wages or salary, including:

sick pay, vacation pay (when the pay is for vacation actually taken), acting pay, and temporary assignment pay; and
one-time lump-sum cash bonuses resulting from a collective bargaining agreement, settlement or negotiation (or modification of any other employment contract with a group of members, provided all members in that group are eligible to earn a bonus).

Pensionable earnings exclude certain types of pay, such as stand-by pay, call-back pay, premium pay for holidays and shifts, overtime pay, lump-sum payments in lieu of vacation, retirement allowances, and any individual bonuses (bonuses not paid to all members of a group) that you receive from your employer.

Spouse

Either of a man and woman who:

are married to each other; or
are in a voidable marriage that has not been annulled by a declaration of nullity; or
have gone through a form of marriage, in good faith, that is now void, but with whom you are still cohabiting (or with whom you cohabited during the 12 months immediately prior to the date of entitlement).

Where applicable, spouse shall also include a “registered domestic partner” within the meaning of the Vital Statistics Act.

Notwithstanding this definition, the definition of spouse as specified in the Income Tax Act will apply in all applications related to that Act.

Any right, benefit or privilege available to a spouse under or incidental to this Plan is subject to the limits of applicable legislation in force at the relevant time.

Note: This glossary also includes a definition of common-law partner. See also, the section “Declaring a Spouse or a Common-Law Partner” in the member information booklet.

Vested

By participating in the Plan for 2 or more years, you become entitled to a pension benefit upon termination of employment instead of a refund of your contributions.

YMPE

The Year's Maximum Pensionable Earnings (YMPE) is established by the Canada Pension Plan (CPP). It is the maximum salary level used to determine employer and employee contributions to the CPP. The federal government revises this amount every year, based on increases in the Average Industrial Wage.

Because the Plan is integrated with the CPP, the YMPE is used by the Plan for two main purposes:

To establish the amount of contributions that will be deducted from your pay.
Your contributions are calculated in two steps – there is one rate for your pensionable earnings up to the YMPE and a second, higher rate for any pensionable earnings above the YMPE.
To calculate the amount of your pension benefit.
Your pension benefit is also calculated in two steps – it is based on one applicable benefit % for your annualized pensionable earnings up to the YMPE and a second, higher applicable benefit % for annualized pensionable earnings above the YMPE, if any.

The following is the recent history of the YMPE, effective on January 1 of each year:

	2008	$44,900
	2007	$43,700
	2006	$42,100
	2005	$41,100
	2004	$40,500

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