Retirement age

(1 min 09 s)

At what age can I retire?

What impact will my retirement age have on my pension ? 

In a defined benefit plan such as the Desjardins Group Pension Plan (DGPP), your retirement income is fixed and paid for life.

The normal retirement age in the DGPP is 65, as it is the case for the Quebec Pension Plan (QPP) and the Canada Pension Plan (CPP).

Reduction of pension in case of early retirement

If you choose to retire before the normal age set by DGPP, which is between 55 and 65 years of age, your pension will be paid over a longer period than initially planned. Consequently, the amount of your pension may be reduced to account for this extension. This is called an early retirement reduction. On the other hand, you will benefit from your pension earlier and for a longer period.

If you have a deferred pension, consult the specific applicable provisions. These may differ from the characteristics presented below.

For service before 2009

For years of service accumulated before 2009, you can receive an unreduced pension in the following cases:

• If you retire at age 65, the normal retirement age.
• If you retire at age 57 and the sum of your age plus your years of continuous service equals 85 years.

If neither of these 2 conditions is met, the amount of your pension will be reduced according to the most advantageous calculation for you:

• 3% multiplied by the number of years missing to reach age 65.

OR
• 3% multiplied by the number of years missing to reach age 57 plus 3% multiplied by the number of years missing to reach 85 years (your age plus your years of continuous service).

More specifically, the applicable reduction is calculated on a monthly basis and corresponds to 0.25% per month of anticipation.

For more information, consult the Early retirement reduction section of the Glossary.

For service starting in 2009

For years of service accumulated from 2009, you can benefit from an unreduced pension from age 62, regardless of your number of years of service.

If you choose to retire before age 62, the amount of your pension will be reduced as follows:

• 4% multiplied by the number of years missing to reach age 62, equivalent to 0.33% per month. For more information, consult the Early retirement reduction section of the Glossary.

Use the pension simulator to estimate your DGPP pension at different retirement dates.

You will also see the pension options that may be offered to you. Temporary pensions providing an advance on your retirement income between ages 55 and 65 may be available.

To illustrate the applicable reduction, here are two fictitious cases of participants opting for early retirement.

Example of Jacques: Retirement at 60, average salary of $65,000

Jacques has been working at Desjardins for 23 years. He plans to retire at age 60. Passionate about music, he dreams of opening his own recording studio upon retirement.

Receiving an average annual salary of about $65,000 during his best salary years, Jacques wants to understand the effect of the age at which he retires on the amount of the lifetime pension he will be entitled to.

Calculation of Jacques' Pension
For service before 2009
By adding the age at which Jacques wishes to retire (60 years) to his years of continuous service (23 years), we get a total of 83 years. Since this total is less than 85 years and he is over 57 years old, the following reduction applies:
• 3% per missing year until reaching 85 years, thus a total reduction of 6% for the 2 years to be filled.

This calculation method will be applied because it is more advantageous for Jacques than the reduction of 3% per year until reaching age 65, which would result in a total reduction of 15%.

For service from 2009
For years of service starting in 2009, a different reduction applies.
• Since Jacques plans to retire 2 years before age 62, his pension would be reduced by 4% per year, thus a total reduction of 8%, to compensate for the additional 2 years during which he would receive benefits.

Calculation of pension with reduction

For participation	Pension credit¹		Average salary of the best years²		Number of years of participation		Annual amount of lifetime pension	Early retirement reduction		Amount with reduction
Before 2009	1.3%	x	$65,000	x	9 years	=	$7,605	3 % x 2 years = 6%	-$456	$7,149
From 2009 to 2012	1.5%	x	$65,000	x	4 years	=	$3,900	4% x 2 years = 8%	-$312	$3,588
From 2013	1.5%	x	$65,000	x	10 years	=	$9,750	4% x 2 years = 8%	-$780	$8,970

Total annual amount of the DGPP Pension

$21,255

-$1,548

$19,707 ³

¹The pension credit gives a percentage (1.3% or 1.5%) of average salary up to average maximum pensionable earnings (MPE5) and 2% of average salary exceeding average MPE5.

