Glossary
When it comes to pensions, sometimes there’s no easy substitute for the words used in the industry. We do our best to break it down here.
Did we miss something? If you find a word on our site that you don’t understand and it’s not listed here, let us know: askus@cssb.mb.ca.
A
The amount of pension a member has earned up to a specific date.
Mathematical estimates about future events (like life expectancy and investment returns), based on formulas and models, used to calculate how much the pension plan owes (obligations).
A professional who, among other things, calculates the value of the pension plan’s assets (the money it has now) and liabilities (the money it will need in the future). In Canada, an actuary must be a Fellow of the Canadian Institute of Actuaries.
An assessment carried out by an actuary to check the pension plan’s financial health, including its ability to pay pensions in the future.
The committee that represents employers’ interests in the pension and insurance plans.
The time over which any pension plan deficits (shortages) are planned to be paid off.
Regular payments, often monthly, that provide consistent income in retirement.
Anything of value that is owned by the pension plan. For example, investments and real estate.
How the fund’s investments are divided between different types of investments such as stocks, bonds, and real estate.
B
Vacation days earned but not used. Instead of taking time off, members get paid for them when they retire. In turn, this boosts the member’s pension payment. The option to bank vacation days varies by employer.
The person, people, or estate that will receive money from the pension plan when the member dies.
The average of a member’s five highest years of pensionable earnings. These do not have to be back to back.
Extra funds paid in retirement to help make up for a reduced pension, up to a certain limit.
The option to buy pensionable service for times when a member wasn’t contributing to the plan (e.g., parental leave or a non-permanent job). Buybacks increase future pension payments.
C
The federal pension plan that most working Canadians pay into. It provides monthly payments, typically starting at age 65. The amount is based on age, years of participation, and contributions.
The maximum amount a person needs to contribute to the CPP based on their income. The Canada Revenue Agency sets the limit and it changes yearly.
Administers tax legislation and regulations, such as the Income Tax Act, for the Government of Canada and for most provinces and territories.
The pension fund created under The Civil Service Superannuation Act.
Legislation (rules and a framework) that guide The Civil Service Superannuation Board (CSSB) in administering the pension plan.
CSSB administers the defined benefit pension plan for the Province of Manitoba and other employers. It also manages investments in the Civil Service Superannuation Fund (CSSF) and other pension plans.
The Board is the trustee of the pension plan. It has nine voting members. They delegate the day-to-day work and oversee the plan’s administration and investments. The Board’s duty is to act in the best interests of all members.
This term is used interchangeably with partner.
In Manitoba, a common-law partner is either:
- Someone who registered a common-law relationship under The Vital Statistics Act, or
- Someone who has lived with the member in a conjugal relationship:
- For at least three years if either person is married, or
- For at least one year if neither person is married
The lump-sum amount a member could take now instead of receiving future pension payments. This amount is calculated using an actuarial formula that considers interest rates, age, how long a member will live, and other factors.
The percentage of a member’s salary that must be contributed to the pension plan.
A pension increase to help offset rising prices (inflation), based on the Canadian Consumer Price Index. At CSSB, this increase is not guaranteed.
Forms that members must complete to officially declare their intention to retire. Submitting these forms starts the retirement process and ensures the pension is processed on time.
D
A payment made to a beneficiary or beneficiaries when a member dies.
A member whose employment has ended before retirement age and they kept their pension with CSSB so they can receive benefits later.
A pension kept with CSSB to receive later.
A type of pension plan that guarantees a fixed monthly retirement income for life. The amount is based on a formula that considers several factors such as years of service and salary.
A type of pension plan that sets out how much members and their employers contribute. At retirement, the amount available depends on the amount contributed and investment performance.
Determines the value of the plan’s liabilities (the cost of future payments to members). It helps the plan measure its ability to fund the pension plan. If investments earn less than the discount rate, the plan risks not being fully funded. The discount rate is calculated based on the expected rate of return on investments, administrative costs, and factors such as inflation and interest rates.
E
F
A person or institution in a position of trust. A fiduciary responsibility is a legal and ethical duty. It requires one party to act only in another party’s best interests.
A plan that has enough money (assets) to cover all pensions earned by members up to a certain date.
A way to measure how financially healthy a pension plan is. It compares the plan’s assets (money it has now) to its liabilities (money needed to pay future pensions). A ratio of 100% means the plan has enough to cover all promised pensions. Below 100% means a shortfall. Above 100% means there’s extra money.
G
A system that outlines who can make decisions, who can act on behalf of the organization, and who is responsible for the organization’s actions and performance.
