Monthly pension or lump sum payment
Monthly pension or lump sum payment
Most plan members choose a monthly pension option at retirement. However, members can choose a lump sum payment instead.
Monthly payments give you a predictable dollar amount for life, while a lump sum gives you all your pension money at once. The best option depends on your situation.
CSSB staff can help explain these options but can’t tell you which is best.
Monthly pension
Reliable income and survivor benefits
Monthly pension payments give you steady income for life. If you choose a beneficiary option, it will also provide income to your spouse, partner, or beneficiary for the rest of their life if you die first. Since the amount you get doesn’t change with market fluctuations, you can budget confidently without having to manage investments.
Inflation protection
With a monthly pension, it may be topped up to help you keep pace with cost-of-living increases. However, these increases are not guaranteed.
Security
Your pension plan is backed by a group of employers including the Province of Manitoba and is managed by investment professionals. It’s a large, non-profit plan that’s regularly checked for financial health by the Board and an independent actuary. The plan is expected to run indefinitely.
Access to retiree insurance benefits
Group insurance
If you belong to the Public Service Group Insurance Fund at retirement and start your pension right away, you can keep your coverage without a medical check. This may give you cheaper life insurance than you could get on your own or may not be available to you for health reasons.
Health insurance
You may qualify for retiree health insurance through Manitoba Blue Cross or the Manitoba Association of Retired Government Employees. This may give you access to better or more affordable health care coverage.
One-time lump sum payment
Control over investments
Choosing a one-time lump sum gives you control of your money but comes with more financial risk.
This option might be right for you if you:
✓ Are comfortable managing investments and related fees
✓ Trust your financial advisor
✓ Have other income sources
✓ Can manage changes in cash flow
The biggest risk is outliving your money.
Shortened life expectancy
If you expect to live a shorter life, a lump sum may give you greater flexibility for estate planning.
Other considerations
A lump sum can take three to four months to pay out. You must be prepared to support yourself without this income.
Taxes on a one-time lump sum can be high, consider reviewing with a tax expert.
Consider getting the advice of a financial advisor or ask your employer about financial planning through an Employee Assistance Program. Also ask whether your decision affects any employer-sponsored benefits.
Fact Sheet
Lump sum payment calculations:
Resources
Monthly pension or lump sum payment
Most plan members choose a monthly pension option at retirement. However, members can choose a lump sum payment instead.
Monthly payments give you a predictable dollar amount for life, while a lump sum gives you all your pension money at once. The best option depends on your situation.
CSSB staff can help explain these options but can’t tell you which is best.
Monthly pension
Reliable income and survivor benefits
Monthly pension payments give you steady income for life. If you choose a beneficiary option, it will also provide income to your spouse, partner, or beneficiary for the rest of their life if you die first. Since the amount you get doesn’t change with market fluctuations, you can budget confidently without having to manage investments.
Inflation protection
With a monthly pension, it may be topped up to help you keep pace with cost-of-living increases. However, these increases are not guaranteed.
Security
Your pension plan is backed by a group of employers including the Province of Manitoba and is managed by investment professionals. It’s a large, non-profit plan that’s regularly checked for financial health by the Board and an independent actuary. The plan is expected to run indefinitely.
Access to retiree insurance benefits
Group insurance
If you belong to the Public Service Group Insurance Fund at retirement and start your pension right away, you can keep your coverage without a medical check. This may give you cheaper life insurance than you could get on your own or may not be available to you for health reasons.
Health insurance
You may qualify for retiree health insurance through Manitoba Blue Cross or the Manitoba Association of Retired Government Employees. This may give you access to better or more affordable health care coverage.
One-time lump sum payment
Control over investments
Choosing a one-time lump sum gives you control of your money but comes with more financial risk.
This option might be right for you if you:
✓ Are comfortable managing investments and related fees
✓ Trust your financial advisor
✓ Have other income sources
✓ Can manage changes in cash flow
The biggest risk is outliving your money.
Shortened life expectancy
If you expect to live a shorter life, a lump sum may give you greater flexibility for estate planning.
Other considerations
A lump sum can take three to four months to pay out. You must be prepared to support yourself without this income.
Taxes on a one-time lump sum can be high, consider reviewing with a tax expert.
Consider getting the advice of a financial advisor or ask your employer about financial planning through an Employee Assistance Program. Also ask whether your decision affects any employer-sponsored benefits.
Fact Sheet
Lump sum payment calculations: