Retirement and Pensions

Retirement is one of life’s big milestones. Whether you’ve already retired, you’re about to retire, or want to start planning from your early or mid-career, there’s lots to know about your benefits and your rights that will help you plan.

Part of being an NBNU member means having the benefit of a pension plan and retirement allowance to help you financially at the end of your career. There is also the option of a phased retirement, in which you may reduce your work schedule up to five years prior to retirement. Find details of these options below.

Pension Plans

NBNU members are enrolled in different pension plans depending on their workplace or bargaining unit.

Retirement Allowance

A retirement allowance is a lump sum payment made to employees in recognition of service at retirement. It is separate and distinct from your pension. Retirement allowance is calculated such that the employer pays an employee or their beneficiary an amount equal to five days pay for each full year of continuous service, not to exceed 125 days at the employees’ rate of pay.

The employer must advise, within 45 days of application, the amount of the retirement allowance owing and the date the payment can be expected.

As of April 1, 2016, employees meeting the existing eligibility requirements for retirement allowance are able to request a voluntary payout of their accrued benefit in the form of a lump sum. Once a member has taken the voluntary payout, they will no longer accrue this benefit.

A full year of continuous service is equal to 1957.5 hours of seniority.

The employee’s “rate of pay” is the regular hourly rate identified in the collective agreement in Appendix “A.” The allowance would be paid at whatever current step the employee is at in the salary scale at the time of retirement. It would not include shift differentials, education premiums or overtime.

While everyone’s financial circumstances are different, and we strongly advise members to seek independent financial advice; there is one commonality—the retirement allowance will be paid out based on the “rate of pay on the effective date.” For example, in April 2016, an RNCA with retention premium would have it paid out based on an hourly rate of $39.78. If that same RN waited until the end of the contract to request the voluntary payout, it would be based on a rate of $40.78.

Yes, income tax will be deducted if the employee chooses to take it in a lump sum payment.

There may be situations when an employee can transfer all or part of their retirement allowance to a registered pension plan or RRSP. Employees would have to seek financial advice on this matter.

Yes, if eligible, this can be done in consultation with the Compensation and Employee Benefits Division with the Province of New Brunswick or with the Nursing Home Pension Plan, depending on where you work.

Yes. To receive this benefit, you must request your retirement allowance before resigning your position.

No. Under the conditions of the phased-in retirement plan, your retirement allowance would not be affected.

Yes. It would be affected in the way that you would be accumulating service on a part-time basis. Therefore, when calculating the full years of continuous service, you would have less than if you continued to work full-time.

For those approved leaves of absence where you have continued to accumulate seniority—worker’s compensation or maternity leaves—your allowance will not be affected, but for those approved leaves where you do not accumulate seniority, your years of service used to calculate your allowance would be affected.

When an employee has a permanent disability and requests to retire or when the employer requires an employee to retire due to a permanent disability, the retirement allowance will be paid for the service that the employee has accumulated up to their date of disability. If for some reason the employer did not pay, there are processes identified in the collective agreements to challenge this.

When an employee is laid off and not recalled, the retirement allowance shall be paid in a lump sum 18 months after the date of layoff. With the new contract, an employee will now be eligible for a subsequent “layoff allowance” if they have already taken the voluntary payout of their retirement allowance at an earlier time.

In the event of the death of an employee, the employee’s estate/beneficiary shall be advised within 45 days of the amount of the allowance and the date upon which it will be paid.

Phased Retirement

Phased retirement is an option for full-time employees in the CBE (Certain Bargaining Employees) Pension Plan to reduce their work schedule up to five years prior to retirement while still receiving 85% of their salary.

The employer continues to pay for hours worked in your reduced work schedule and then once a month you receive a lump sum payment from “future pension earnings,” sometimes referred to as a “pension prepayment.” This payment comes from the Pension Plan through the Compensation and Employee Benefits Division with the Province.

All full-time employees, age 55 and over, who have a minimum of five years of pensionable service in the CBE Pension Plan are eligible for phased retirement. You can also reduce your work schedule to .5 (50%) or .6 (60%) of full-time work. The work schedule must continue on a regular basis (i.e., working six months and then not working six months is not permitted).

How to apply

To make an informed decision whether phased retirement is right for you, request an estimate from the benefits officer from your workplace’s Human Resources Department. The estimate will tell you:

  • What your pension would be if you participated in phased in retirement
  • What your pension would be if you just retired early
  • What your pension would be if you worked to age 60 or 65

You should apply for estimates at least six (6) months in advance of your retirement date, and only after all information has been received should you sign the formal request to participate. Entry dates for the program are: March 1st, April 1st, May 1st, September 1st, October 1st and November 1st of any calendar year.

Having trouble getting an estimate or need more information?

Contact the Compensation and Employee Benefits Division of the Province of New Brunswick at 1 (800) 561-4012 and ask to speak to a benefits officer. Alternatively, you can contact your Labour Relations Officer at NBNU.

The option to participate is at the discretion of the employer, however, the request cannot be unreasonably denied.

Yes, the employer has the right to change your schedule. However, the new schedule must respect the terms of the Collective Agreement.

Yes, the pension prepayment is taxable.

You can do phased retirement for a total of five years, between the ages of 55 to 65. The phased retirement period must be taken in “full-year” blocks (i.e. participating for 3.5 years is not an option), but you can participate for less than five years (i.e. for one year, two, three, four or five). There are some restrictions under the Income Tax Act and these would be identified to you in your estimates from the Compensation and Employee Benefits Division with the Province.

Once the formal request to participate is signed, you must identify a retirement date. You can retire earlier but cannot retire later than the date given.

During the phased retirement period, no pension contributions are required either by the employee or the employer.

While participating in phased retirement, you continue to accumulate pensionable service in your pension plan as if you were working full-time and making your contributions. When you request estimates from the Compensation and Employee Benefits Division, you will be able to see any impact your participation in phased retirement would have on your pension before you make a final decision to participate.

No, your retirement allowance will be calculated as if you worked full time.

Your vacation, sick time, statutory holidays and seniority would accumulate based on your part-time status. Your LTD coverage and premiums would be based only on your part-time status. Health and dental would remain unchanged.

Yes, as long as the position you are applying for has the same number of working hours (same FTE) as your phased retirement position.

Yes, however, you would not be entitled to an equitable share of the casual work, and hours worked over and above your part-time status would not change your lump sum payment from your pension prepayment.

There is no restriction on working overtime. The regular provisions of the Collective Agreement apply.

The regular provisions of the Collective Agreement will apply.

Find your Labour Relations Officer

You’re not in this alone. Labour Relations Officers can help you navigate the system to make sure you are using the power available to you. Find yours in the Member Portal.

Learn about Senior Nurses Pay

The Recognition and Retention Premium (or Senior Nurse Pay) is a salary adjustment of three percent (3%) for active Registered Nurses who have worked for over 25 years.