Overview
If your employer participates in the Supplementary Employee Retirement Plan (SERP), you may be eligible to receive a SERP pension at retirement. The Income Tax Act (ITA) limits the amount of pension that can be paid from a registered defined benefit pension plan. At retirement, if the amount of your pension exceeds the ITA limit, the excess amount will be paid to you as a SERP pension.
Contributions
You pay contributions on your full salary, and these salaries are included in the calculation of your pension at retirement.
Eligible Service
Only service earned with a SERP-participating employer will be recognized when calculating the SERP pension. Service that will not be included in the calculation of a SERP pension includes:
- Service transferred from another pension plan under a reciprocal transfer agreement
- Purchased prior service with an employer that did not participate in the SERP
- Service earned with a SERP-participating employer where you received a refund of SERP contributions for that period of employment
Eligibility for a SERP Pension
Eligibility for a SERP pension requires that, upon leaving your employment, you are entitled to an immediate pension and choose to begin receiving it at that time.
Retirement Pension Benefits
If you retire and start your pension immediately, any portion of your pension benefit that exceeds the amount that can be paid by the PSSP will be paid as a SERP pension. The cost of the SERP pension is payable by your employer. For administrative convenience, your total pension (PSSP and SERP) will be combined into one monthly pension payment. In addition, Cost-of-Living Adjustments (COLA) on your SERP pension will be payable on the same basis as COLA on your pension payable from the PSSP.
Termination of Employment Benefits
If you terminate employment prior to being eligible to receive an immediate pension, you will not receive a SERP pension. Instead, you will receive a refund of contributions you have made on the portion of your salary that exceeds the limit on which the PSSP can pay a pension. This refund will be paid by your employer.
Re-employment
If you become re-employed by a SERP-participating employer within 30 days of terminating from your prior employment, you will not receive a refund as noted above but instead will continue to earn service towards a SERP pension.
If you become re-employed by a SERP-participating employer more than 30 days after terminating from your prior employment, and you have already received a refund of SERP contributions, the service earned in your prior employment will not count towards a SERP pension unless you repay that refund to your new employer.
If you become re-employed by an employer that does not participate in the SERP, you will not be eligible for a SERP pension and will receive a refund of your SERP contributions that you made while you were a member of the SERP-participating employer.
Survivor Benefits
Any survivor pension payable under the SERP will be payable on the same terms and conditions as the survivor pension payable from the PSSP.