Infosheet No. 11
Planning to Retire
Introduction
This Infosheet is designed to offer a summary of considerations to be made as an NLTA member prepares for retirement, as well as some concise directions concerning procedures leading up to this event.
Eligibility
It is essential that a member makes certain that the necessary service and age requirements for pension have been met before tendering resignation from a school board or applying for a pension benefit. The best way to confirm eligibility for pension is to consult with a representative of the Teachers’ Pension Plan Corporation at the pre-retirement seminars. Otherwise, the Teachers’ Pension Plan Corporation can be contacted at: Teachers’ Pension Plan Corporation, 130 Kelsey Drive, Suite 101, St. John’s, NL A1B 0T2; Tel: 709-793-8772 or toll free: 1-833-345-8772; Fax: 709-793-4055; or Email: memberservices@tppcnl.ca. To access your retirement benefit options and pension information online go to the TPPC website www.tppcnl.ca and click myPENSION.
Application
All pension benefits must be applied for, whether the benefits be regular, disability or survivor. The appropriate form(s) can be obtained from the Teachers’ Pension Plan Corporation. Completed forms must be returned to the Teachers’ Pension Plan Corporation.
Resignation
Any member under contract who intends to retire is obligated by a collective agreement to serve the applicable notice to the employer. Three months’ notice in writing to the school board is required prior to superannuation, except that one month notice is required if the retirement is to occur prior to the Christmas recess.
In addition, members who are contemplating disability pension benefits should be aware of the collective agreement provision which states: “… in the event that a teacher makes application for disability pension, the teacher, upon such application, shall notify the School Board.” Members applying for a disability pension should not resign until the application for the disability pension is approved, in writing, by the Teachers’ Pension Plan Corporation.
Severance Pay
The collective agreement contains articles which govern the awarding of severance pay, and the applicable criteria for the receipt of such monies are outlined in those articles. Severance monies can be received as a direct payout from Teachers’ Payroll, which makes it taxable income; otherwise, severance pay may be sheltered from tax by “rolling” directly into an RRSP, in accordance with Income Tax regulations. Severance pay estimates, for those members who have deferred taking their eligible severance, are provided by Teachers’ Payroll at the NLTA pre-retirement seminars. An application for severance pay is necessary, and a “Notice of Assessment” from the latest Income Tax claim must accompany the severance application if any of the monies are going into an RRSP. Application forms can be obtained from either the NLTA or the Teachers’ Payroll Division at payroll@gov.nl.ca. Please note that for those who received an early severance payout (i.e. not at time of retirement), this does not apply.
Employment Insurance
Retiring members may apply for EI benefits, but should be aware of the following conditions:
- Regular pension income must be declared as earned income for EI purposes and would, in practically all cases, disqualify a person as a bonafide claimant.
- Disability pension income is not counted as earned income for EI purposes and, therefore, would not militate against a teacher receiving EI benefits.
- Severance pay must be declared and a waiting period, based on a pro-rated calculation of gross monies received as weeks of average earnings may be applied to you.
- Voluntary retirement (resignation) – other than disability – is usually regarded by EI regulations as grounds for automatic disqualification from benefits.
Retired members who re-enter the workforce (including substitute teaching) can qualify for EI benefits if they get the required qualifying hours of employment. The number of required hours will vary depending on the geographic location and the unemployment rate there. Such individuals are treated as new claimants and are not penalized by their pension income. Severance pay, however, would have to be accounted for in the handling of a claim.
Group Insurance
Retired members who are in receipt of a pension are eligible for coverage under the NLTA Group Insurance Program. Details regarding specific components and premium structures are available from the Programs and Services staff at the NLTA.
Method of Payment
Pension income is received from the Teachers’ Pension Plan Corporation. Once a member has ceased active service, they will need to provide information for direct deposit to the TPPC. A member who retires at the end of the school year and submits all required paperwork no later than June 30 of their retiring year, can anticipate the first pension payment on July 31, retroactive to the first of July. Pensions are otherwise paid on the 15th and last day of every month. If a member submits their paperwork to the TPPC well in advance of their retirement date, the TPPC can arrange first payment on time (July15 if retiring at the end of June for example). Any holdback payable is paid as a lump sum automatically for those retiring.
Note: Whenever a member decides to retire, it’s essential to do so at the “end of the month” as the member won’t be eligible to start receiving a pension until the month after the month that they are eligible to retire. To receive further clarification, contact Programs and Services staff at the NLTA.
Summary
Individual concerns and inquiries not dealt with adequately in this Infosheet should be referred directly to the Programs and Services staff at the NLTA or raised at one of the pre-retirement seminars sponsored by the Association.
This Infosheet is one of a series which are updated periodically and which provide information of a general nature only. Documents such as the Collective Agreement, legislation and policies referenced in Infosheets will govern the specific rights and benefits of members. For further information, please contact: Programs and Services, NLTA Office, 3 Kenmount Road, St. John’s, NL A1B W1. Telephone: 709-726-3223 or 1-800-563-3599 (toll free) • mail@nlta.ca • www.nlta.nl.ca
