Quote:
Originally Posted by DoubleF
Are some of you talking about the 85 point/factor retirement scale?
https://www.pspp.ca/page/when-can-i-retire
This is one of the more easily exploited retirement arrangements I've seen. It attracts older IDGAF type people into roles where they just sit around for a decade or so to max out their scale and this likely after a lucrative career in O&G. Younger people who work there have to toil for longer to reach the scale. It's an awful design.
People literally show up at age 55 and work till 65. Then they're walking away with 75 out of the 85 points. Someone at age 30 starting at the same place, 20 years later, they're only at 70 points (Age 50 + 20 years service). It's kinda unfair. |
The points only determine pension reduction, not the actual amount you're entitled to. If a person only contributes for 10 years, it doesn't matter how many points they have, they'll still only get a pension that's equivalent to ~20% of their salary (~2% for each year of pensionable service). Whereas someone who contributed for 35 years would get 70% of their salary.
The reason they have that points system which incentivizes later retirement (particularly for people with less service) is because someone retiring at 65 is going to collect their pension for 10 years less on average than someone retiring at 55. And because that 10 years represents about 30-35% of the remaining life expectancy of a 55 year old, they reduce the pension by about 30% if you retire at 55 instead of 65 (unless you have enough service to mitigate that).