Homepage
 > Pension Plan

Pension Plan

Learn about the benefits, accountability, and initiatives of the United Church pension plan.
Please read the Pension Plan Summary for an introduction to the plan. To learn more, view the Pension playlist on The United Church of Canada’s YouTube channel.

If you are an eligible employee working for a participating employer and you work an average of 14 or more hours per week, you must join the plan. There is no waiting period for ministry personnel. Lay employees are enrolled after completing three months of employment.

Once you join the plan, you will remain a contributing member even if you work fewer than 14 hours per week.

The plan is a career-average defined benefit pension plan. As a member, you earn a valuable lifetime pension while you work. Once you retire, you will receive pension payments every month for the rest of your life.

With a defined benefit pension, you receive a specified, guaranteed amount for life when you retire. You avoid the burden and risk of investing your retirement savings, both before and after retirement. You don’t have to worry about investment decisions or fees or base your retirement plan around market performance.

You make contributions on every pay, based on 6% of your pensionable earnings, and your employer contributes 9% of your pensionable earnings. When you retire, you’ll collect pension payments every month for the rest of your life.

Pensionable earnings are used to calculate pension benefits and contributions.

  • For ministry personnel who live in a manse, pensionable earnings are equal to 140% of salary.
  • For all other members, pensionable earnings are equal to 100% of salary.

Salary excludes any non-pensionable allowance.

The benefit, or “pension credit,” you earn is based on your pensionable earnings during each year that you contribute to the plan and are either

  • employed by a participating employer; OR
  • in search of a call

The rate at which you earn pension credits has changed over the years.

  • Before January 1, 2020, the rate was 1.4% of pensionable earnings.
  • For 2020, the rate increased to 1.85% for one year only.
  • For 2021, the rate is 1.625%.
  • For 2022, the rate is expected to go back to 1.4%.

Each year’s pension credit is added to what you have already earned, forming the total amount of annual pension at termination or retirement.

Example: Meet Reverend Jay

Jay joined the pension plan in 2019. Jay’s pensionable earnings are $60,000 per year. Jay retires after 10 years.

For easy figuring, let’s assume Jay’s salary remains constant

For 2020, Jay earned 1.85% of $60,000 = $1,110
In 2021, Jay earns 1.625% of $60,000 = $975
In 2022 and in future years, Jay earns 1.4% of $60,000 = $840

Jay earns:

2019:          $   840
2020:              1,110
2021:                975
2022:               840
2023:               840
2024:               840
2025:               840
2026:               840
2027:               840
2028:               840
Total:          $8,805

After working for 10 years, Jay has earned an annual pension of $8,805, payable at age 65. This pension will be paid every year for the rest of Jay’s life.

If Jay decides to take early retirement and receives the pension before age 65, the amount of pension will be reduced to reflect the longer period of time Jay will receive payments. 

If Jay decides to postpone retirement and continues working past age 65, in addition to earning additional pension credit, the amount of pension earned to age 65 will be increased to reflect the shorter period of time Jay will receive payments.

If you become disabled and qualify for long-term disability benefits from the group insurance plan, you will continue to earn pension credits for as long as your long-term disability benefits are approved.

Your pensionable earnings at your date of disability are used to calculate the pension credit you earn while disabled, and may be increased by up to 3% in subsequent years at the discretion of the Pension Board.

You will not be required to make member contributions while you are receiving long-term disability benefits under the group insurance plan.

Beginning to Receive Your Pension

For an interactive webinar offering more information on the Plan and the retirement process, sign up for our semi-annual Pension Information Seminar. 

Retirement can mean a new chapter of your life, but it is a big change that you will want to plan for. Prior to retirement, check out available resources from LifeWorks (formerly Morneau Shepell), LifeSpeak Wellness Platform and Canada Life.

As you plan for retirement, you may want to consult a financial planner who can help you estimate your expenses in retirement and your other sources of retirement income. You can request up to two quotes annually from the Benefits Centre to determine the amount of your pension at various dates.

When you are ready to begin receiving your pension, contact the Benefits Centre at 1-855-647-8222 or pension@united-church.ca, and they will send you the necessary paperwork. They will calculate your monthly pension under each available option and send you the forms to fill out.

Please contact the Benefits Centre three months before the date you want payments to start.

Your pension will be deposited directly into your Canadian bank account on the first day of each month. If you live outside Canada, cheques will be mailed to you.

