The following has been prepared as a guide for teachers who are contemplating retirement.

These notes contain information on:

1. procedures to follow in applying for a pension under the Teachers' Superannuation
    Act;

2. procedures to follow in applying for a service gratuity under Section 13,
    Memorandum of Agreement;

3. procedures to follow in applying for Canada Pension;

4. procedures to follow in applying for Old Age Security;

5. the application of the Employment Insurance Act;

6. Group Life and Health Insurance coverage for retired teachers;

7. Substitute Teaching;

8. Retired Teachers' Association.

1. Teachers' Pensions

    A retirement allowance is payable to teachers who have retired:

   a. at or after age 60 with not less than two (2) years of pension service, or

   b. at or between age 55 and 59 with 30 or more years of pension service, or

   c. with 35 or more years of pension service; with the calculation as follows:

Years of Pension Service x Average of five years of highest salary
          50

   d. At or between age 55 and 60 with at least 2 years of service but less than 30
       years with a reduction.

      The reduction is the lesser of:

     (a) one quarter per cent for each full month between the date of actual retirement
          and the date the person reaches the age of sixty years; or

     (b) one quarter per cent for each full month between the date of actual retirement
          and the date the person would reach thirty years of service

     from the pension that would otherwise be calculated if the person were age 60.

    To apply for a pension, you may receive the necessary form from The
    Superannuation Commission, P. O. Box 2000, Charlottetown C1A 7N8 (telephone
    368-4004, Fax 368-6622).

    If you are retiring on June 30, you should submit your application to the
    Superannuation Commission NO LATER THAN MID-MAY.

    If you are applying for a disability pension, you should submit your application for
    pension before the termination of your sick leave. The definition of disability reads
    as follows:

           "Totally and permanently disabled" means, in relation to an individual,
            suffering from a physical or mental impairment that prevents the individual
            from engaging in any employment for which the individual is reasonably
            suited by virtue of the individual’s education, training or experience, and that
            can reasonably be expected to last for the remainder of the individual’s
            practical working life.

    Service pensions will be effective the day after you meet the eligibility
    requirements.

    Disability pensions are effective the day after your last day of paid sick leave. In
    both cases pensions are payable monthly by direct deposit in the last week of
    each  month.

    The Teachers' Superannuation Act provides for pensions to be increased by 60% of
    the Consumer Price Index, to a maximum of 4% per year. This escalation takes
    place once a year and becomes effective on the July cheque each year.

2. Service Gratuity

    A service gratuity is payable to a teacher who has retired and who meets one of
    the criteria in (a) and any one of the criteria in (b), (c) or (d).

   a. The teacher has ten or more years of continuous service immediately prior to
       employment termination, OR has 20 or more years of total service;

       and meets one of the following criteria:

   b. the teacher retires at age 55 or more, or

   c. the teacher retires having 30 or more years of service, or

   d. the teacher's employment terminates because of disability, death, or contract
       termination under Section 90 of the School Act.

    The gratuity is calculated on the basis of four days pay for every year of service
    with an employer on P.E.I., including fractional years, for which the teacher has
    made contribution to the P.E.I. Teachers' Superannuation Fund, not to exceed
    100 days. The number of days accumulated is divided by 196 and the result is
    multiplied by the teacher's salary in effect on the date of termination of
    employment.

    To receive the gratuity a teacher who qualifies must write to the Superintendent of
    the Unit and request the gratuity. The teacher should also indicate whether he/she
    wishes to receive the gratuity in July or wishes to defer the gratuity until January of
    the following year, for income tax purposes.

    The gratuity is payable in a lump sum and income tax will be deducted at source.
    The gratuity may be paid directly into an RRSP for any service prior to 1996 and
     the teacher may defer any taxes on the gratuity until the RRSP is de-registered.

    A teacher claiming a gratuity because of disability must submit evidence of
    disability to The Superannuation Commission, Department of Education and Early
    Childhood Development, PO. Box 2000, Charlottetown, C1A 7N8.

