Mandatory Retirement Elimination Frequently Asked Questions for Faculty
1. When is mandatory retirement eliminated?
Ontario’s new Bill 211 which eliminates mandatory retirement comes into effect as of December 12, 2006. However, the University has agreed that faculty members who turn 65 on or after July 1, 2006 will not be mandated to retire. Thus faculty members are able to continue to work beyond age 65 as long as they are able to continue to perform their work responsibilities.
2. If I continue working beyond age 65, what happens to my pension?
Faculty who choose to continue their employment beyond age 65 must continue their contributions to the McMaster pension plan, and will continue to earn pensionable service. Contributions will continue until retirement, but no later than December 1st of the calendar year in which the faculty member attains age 69. At that point, the Income Tax Act requires the member to begin collecting his/her pension. [The Income Tax Act has changed this requirement from age 69 to age 71.]
3. The Income Tax Act requires that I collect a pension by December 1st of the end of the calendar year during which I attain age 69. Can I continue to work beyond age 69? [The Income Tax Act has changed this requirement from age 69 to age 71.]
Although you are required to begin to collect your pension on December 1st of the year you reach age 69, faculty members may continue active employment as long as they are able to continue to perform their work duties.
4. What happens to my pension and benefits if I retire and am subsequently rehired by the University?
The Pension Plan text permits a person to collect both a pension and a salary if the person is rehired by the University following retirement. This provision is intended for positions where a critical need exists (i.e., the knowledge and skills required to fill the position are not otherwise available). Re-hired faculty members, who have not yet attained age 69 and are collecting a monthly pension, may elect to stop receiving their pension benefit, and reinstate their pension contributions. [The Income Tax Act has changed this requirement from age 69 to age 71.] In this situation, faculty members would revert from the retiree benefit plans to the active employee benefit plans. If a faculty member elects to continue receiving their pension benefit, retiree benefits will apply.
5. Does mandatory retirement elimination impact my ability to retire early?
Eligibility to retire is not impacted by the elimination of mandatory retirement. Faculty members who are between 55 and 65 years of age, who have not yet reached Rule of 80/85 are eligible to retire and collect a reduced pension. Faculty members who have reached Rule of 80/85 may retire with an unreduced pension. (Click here for more information on Rule of 80/85.)
6. What options are there for pre-retirement reduced workload retirement?
The Faculty Pre-Retirement Reduced Workload policy (link to website) provides an opportunity for faculty members to reduce their workload by up to 50%, while continuing to earn pensionable service based on their normal workload.
7. How can I find out what my pension will be?
An online Salaried Pension Plan Estimator is available at: http://www.workingatmcmaster.ca/pensions/calculator.php. You will need your most recent Annual Pension Statement to input the necessary information.
8. What health benefits will I enjoy if I decide to continue working beyond age 65?
Benefits will continue for employees past age 65 with some modifications:
- Faculty members will continue to be provided coverage under the active faculty extended health and dental plans regardless of age.
- Long term disability coverage ends on the June 30th following the day you reach age 65.
- Life insurance coverage continues until the end of the calendar year in which you reach age 69. After which time it is converted to a $5000 lump sum policy.
- Out-of-province emergency medical coverage continues until December 1st of the calendar year in which you reach age 69. Effective December 1st of the calendar year in which you reach age 69, you will be eligible for the retiree out-of-province emergency travel benefit. This is a $10,000 lifetime benefit.
9. What are the eligibility requirements for Retiree Benefit Plans?
To be eligible for group benefits, you must have been enrolled in the group benefit plan immediately prior to your retirement. To be eligible for coverage under the Extended Health plan with Sun Life, you must be covered under your provincial health plan. Employees hired on or after July 1, 2006 must have a minimum of 10 years of employment service at retirement to be eligible for post-retirement benefits. Employees who at the time of retirement elect the Pension Plan’s Termination Option will continue to qualify for normal retirement benefits.
Require specific individual information? Faculty members are encouraged to contact:
- Active Benefits issues: Employee Work-Life Support Services (email@example.com or ext. 23743)
- Pension, Retirement and Retiree benefit issues: Retirement Support Services (firstname.lastname@example.org or ext. 24570)