H
I
A pension increase that helps offset rising prices (inflation). The increase is based on the Canadian Consumer Price Index. At CSSB, this increase is not guaranteed.
An option that lets members receive a higher pension from CSSB until they’re eligible for benefits from the Canada Pension Plan (CPP) at age 60 and/or Old Age Security (OAS) at age 65. After these ages, the CSSB pension is reduced for life to balance out the higher payments received earlier.
J
K
L
A plan that provides pension benefits to members of the Manitoba Legislative Assembly.
The value of pension benefits owed to members.
The committee that represents employees’ interests in the pension and insurance plans.
A personal retirement fund set up by a financial institution. It is used to build retirement income and to delay taxes until later. Each year, the account holder must withdraw a set amount, which changes with age.
Benefits that must be used for retirement income and cannot be taken as a lump sum cash payment.
A personal locked-in savings account set up by a financial institution. It is used to build income for retirement and to delay taxes until later years.
A one-time payment often taken instead of monthly pension payments for life.
M
The highest pension that can be paid from the plan, which is 70% of a member’s best five-year average pensionable earnings. Once the maximum is reached, no further contributions are made to the plan. This typically requires 40 or more years of service.
A pension payment option that ensures a minimum total amount is paid to a beneficiary, even if the member dies shortly after retirement. The monthly pension is always paid to the member for their lifetime.
CSSB’s in-house, tax-sheltered savings account. It’s similar to a Registered Retirement Savings Plan (RRSP).
N
A form used when someone is eligible to join the pension plan but isn’t required to. By completing this form, the person officially decides to join the plan and start contributing.
Forms that members must complete to officially declare their intention to retire. Submitting these forms starts the retirement process and ensures the pension is processed on time.
O
A monthly payment from the Government of Canada to people aged 65 and older.
P
This term is used interchangeably with partner.
In Manitoba, a common-law partner is either:
- Someone who registered a common-law relationship under The Vital Statistics Act, or
- Someone who has lived with the member in a conjugal relationship:
- For at least three years if either person is married, or
- For at least one year if neither person is married
The time a member works while employed and contributing to the pension plan. It is used in the pension plan formula to determine the pension amount. More pensionable service means a higher pension.
The earnings on which a member is contributing to the pension plan. Pensionable earnings can include banked vacation days, but excludes overtime, severance, and contract work. The higher the pensionable earnings, the higher the pension will be.
The entity, such as an employer or government, that establishes and supports the pension plan.
The ability to transfer pension benefits to another plan or financial institution, often when leaving employment.
A Power of Attorney is a legal document. It lets a member appoint another person to help manage their affairs if the member is unable to do so.
Q
A member’s full period of employment (or combined periods) excluding breaks of 54 weeks or more. Qualifying services determines when a member can receive a benefit.
R
A personal non-locked-in savings plan set up by a financial institution. It is used to build retirement income and to delay taxes until later years.
When the combination of age (minimum 55) and qualifying service equals 80 or more. For example, age 55 with 25 years of service equals 80. Members who reach the Rule of 80 can take an unreduced pension at that time.
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Pay for work done in the past but not received at the time. This often happens after a new contract is finalized when it includes pay increases that go back to the start of the negotiation period.
S
The option to buy pensionable service for times when a member wasn’t contributing to the plan (e.g., parental leave or a non-permanent job). Buybacks increase future pension payments.
Money paid to the employee often at retirement, based on years of service. This is not considered pensionable earnings and doesn’t count toward the pension.
The value of a pension that must be paid as a lump sum instead of monthly payments. This threshold is set out in provincial pension legislation.
A legal document in which a spouse gives up their right to survivor benefits under the pension plan. The waiver is required by provincial pension legislation.
A pension plan.
The committee that represents employees’ interests in the pension and insurance plans.
A benefit paid to a spouse or partner after a member’s death.
T
Contributions or benefits that are not taxed until they are paid out.
Choices available to a member who leaves the plan before retirement. For example, leaving benefits in the plan to take later or transferring them to another plan.
An arrangement that allows members to transfer their pensionable service between different pension plans, typically when changing employers.
An estimated amount of what a member may receive from the pension plan if their employment ends.
The amount of money a member can receive from the pension plan if a member leaves the plan before retirement.
U
The gap between the pension plan’s obligations (what it owes) and the assets it has to meet those obligations.
A pension benefit received without any reduction for early retirement, typically after meeting specific age and service requirements.
V
When a member can receive full benefits from the pension plan, often after a certain amount of service. At CSSB, members are vested when they make their first contribution.
W
X
Y
The maximum amount a person needs to contribute to the CPP based on their income. The Canada Revenue Agency sets the limit and it changes yearly.