3. Canada Pension Plan

    Canada Pension is payable separate from the teacher's pension. You are eligible
    for Canada Pension benefits, on a reduced basis, at age 60.  Unreduced Canada
    Pension benefits are available at age 65.

  . For 2012, the reduction which applies to anyone who receives benefits prior to
    age of 65 is 0.52  of one percent for every month that a persion is below the age of
    65.  This reduction will increase to 0.54 in 2013, 0.56 in 2014, 0.58 in 2015
    and 0.60 in 2016.

    The Teachers’ Superannuation Act (TSA) is integrated with the Canada Pension
    Plan (CPP). This results in a reduction in the pension payable by the TSA.
    Integration will occur at age 65 or immediately, if a teacher receives a disability
    pension from the TSA. The formula for integration reads as follows in Section 22(1)
    of the Act:

    Where a person receiving a pension under this Act reaches the age of sixty-five
    years, the pension payable under this Act shall be reduced by 0.7% of the
    person’s average salary rate for the highest five years of salary, for each year of
    service after July 1, 1972, and that reduction shall be computed only on that
    part of the person’s salary which constitutes the "Year’s Maximum Pensionable
    Earnings" as defined in the Canada Pension Plan.

    Application forms and further information are available at Human Resources
    Development Offices, 1-800-277-9914 (English) or 1-800-277-9915 (French).

    You should apply for this benefit at least four months prior to the date on which
    you  wish the benefits to commence.
  

4. Old Age Security

    A teacher is entitled to the Old Age Security Pension at age 65. YOU MUST
    APPLY FOR IT!

    Three months prior to attaining age 65 you should pick up an application form from
    the Human Resources Development Offices in Charlottetown or Summerside,
    complete it and mail it.

    The maximum monthly benefit payable as of January 1, 2012 is $540.12. This
    figure is adjusted quarterly for the cost of living.
  
5. Employment Insurance

    Regular employment insurance benefits are not available to most teachers who
    receive a pension because pensions are regarded as income for employment
    insurance purposes.

    If your pension income is below the employment insurance benefit rate you may be
    eligible for some benefits. You must be available for work, actively seeking work
    and apply for the benefit.

    Further information is available from your local Human Resources Development
    Canada Offices.

6. Group Life and Health Insurance

    A teacher who retires before, at or after age 60 and before age 65 may continue
    his/her term life insurance, and his/her accidental death and dismemberment
    insurance until age 65. At age 65 a teacher who had retained Option A1 coverage
    in retirement is eligible to have term life coverage ($10,000) at a low premium, for
    the remainder of retirement. As well, up to $100,000. of accidental death and
    dismemberment insurance can be retained until age 75. Further details are
    available from Johnson Incorporated, 111 Kent Street, Charlottetown,
    C1A 4B6 (1-800-371- 9516).

    A teacher who retires and who has Hospital and Health Insurance (Option B1)
    coverage with the P.E.I.T.F. Plan may continue this insurance in retirement. The
    teacher will have to pay the full premium because Government does not cost-share
    for retired teachers. For further details contact Johnson Incorporated, 111 Kent
    Street, Charlottetown, C1A 4B6 (1-800-371-9516).

Note: The Dental Plan is not available to retired teachers.

7. The Retired Teacher and Substitute Teaching

    Teachers who are receiving a service pension may substitute for any number of
    days in a school year. If a retired teacher signs a contract to substitute for a
    teacher who is on a long-term leave then the retired teacher's pension will be
    stopped for the period of the contract and will be resumed when the contract is
    terminated. Substitute teaching on a day-to-day basis will have no effect on your
    pension.

    Teachers who are receiving a disability pension are not eligible for substitute
    teaching. Any disabled teacher who is receiving a disability pension and who
    substitutes will have his/her disability pension placed in jeopardy.

8. Retired Teachers' Association

    The P.E.I. Retired Teachers' Association has been organized for the social and
    economic benefit of retired teachers. This organization provides retired teachers
    with a vehicle for expressing their concerns to other institutions and organization.
    Contact the P.E.I.T.F. office for further information on this Association.