We often refer to the concept of a member’s “basic pension benefit” from the UBC Staff Pension Plan (SPP). But, what does that actually mean? When you join the SPP, you are immediately vested in the Plan, which means you are entitled to a pension benefit when you leave the Plan. The amount you will receive and the form in which you receive it, depends on several factors including your age, marital status, years of pensionable service, and when you started contributing to the SPP.
We calculate your basic pension benefit using the formula below:
Your SPP basic pension benefit =
1.8% x Your Best Average Earnings1
x
Your years of pensionable service2
If you have Pensionable Service prior to July 1, 2009
If you have pensionable service prior to July 1, 2009, you will have your basic pension benefit calculated using a combination of the current formula and then old formula (pre-July 1, 2009). For a full description of the two formulas, visit the The Pension Benefit section on the Overview page.
The following examples show how the basic pension benefit is calculated using the current formula:
Raine retired at age 65, with no spouse, on September 1, 2023. They joined the SPP on September 1, 2009. Their Best Average Earnings is $65,000 and their amount of pensionable service is 14 years.
1.8% x $65,000 x 14 years = $16,380 annual pension
($1,365 monthly pension at age 65)
Raine’s pension will be paid for their lifetime. They chose a guarantee period of 10 years – the guarantee period pertains to the payment of their pension benefit to a designated beneficiary in the event of their death. Upon Raine’s death, if there is time remaining on the guarantee period, the Plan will pay the remaining balance of the guarantee period to Raine’s designated beneficiary.
Erin retired at age 65 with a spouse three years younger than her. She has 12 years of pensionable service and her Best Average Earnings is $80,000. Since Erin has a spouse, there are two steps to calculating her pension amount:
Step 1 is to calculate the basic pension using the pension formula.
1.8% x $80,000 x 12 years = $17,280 annual pension
Step 2 is to adjust the pension to factor in that Erin’s spouse will continue to receive the pension upon Erin’s death.
Unless Erin’s spouse signs a waiver, she must select a form of pension that continues to her spouse upon her death. The pension is adjusted based on Erin’s age and the age difference between Erin and her spouse. Her annual pension will be $15,159, or $1,263 per month for her lifetime. Upon Erin’s death, the pension will then continue to her spouse for his lifetime.
Will my SPP basic pension benefit change?
When plan funding allows, cost-of-living adjustments (also known as inflation adjustments, or indexing) are provided to all pensioners to help your basic pension benefit keep pace with increases to costs of living. Although future cost-of-living adjustments are not guaranteed, every adjustment you receive becomes part of your basic pension benefit going forward. Therefore, your basic pension benefit will increase over time with future inflation adjustments.
Additional Resources
SPP Details: Retirement Ages & Early Retirement Considerations
SPP Details: Retirement Options
Pension Airwaves Podcast episode: Pension Benefit
Pension Airwaves Podcast episode: SPP Guarantee Period