²To simplify calculations, an average salary of $65,000 was used. The amount of your pension will be determined based on your salary for the 5 best-paid years of your career for service up to 2009 and your salary for the 8 best-paid years for service starting in 2013.

³Amount before tax deductions, to which is added the retirement pension from the Quebec Pension Plan or the Canada Pension Plan, the Old Age Security pension from Canada, and other retirement income.

Key points

With his 23 years of service and age of 60, Jacques would receive an annual pension of over $19,700 payable for life. This amount includes a reduction of about $1,550 due to the early retirement reduction.

Jacques will need to assess whether this pension, combined with his other sources of income, allows him to retire and achieve his projects. To help with his planning, he can:

• Use the DGPP Pension Simulator to estimate the pension amount at different dates and visualize payment options, including temporary pensions to increase his income before age 65.
• Contact his caisse advisor to set up a complete a personalized financial plan.

Example of Maria: Retirement at 60, average salary of $80,000

After 21 years of participating in the DGPP, Maria plans to retire at 60. Passionate about traveling, she dreams of exploring the world.

With an average salary of $80,000 during her best years, Maria seeks to understand how the early retirement reduction will affect the amount of the DGPP lifetime annuity she will be entitled to. This will help her determine if she can realize her retirement plans.

Calculation of Maria's pension
For service before 2009

By adding Maria's 21 years of service to the age at which she wishes to retire (60 years old), we get a total of 81. Since this total is less than 85 years and she is over 57 years old, the following reduction applies:

•

3% per missing year until reaching 85 years, resulting in a total reduction of 12% for the 4 missing years.

This calculation method will be applied because it is more advantageous for Maria than the reduction of 3% per year until she reaches 65 years, which would result in a total reduction of 15%.

For service from 2009

Since Maria wishes to retire 2 years before the age of 62, her pension will be reduced by 8% to compensate for the additional 2 years during which she will receive benefits.

Calculation of pension with reduction

For participation	Pension Credit¹	x	Average salary of the best years²	x	Number of years of participation	=	Annual amount of lifetime pension	Early retirement reduction		Amount with reduction
Before 2009	(1.3% x $66,580) + (2% x $13,420)			x	7 years	=	$7,938	3% x 4 years = 12%	-$953	$6,985
From 2009 to 2012	(1.5 % x $66,580) + (2% x $13,420)			x	4 years	=	$5,068	4% x 2 years = 8%	-$405	$4,663
From 2013	(1.5 % x $66,580) + (2% x $13,420)			x	10 years	=	$12,671	4% x 2 years = 8%	-$1,014	$11,656

Total amount of the DGPP Pension

$25,676

$-2,372

$23,304³

¹The pension credit gives a percentage (1.3% or 1.5%) of average salary up to average maximum pensionable earnings (MPE5) and 2% of average salary exceeding average MPE5.

²To simplify calculations, an average salary of $80,000 was used. The amount of your pension will be determined based on your salary from the 5 highest-paid years of your career for service up to 2009, as well as your salary from the 8 highest-paid years for service from 2013 onwards.

Key points
By retiring at 60 years old, with 21 years of service, Maria would receive an annual pension of $23,300 payable for life. This amount includes a reduction of nearly $2,400.

To assess whether this amount is sufficient to cover her needs, Maria will need to consider her other retirement income and the costs associated with her travel plans. To facilitate her planning, she can:

• Use the DGPP Pension Simulator to visualize the available payment options, including temporary pensions to increase her income before 65 years old.
• Contact her caisse advisor to set up a complete a personalized financial plan.

Desjardins Group Pension Plan

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Retirement age

For service before 2009

For service starting in 2009

Example of Jacques: Retirement at 60, average salary of $65,000

Example of Maria: Retirement at 60, average salary of $80,000

Retirement age

For service before 2009​​​​

For service starting in 2009

Example of Jacques: Retirement at 60, average salary of $65,000​

​​​Example of Maria: Retirement at 60, average salary of $80,000​​​

For service before 2009

Example of Jacques: Retirement at 60, average salary of $65,000

Example of Maria: Retirement at 60, average salary of $80,000