Change of Employment


What happens to my pension if my employment circumstances change?

If your employment circumstance changes or terminates, the impact on your pension and the options available to you will depend on the type of circumstance (i.e. reduced hours, layoff, termination or retirement) and the benefit you are eligible for on that date. Refer to the Change of Employment Information Sheet.

Keep in mind, termination and retirement benefits are only applicable if you stop working for all of your SHEPP employers. As long as you continue to be employed by at least one SHEPP employer, your membership in the Plan continues, even if your hours are reduced or you are laid off.

Reduced Hours

As long as you continue to earn credited service each month (i.e. make contributions to SHEPP and have at least three hours of paid employment), and the period of reduced hours occurs for a short period of time in a year other than one of your four highest earning years, it will have very little impact on your pension.

The Rule of 80 date projected on your Annual Pension Statement assumes you will continue to earn credited service every month until that date. If you do not earn credited service every month (e.g. you do not have any paid employment in one or multiple calendar months) your Rule of 80 date will be pushed into the future.

At any time prior to retirement, while you are still an active member of SHEPP, you may choose to purchase uncredited months on a prior service basis. This would effectively restore your Rule of 80 date to what it was prior to the reduction in hours which resulted in months of service not credited. Refer to the Prior Service Purchase Information Sheet.

If you expect to be working reduced hours for a prolonged period of time it could have an impact on your pension amount. Please contact SHEPP to discuss the potential impact.

Layoff

During a layoff you will not earn credited service as neither member nor employer contributions are remitted during a layoff period. Your early retirement eligibility and pension amount are determined by your years of credited service, so a layoff period can affect when you are eligible to retire (specifically your Rule of 80 date) and how much your pension will be.

Unlike an approved unpaid leave of absence, layoff periods are not available for current service purchase. In other words, you cannot choose to voluntarily make yours and your employer?s contributions during a layoff period in order to continue earning credited service. You may however choose to purchase the layoff period on a prior service basis upon your return to work.

The Rule of 80 date projected on your Annual Pension Statement assumes you will continue to earn credited service every month until that date. If you do not earn credited service every month (e.g. you've been laid off for a period greater than one month) your Rule of 80 date will be pushed into the future.

Choosing to purchase that period of layoff on a prior service basis when you return to work can effectively restore your Rule of 80 date to what it was prior to when you were laid off. Refer to the Prior Service Purchase Information Sheet.

Termination or Resignation (not yet eligible for an unreduced pension)

If your employment and Plan membership are terminated before you are eligible to retire, your termination benefit and your options will depend on your years of service. For more information, visit the Termination page or refer to the Termination Information Sheet.

Termination or Resignation/Retirement (already eligible for an unreduced pension)

If you are eligible for an unreduced pension from SHEPP when your employment and Plan membership are terminated, you are entitled to a monthly pension benefit commencing on the first of the month following your termination date. Refer to the Retirement Guide to learn how to apply for your pension or view the Retirement Information Sheet.

Termination with Severance

If you receive a lump-sum severance upon termination of employment, that lump-sum payment is not pensionable which means you will not make any contributions to the Plan for those earnings and they will not be included in the eligible earnings used to calculate your pension benefit.