Coordination

Coordination is an option that allows eligible MEPP members who retire before 65 to receive a temporary increase to their pension payments. Upon turning 65, when other kinds of retirement income often start to be paid, this temporary increase is removed and a permanent coordination reduction begins, resulting in permanently reduced pension payments.

Canada Pension Plan (CPP) and Old Age Security (OAS) are two examples of other retirement income. The permanent reduction to your MEPP pension payment will continue regardless of any changes to your federal benefit amounts or other retirement income sources.

If you select the coordination option, it is critical to ensure that your retirement income from all sources is enough to compensate for the permanent reduction to your MEPP pension payment, which will occur when you turn 65. You may wish to seek the advice of an independent financial professional to determine the best choice suited to your financial circumstances. Your choice cannot be changed after your first pension payment has been made.

Is Coordination the Right Choice for You?

Review the facts as they apply to you on your Retirement Benefit Statement. Think realistically about how much money you need now, and how much you will likely need after you turn 65. Consider all your retirement income sources (such as CPP/OAS, and other personal investments), both before and after the age of 65, as well as how your income taxes will be affected in both cases. You may wish to seek the advice of an independent financial professional to determine the best choice suited to your financial circumstances.

This is an important decision. If you choose the coordination option for your MEPP pension, you cannot change your mind once your pension payments start.

Coordination Eligibility

Coordination is only offered to eligible MEPP members who retire before 65 years of age. If you are eligible, your Retirement Benefit Statement will show your coordination options. Prior to deciding whether to coordinate your pension, you should carefully review the different pension options available to you and select the one that best suits your individual circumstances.

Coordination Amount

NOTE: The amount of coordination offered on your Retirement Benefit Statement is based on the maximum amount of CPP and OAS a Canadian can receive, and not based on how much CPP and OAS you will actually receive.

Use the Government of Canada's CPP/OAS calculators, or contact them at 1-800-277-9914 to get an estimate of how much CPP and OAS you will receive.

Passing Away with Pension Coordination

If your MEPP pension commenced after December 31, 2003, or if you selected Joint Lifetime with Reduced Survivor Benefit:

Coordination of your MEPP pension will continue as long as you live. If you have a coordinated pension and you pass away before the age of 65, the increase in the monthly payment will stop. Any benefits paid to your pension partner or beneficiary will revert to your original pension option amount without coordination. The pension will not be reduced on the date you would have turned 65.

If you pass away after 65 years of age, the reduction in the monthly payment will stop and your pension partner or beneficiary will receive the original monthly survivor pension.

If your pension commenced before January 1, 2004, the impact of coordination may differ. Please contact Member Services directly.

The following is an example of how coordination can impact a pension:

MEPP Pension Without Coordination

This graph shows a MEPP pension without coordination.

You will notice that the amount of this MEPP pension (in blue) remains the same from the time the member starts collecting it, before and after turning 65 -- for the rest of their life. In the second column, their total retirement income grows after age 65 because they decided to start collecting their CPP and OAS (in gold).

MEPP Pension With Coordination

This graph shows an example of a MEPP pension with the coordination option.

The first column shows the pension with a temporary coordination increase. The member will receive this increase until they turn 65.

The second column shows that, like in the first graph, the member turned 65 and began collecting their CPP and OAS (in gold). But it also shows how their MEPP pension payment was permanently reduced at that time (grey lines). You can see how this member’s overall retirement income will be essentially the same both before and after turning 65.

It's important to understand that, by choosing the coordination option, the MEPP pension payment will be reduced as of the member’s 65th birthday, and it will continue for the rest of their life, no matter how long they live.

With coordination, the total amount of retirement income paid over the member’s lifetime may not be the same as if they had taken their MEPP pension without coordination. This total amount is unique to the individual, and it is affected by how much coordination the member chose to take before reaching the age of 65, and for how long they live after 65.