Maximizing your Pension Benefit

What can I do to maximize my pension benefit?

Service that is credited to you under SHEPP is used for determining both your eligibility for, and the amount of, your SHEPP benefits. By increasing your credited service you can maximize your pension benefit. If eligible, you may want to consider the following ways to increase your credited service:

  • transfer service credits from a former employer's registered pension plan through a portability transfer; and/or
  • purchase service.

There are two reasons you may wish to consider a portability transfer or a service purchase:

  • to increase your pension; and/or
  • to be able to retire with an unreduced pension at an earlier date.

This is because credited service, either purchased or transferred into SHEPP, is added to your regular credited service for the purpose of calculating your pension and determining your eligibility for early retirement with an unreduced pension.

What is a portability transfer?

If you belonged to another registered pension plan with a former employer, you may be entitled to transfer your service credits from your former pension plan to SHEPP. If eligible, a portability transfer could increase your SHEPP pension and help you retire with an unreduced pension earlier.

For more information on purchasing service through a portability transfer, refer to the Portability Agreement Transfers and Procedure for a Portability Transfer Information Sheets or contact our office.

How do I purchase service?

Each month that you make required contributions to the Plan counts as one month of credited service. There are situations where Plan members may have service that is not credited. Such service can be purchased on either a prior service or current service basis.

Prior Service

Eligible prior service includes:

  • Non-pension plan service with a SHEPP employer: Service with a SHEPP employer during which you were not contributing to any pension plan, including SHEPP. This includes service with your employer:
  • before your employer joined SHEPP;
  • during which you weren't eligible to join SHEPP; or
  • during which you chose not to join SHEPP even though you were eligible.
  • Pension service with a former SHEPP employer: Service with a former SHEPP employer (before you started working for your current employer), during which you were contributing to SHEPP and for which you received refund of contributions or commuted value transfer when your employment ended.
  • Approved unpaid leave of absence: An approved unpaid leave of absence, including a maternity, parental, adoption or education leave, etc.

You can apply to purchase prior service at any time while you are an active SHEPP member. If you are thinking of purchasing prior service, you can estimate the cost by using the Prior Service Purchases Calculator on SHEPPWeb. For help using this calculator, view the Estimating the Cost to Purchase Prior Service video on the Video Tutorials page. You can also request a cost quote be mailed to you by contacting SHEPP.

The cost to purchase prior service is actuarially calculated based upon your age and earnings. For more information please refer to the Purchasing Prior Service Information Sheet.

Current Service

Active Plan members can purchase periods of leave of absence on a current service basis, meaning while you are on your approved leave. To purchase current service, you are required to remit both your share and your employer's share of required contributions through pre-authorized debit payments payable each month during your leave. To purchase a leave of absence on a current service basis you must submit the Leave of Absence Member Notification form provided to you by your employer, indicating your desire to have a cost quote prepared. SHEPP will prepare and mail you a cost quote and the relevant application forms to purchase your leave of absence. To be eligible, SHEPP must receive the completed and signed Pre-authorized Debit form and the Current Service Purchase Agreement within 60 days from the date your leave begins.

If you are thinking of purchasing current service while on an LOA, you can estimate the cost by using the Current Service Purchases Calculator on SHEPPWeb.

For more information please refer to the Current Service Purchase(LOA) Information Sheet.

Combining Active and Deferred Memberships

If you have an active and deferred membership with SHEPP, all of your sevice and earnings will be combined to determine your SHEPP benefit and your eligibility to receive that benefit.

For more information please refer to the Combining Membership Periods Information Sheet.

Can I increase my contributions to SHEPP and build a bigger pension?

No. Contribution rates are based on actuarial valuations which determine the current cost to fund future liabilities under the Plan. Adjustments may be made to contribution rates periodically to ensure there are sufficient funds to pay benefit entitlements. However, changes to contribution rates do not affect your pension benefit amount. Your SHEPP lifetime monthly pension is based on a formula which takes into account your highest average contributory earnings and your years of credited service. In order to increase your lifetime pension benefit you would need to increase your credited service and/or your annual contributory earnings.