An example of how the pension will work

The following example is for illustration only. Actual amounts will depend on collective bargaining agreements.

Meet Alex, age 30, with a starting salary of $60,000. Alex earns more pension every year they work with a participating employer. 

  • The pension plan contribution rate for each employer is fixed in the collective bargaining agreement, just like they are with the Group RRSP
  • In this example, employer contributions are 8% of earnings, and Alex’s member contributions are 3%
  • Their salary will increase 1.5% per year
  • The pension earned each year is calculated as 12% of contributions made to the plan for the member

Year 1

In the first year:

  • The employer contributions are $4800
  • Alex contributes $1800
  • The total amount is then multiplied by 12% equaling $792, or $66 per month

Annual Pension Earned:
12% x ($4800 + $1800) = $792
Pension to Date:
$792 ($66 per month)

Year 15

After 15 years, Alex is making $75,000

  • The employer contribution is $6000
  • Alex’s contribution is $2,250
  • The pension accrued year is $990

Year 35

After 35 years, Alex has earned an annual pension of $36,109 or $3,009 per month for the rest of their life.

When they are ready to retire, Alex will receive a retirement package to elect how the pension will be paid based on their personal situation.

Teaser Videos

Find an error?

If you find an error, please send an email to communication@ceirp.ca.