As a retired member, you may be eligible to join the pensioner health and dental plans as long as you remain eligible for provincial health coverage. To be considered retired from the United Church, you must be receiving a monthly pension paid directly from the United Church’s pension fund.

If you are ministry personnel, you will need to complete the PR443: Application to Receive Pension Benefit Payments Form in the document library, which allows you to tell the Office of Vocation your status: whether you want to stop working, become a re-engaged pensioner, or you have reached age 71 and are commencing pension payments due to Income Tax Act requirements.

Your pension is calculated based on payments starting at age 65. Your annual pension statement shows your estimated pension at age 65. However, you can choose to begin receiving your pension earlier than age 65 if you have stopped working with a participating employer. If you continue working with a participating employer beyond age 65, you will begin receiving pension payments after you terminate employment.

  • Early retirement is any time after age 55 and before normal retirement or unreduced early retirement.
  • Your monthly pension amount will be reduced. One reason for this is to reflect the longer period of time you will receive pension payments.
  • Your pension is reduced by 4% per year for each year by which your early retirement date precedes your normal retirement date (or your unreduced early retirement date, if earlier). Partial years are reduced by 0.33% per month.

You can retire before age 65 with an unreduced pension

  • if you have reached age 60 when you terminate employment and have 35 years of credited service

OR

  • if you have reached age 55 when you terminate employment and have 35 years of credited service, and you wait until age 60 to begin receiving your pension

OR

  • if you joined the plan before 1988, you have reached age 55 when you terminate employment, and you have 40 years of credited service
  • If you continue working with a participating employer after age 65, your pension will begin after you terminate employment (but it must begin no later than December 1 of the year you turn age 71 even if you are still working).
  • Your monthly pension amount will be increased in two ways:
    • You earn additional pension credits.
    • For each month you postpone retirement beyond age 65, the pension earned to age 65 is increased to reflect the anticipated shorter payout period.

At retirement, plan members choose from four forms of pension. All options provide a monthly payment for life and come with a minimum guaranteed number of payments.

Minimum Guaranteed Number of Payments

You will receive your pension for the rest of your life. If you should die within a certain number of years after your pension starts, however, the value of the remaining guaranteed payments will be paid to your spouse or beneficiary in a lump sum. The minimum guarantee depends on the form of pension you choose.

If you have a Spouse at retirement, your pension must be paid in a form that provides a survivor pension to your Spouse if you predecease them (unless your Spouse signs a waiver in the legally specified form).

The plan generally defines a qualifying spouse as a legally married spouse or a common-law partner who has cohabited with the plan member in a conjugal relationship for a specified period of time. The exact definition of “spouse” varies from province to province and depends on your province of employment.

All of the forms of pension will be explained on the Option Election Form you will receive. If you have questions about the available options, Benefits Centre staff will be happy to answer them.

The value of your pension can be paid out in a single lump sum (subject to withholding tax) instead of in monthly installments if the amount of the pension or its lump sum value is less than an amount specified by legislation. This amount varies from province to province.

When You Leave Your Employer

Because the United Church pension plan is a multi-employer plan, moving between pastoral charges and other participating employers does not affect your plan membership.

You continue to contribute to and earn benefits in the same pension plan each year that you work for a participating employer.

If your employment ends and you do not intend to return to the United Church as an employee, you become eligible for termination options, described below.

The plan grants immediate vesting and locking in of benefits.

Vesting gives you the right to a pension.

Locking in prevents your pension from being “cashed out” so it will be available to you during retirement.

If your employment ends before age 55, you can choose one of the following:

  • Leave your earned pension in the plan and begin to receive it from age 65.
  • Leave your earned pension in the plan and begin to receive it at any time after age 55 (and before age 65) on a reduced basis.
  • Transfer the value of the pension to another employer’s pension plan (if that plan accepts transfers).
  • Transfer the value of the benefit to an approved retirement savings plan.

If you are 55 or older when your employment ends, you cannot transfer your earned pension out of the plan. Only your excess contributions, if any, will be available in cash (see Excess Contributions). You must choose one of the pension options below.

If you have less than 35 years of credited service, you can choose one of the following:

  • Begin your pension immediately (or any time before age 65) with an early retirement reduction.
  • Wait until you turn 65 and receive an unreduced pension.

If you have 35 or more years of credited service, you can choose one of the following:

  • Begin your unreduced early pension immediately if you are already 60.
  • Wait until you turn 60 to begin your unreduced early pension.
  • Begin your pension immediately with an early retirement reduction if you are under age 60.

