You can retire as early as age 45 in some cases… or as late as the end of the year in which you turn 71. You decide. But bear in mind, your actual retirement age can have a significant impact on the MTS pension you receive.
The normal retirement age under the terms of the Plan is the first day of the month immediately following (or coinciding with) your 65th birthday. At this time, you will begin to receive a monthly retirement income from the Plan based on the pension formula.
You can retire as early as age 55, provided you have completed at least two years of Plan membership (this includes your membership in the CSSF).
Under a special provision, you may retire from the Plan 10 years before you qualify for an unreduced early retirement benefit – as early as age 45 in some cases. If you do retire under this special provision, however, you can expect fairly low pension payments.
Unreduced Early Retirement
You qualify for an unreduced early retirement benefit:
- At age 60, provided you have at least 10 years of Continuous Service.
- At age 55, provided your age plus Continuous Service totals 80 years.
- You could retire with an unreduced pension at age 58, for example, provided you had at least 22 years of Continuous Service at that time (58 years + 22 years = 80 years).
Continuous Service refers to how long you have worked with MTS or a Participating Employer on a continuous basis. This shouldn’t be confused with Credited Service which refers to the years and months you are a member of the Pension Plan making contributions.
Reduced Early Retirement
If you retire before you qualify for an unreduced benefit, your pension will be reduced to account for the longer anticipated payment period. The size of that reduction will depend on your age and Continuous Service as of your retirement date. Here’s how it works:
If you retire early with less than 10 years of Continuous Service, your pension will be reduced on an actuarial basis. Using a basic rule of thumb, the actuarial reduction will be about 6% for each year you retire prior to age 65. However, the actual number will vary depending on the form of pension you select, interest assumptions and other factors.
If you retire early with 10 or more years of Continuous Service, MTS will subsidize the benefit you receive. Instead of the actuarial reduction outlined above, your pension will be reduced by 0.0625% for each full month between your actual retirement date and the date you would have first qualified for an unreduced early retirement benefit based on your years of Continuous Service at your actual retirement date. Because of tax rules, this is a complicated calculation that will be explained to you fully when you retire.
You may postpone your retirement up until the first day of December in the calendar year in which your turn 71. You will continue to earn Credited Service during your postponed retirement period.