Returning to work after retiring
How returning to work can impact your pension
If you’re retired, or collecting a pension without retiring from work, it’s important to understand how your re-employment earnings can impact your Public Service Pension Plan (PSPP) pension.
What you need to know
If you are in receipt of a pension, and you work for a PSPP employer and you don’t rejoin the Plan, there are limits on the amount you can be paid in any calendar quarter before your pension is affected. This is referred to as the “quarterly re-employment earnings limit”. This means that, if your gross paid earnings in any calendar quarter exceed your quarterly re-employment earnings limit, you’ll need to repay a portion, or all, of your pension for the period to Ontario Pension Board. We refer to the amount you must repay as a “pension overpayment.”
What’s your limit?
You can find your quarterly re-employment earnings limit on your Confirmation Statement, which is mailed to you when your pension commenced (if you’re nearing retirement, you may not have received this yet). If your pension commenced before you turned 65, you can also check the letter you received when you turned 65, or call us to confirm what your re-employment earnings limit is.
Here’s how we calculate your quarterly re-employment earnings maximum:
3 X (final month’s salary minus monthly pension)
Here’s an example:
| Calculation | Amount |
|---|---|
| Final month’s salary (based on your annual salary rate) |
$5,000 |
| Minus your monthly pension | $3,000 |
| Equals | $2,000 |
| Multiply that amount by 3 | × 3 |
| Equals your quarterly re-employment earnings limit | $6,000 |
If you retire early, you will be receiving the early retirement bridge benefit until age 65. Your quarterly re-employment earnings limit will be different while receiving the bridge benefit and after age 65 when the bridge benefit stops. If you retire before age 65 you will receive further communications from OPB before you reach age 65 about the change to your quarterly re-employment earnings limit at age 65.
We’re here to help
If you’re considering returning to work for a PSPP employer, we can help. We’re here to answer any questions you may have about how your pension could be affected. Please give us a call at 416-364-5035 or toll-free at 1-800-668-6203.
Suggested reading
For more information, read about “Returning to work”.