If you joined the plan before 1988 and have 40 or more years of credited service, you can begin your unreduced early pension immediately.

If you continue working past age 65, your pension will begin once you terminate employment. However, your pension must begin no later than December 1 of the year you turn age 71, even if you are still working.

You will not have the option to transfer your earned pension out of the plan. Only your excess contributions, if any, will be available in cash (see Excess Contributions).

When your benefit becomes payable (because you terminate employment, retire, or die before retirement), a calculation is performed to see whether the sum of your contributions with interest is more than 50% of the value of your pension credit. If so, the amount above 50% is called “excess contributions.”

If you terminate employment before retirement, your excess contributions may be dealt with in one of these ways:

  • used to purchase a higher pension from the plan, if you are leaving your earned pension in the plan
  • transferred, along with the lump sum value of the pension, out of the plan to another retirement savings plan
  • refunded to you in cash, subject to withholding tax (where permitted under pension legislation)

If you die before retirement, your excess contributions will be paid to your beneficiary.

Example of Excess Contribution Calculation

Your contributions with interest:

$4,600

 

Value of pension at termination:

8,000

 

50% of pension value

 

$4,000

Your contributions with interest

4,600

 

Less: 50% of pension value

(4,000)

 

 

 

 

Your excess contributions

$ 600

 

Survivor Benefits: Death before Retirement

If you have a qualifying spouse and you die before starting your pension, your spouse will receive a death benefit equal to

  • the value of your earned pension on the date of your death
    plus
  • any excess contributions with interest on the date of your death

Your surviving spouse can elect to do one of the following:

  • Receive the benefit in monthly installments for life (see Exception for Small Pensions).
  • Take the benefit in a lump sum as taxable income where permitted under pension legislation.
  • Transfer the lump sum benefit, tax sheltered, into a retirement savings plan or their employer’s pension plan (if their employer’s plan accepts transfers).

If no pre-retirement death benefit is payable to a qualifying spouse, each dependent child will receive a monthly child’s pension until they cease to qualify as a dependent child.

A dependent child is a natural or adopted child who is under the age of 18, or age 18‒24 if still in school.

If no pre-retirement death benefit is payable to a qualifying spouse or dependent child, your designated beneficiary, or your estate in the absence of a beneficiary, will receive a taxable refund of the value of the pension.

Survivor Benefits: Death after Retirement

If you have a qualifying spouse and you die after your pension begins, your surviving spouse will receive the survivor benefit according to the form of pension you chose at retirement.

Each dependent child may be eligible to receive a monthly child’s pension until they cease to qualify as a dependent child. Whether any pension is payable depends on the amount of any survivor pension payable to a qualifying spouse.

A dependent child is a natural or adopted child who is under the age of 18, or age 18‒24 if still in school.

If you do not have a qualifying spouse, any remaining guaranteed payments will be paid to your designated beneficiary, or your estate in the absence of a beneficiary, as a lump sum.

Pension assets are family property and can be divided between spouses on marital breakdown, although this is not mandatory in most jurisdictions.

The value of the pension credit you accrue during the spousal relationship is generally included in your assets when calculating family property. In some jurisdictions, this value is calculated by the pension plan administrator when one of the spouses applies and pays a fee. In other jurisdictions, the spouses arrange their own calculations.

If a family property equalization payment is owing from the member spouse to the non-member spouse, the member is not required to split their pension to satisfy that payment if other assets are transferred to the non-member spouse. Similarly, spousal support/maintenance can but is not required to be satisfied through a pension split.

A court order or separation agreement must specifically require a split of the pension. The pension plan administrator will administer each split within the parameters of the order/agreement subject to the requirements of pension legislation.

Quick Links

View Pension Plan Summary →
The 2021 Pension Plan Summary (PDF)
View Pension Playlist →
Video resources for pension (YouTube)
United in Learning →
Overview of retirement planning, sign up for the Pension Information Seminar

Didn’t find what you were looking for? Here are some other Member resources.

Governance

Learn about the pension plan administrative structure and the key processes needed to ensure fiduciary and other responsibilities of the Plan Administrator are met.
Governance →

Group Benefits

Learn about health, dental, and life insurance benefits as well as various programs available to members.
Group Benefits →

Document Library

Get access to all Member forms and resources.
Document Library →

We’re here if you need us

Get answers to your pension or benefits questions and find out how to get in touch with us.

Learn More →
Copyright © 2021 - All Rights Reserved - The United Church of Canada
Privacy Policy
cross