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Early Retirement with a Reduced Pension

Employees who are not eligible for early retirement with an unreduced pension may be eligible for early retirement with a reduced pension. The reduction is applied on the pension from the General Account. The pension from the Complementary Account is always calculated based on the employee’s age and the value of the account at the time of application for retirement.

Starting at age 55 or 60 – early retirement with a reduced pension

Two situations are possible.

Situation 1
Employees age 55 or more, who are not eligible for early retirement with an unreduced pension because they do not satisfy the rule of 80 for the number of hours worked, or employees aged 60 years or more, who are not eligible for early retirement with an unreduced pension because they do not satisfy the rule of 70, are eligible for a reduced pension no matter how many hours worked are credited to their file.

The reduction takes into account the period between the first day of the month following the month in which the pension application was submitted and the date at which the employee would have been eligible for an unreduced pension. The longer the period, the greater the reduction. The reduction is approximately 7% for each year before the normal retirement date. It is calculated more precisely using an actuarial factor. This reduction is permanent: it applies as long as the pension is payable by the plan.

Example 1:
Employee age 55 with 30,800 hours worked and 25 years of membership in his retirement file
  • An unreduced pension would be payable at age 58 because (30,800 ÷ 1,400) + 58 = 80.
  • The pension would be permanently reduced by 21% (that is, 58 years – 55 years = 3 years and 3 years  x 7% = 21%).
Example 2:
Employee age 61 years with 11,200 hours worked in his retirement file
  • An unreduced pension would be payable at age 62 because (11,200 ÷ 1,400 = 70).
  • The pension would be permanently reduced by 7% (that is, 62 years - 61 years =
    1 year and 1 year x 7% = 7%).

Situation 2
Employees age 55 or more, who are not eligible for early retirement with an unreduced pension because they do not satisfy the rule of 80 for the number of years of participation, are eligible for early retirement with a reduced pension. In this situation, the reduction is by 3% for each year before the normal retirement date, calculated on the employee’s pension accumulated from January 1992. This reduction is permanent: it applies as long as the pension is payable by the plan.

Starting at age 50 – early retirement with a reduced pension 

Employees age 50 years or more are eligible for retirement with a reduced pension if:

  • Age + (hours worked divided by 1,400) = 60 or more (Rule of 60)

The following table illustrates this condition for different ages.
 

Employee age Minimum hours required Calculation
50 14,000 14,000 ÷ 1,400 = 10    10 + 50 = 60
51 12,600 12,600 ÷ 1,400 = 9    9 + 51 = 60
52 11,200 11,200 ÷ 1,400 = 8    8 + 52 = 60
53   9,800  9,800 ÷ 1,400 = 7    7 + 53 = 60
54   8,400  8,400 ÷ 1,400 = 6    6 + 54 = 60

The reduction is approximately by 7% for each year before the normal retirement date. It is calculated more precisely using an actuarial factor. This reduction is permanent: it applies as long as a pension is payable by the plan.

Employees who wish to apply for retirement must contact the CCQ’s Customer Services to obtain the Application for Pension Benefit form. The percentage and exact amount of any reduction are shown on the the form.