Calculating PSS Pension Benefits
When electing for a pension option in the PSS, you have a choice to convert some or all of your lump sum entitlement to an indexed pension which is payable for life. If you have reached preservation age, you can choose to convert 50% to 100% of your final benefit to a pension (but no less than 50%).
If you are under preservation age, and you wish to take a combination of pension and lump sum you are required to convert greater than 50% of your final benefit to a pension (this is because you cannot take more than your member component as a lump sum).
The rate of pension payable is calculated by dividing the lump sum you elect to convert by a factor based on your age at retirement. The factors for complete ages are shown in the following tables.
Pension conversion factors are calculated in years and days. The factors decrease as you get older which means your pension rate increases.
For example if you retired exactly on your 52nd birthday, your pension factor would be 12.6. However if you were age 52 and 175 days at retirement, your pension factor would be 12.5041, calculated as follows:
Note that the factors increase the earlier you become entitled to a pension, reflecting the fact that you are expected to receive the pension for a longer time. For example, at age 58, a $200,000 lump sum benefit converts to a CPI indexed pension of $17,544 per annum. At age 46, $200,000 purchases a CPI indexed pension of $14,493 per annum.
Table 1: PSS Pension Factors after Min. Retiring Age
Table 1: PSS Pension Factors before Min. Retiring Age
(Note: the factors in this table for ages 31 to 54 are only relevant for Redundancy benefits)