The following are frequently asked questions which have been answered as accurately as possible as of this date.
The answers provided may not be pertinent to individual circumstances and do not consider subsequent changes in agreements or legislation (we cannot accept legal responsibility for the accuracy of these statements).
A. When a retired teacher goes to a Nursing Home or Home for the Aged, how is his/her pension affected in regards to the spouse who has no pension income?
Strictly speaking, his/her pension will not be affected. However, everyone who applies to a nursing home or home for the aged must complete a financial assessment process. You will need to report your income and assets and the income and assets of your spouse. Generally speaking, the income (including your teacher’s pension) and *non-exempt assets belonging to you and your spouse will be evenly divided between the two, excepting any employment income earned by the spouse who has no pension income. Additionally, the province will exempt $25,000.00 of joint assets if the person applying for nursing home care has a spouse or legal dependent living at home.
* There are now 16 items currently exempt from the cost of nursing home care.
For more information contact Continuing Care at 1-800-225-7225 (toll free)
Website: HYPERLINK "http://www.gov.ns.ca/health" www.gov.ns.ca/health
B. Canada Pension at 60? or 65?
If one knew how long he/she was going to live, it might be easier to answer this question. Most financial advisors recommend that a person take early CPP. Your benefits will be less but you will be getting the benefits for a longer period of time. The best answer, perhaps, is to check with your financial advisor before you decide, since questions of “spousal benefits” may impact on your decision.
C. How is Canada Pension affected by early retirement?
Early retirement could have a slightly detrimental effect on your CPP Retirement Pension. Generally speaking, the more months you have been retired before your 65th birthday, the more there is a chance your CPP will not be maximized. For example, a teacher who took early retirement at age 52, and who remains “substantially retired”, will not receive the maximum CPP amount. For further information, contact your nearest Canada Pension Office.
D. At age 60, how does Pension (TPP) change with receipt of CPP?
There is no change in the TPP at age 60 with the receipt of CPP. The change will take place at age 65.
E. At age 65, how does integration of pension (TPP) take place?
When a service pensioner under TPP becomes entitled by age (i.e., age 65) to receive benefits under CPP, his/her previous pension under TPP is recalculated and adjusted. In some instances, total income from the two pensions will be greater than the original from TPP. However, if you opt for early CPP benefits, at age 65 the total of the TPP and the CPP may be less than the original TPP. Upon integration, the teacher receives two (2) payments; one from TPP and one from CPP.
* See examples of Integration of Pension Benefits (attached).
Reference: Nova Scotia Pension Agency
1-800-774-5070 (toll free), 1-902-424-5070 (local)
HYPERLINK "mailto:pensionsinfo@gov.ns.ca" pensionsinfo@gov.ns.ca (e-mail)
F. What happens to teacher’s pension when Old Age Security starts?
OAS starts at age 65. Coincidentally, this is the same age when integration of the teacher’s pension (TPP) and the Canada Pension (CPP) may take place. At this point, the TPP will be reduced in accordance with a formulae used for the integration of TPP and the CPP. At age 65, a teacher will receive three separate amounts – a reduced *Teacher’s Pension, a *Canada Pension and the *Old Age Security amount (annual indexing will affect all pensions).
* To receive these pensions, you must apply for them. They are not automatic.
Note: If your total income exceeds $66,335.00, a portion of the Old Age Security will be clawed back. Effective July 1, 1996, the Federal Government began holding back a portion of the OAS, at source, when income exceeded the above amount. As of January 1, 2009, OAS was set at $516.96 per month. OAS is adjusted quarterly to changes in the Consumer Price Index.
Approximate figures, as of 2002, for a teacher with average salary of $50,000.00
Examples:
1. Teacher retires after 30 years, age 60, but does not take early CPP.
30 years @ 2%/yr or 60% of $50,000 = $30,000 pension
2. Teacher retires, after 30 years, age 60, applies for CPP
30 years @ 2%/yr or 60% of $50,000 = $30,000 pension
Plus CPP age 60 to 65 (reduced) $ 6,625
Annual pension from age 60 to 65 (with early CPP) $36,625
3. Teacher retires, after 30 years, takes CPP at age 65 (with integration)
From TPP (with variable percentages) $22,420
From CPP $ 9,465
Annual pension after age 65 (no early CPP) $31,885
4. Teacher retires, after 30 years, has had CPP since age 60 and now turns 65 (with integration)
From TPP (with variable percentages) $22,420
From CPP (2002) $ 6,625
Annual Pension after age 65 (with early CPP) $29,045
Old Age Security may provide an additional $5500.00+ at age 65, depending on total pensionable income.
G. Is my teacher’s pension increased each year to assist in offsetting the increase in the cost of living?
Pensions are increased July 1 of each calendar year. The increase is based on changes in the average Consumer Price Index (CPI) for Canada.
H. Now that I’m on pension, can I teach?
If you are on disability pension, the answer is definitely NO! If you are on a service pension, the answer is YES!
I. Will teaching after retirement affect my pension?
A pensioner, on a service pension, can teach up to and including 69 ½ days per school year without affecting the pension received.
J. What happens if I teach more than 69 ½ days per school year?
Effective the 70th day of employment the pension will cease. The School Board must notify the NSPA. The pension will be reinstated when the pensioner ceases to be employed and the total period of re-employment is less than 1 school year.
If the pensioner accrues 1 or more years of pensionable service and subsequently ceases to be employed, the pensioner must make application for a new service pension.
This means that a new pension will be calculated based on all the members’ service and salary (old and new). Any indexing earned on the former pension will be deleted. Indexing will commence again the following July.
K. If I teach, must I pay pension contributions?
No. You should advise the employer’s payroll office that you are already in receipt of a teacher’s pension. You cannot contribute to the Teacher’s Plan if you are in receipt of a pension from the Province of Nova Scotia. Note: The same rule applies if you are in receipt of Canada Pension.
L. What happens to a retired teacher’s pension in the event of a divorce?
In all probability, a percentage of it will be awarded to your “ex”. Our pensions are part of the assets in a marriage that can, in the event of a divorce, be divided between the parties. The actual percentage awarded depends, to a great extent, on the number of years you were married and/or living in a common-law relationship together, while you were working and making contributions to the pension plan. Other factors are involved. If you should find yourself in the unfortunate position of going through a divorce, the best advice, perhaps, is to hire a reputable lawyer.
M. In the event of a death (spouse, relative for whom you are responsible, etc), whom should I contact?
Check for benefits with Nova Scotia Teachers Union – 1-800-565-6788.
N. In the event of my death, what percentage of my pension will my surviving spouse receive?
Effective April 1, 2003
Old Rules: No options. There is no minimum guarantee period for which your pension is paid. Your pension is paid to you for life; if you have a surviving spouse or dependant, he or she will get 60% of your pension, upon your death. Even though there are new rules, this old rule of 60% is still in effect and may be chosen.
New Rules: Instead of the old rules (which remain in effect) you may choose to accept a slightly reduced lifetime pension in return for a guarantee or enhanced survivor's pension. In order to do this you may choose one or both of the following:
A. survivor pension as a percentage of your pension: 80% or 100%; and/or
B. guarantee period for which your pension will be paid: 5 years, or 10 years, or 15 years.