Clicking the term below will show the definition.
Alberta Consumer Price Index (ACPI)
Approved Long-Term Disability Income (LTDI) Plan
Canada Pension Plan
Cost-of-Living Adjustment (COLA)
Current Employment Status
Defined Benefit Plan
Highest Average Salary
Leave With Partial Salary
Locked-In Retirement Account (LIRA)
Matrimonial Property Order
Member Plan Status
Morgan Stanley World Index
Old Age Security (OAS)
Optional Service (Prior or Past Service)
Payment Due Date
Pension Plan Assumptions
Period on Loan to a Bargaining Unit
Portable Document Format (PDF)
Pre-retirement Death Waiver
Prior Service (Buyback or Past Service)
Reciprocal Transfer Agreement
Registered Retirement Savings Plan (RRSP)
Russell Canadian Property Index
SCM 91-Day T-Bill Index
SCM Bond Universe Index
Social Insurance Number (SIN)
Year's Maximum Pensionable Earnings (YMPE)
A member who is making contributions to LAPP or would be making contributions if not for being:
- on leave;
- in receipt of benefits under the employer's disability plan; or
- at the maximum pensionable service limit (35 years).
The estimated cost to LAPP of providing the increased benefits gained by a member who buys or transfers prior service. An actuarial reserve calculation takes into account a number of factors including salary scaling and mortality tables.
A mathematical analysis of the financial condition of a pension plan. An actuary prepares a plan valuation at least once every three years. The valuation shows if the contribution rates are higher or lower than what is needed to ensure the long-term funding of the Plan.
A person authorized by their designation as a Fellow of the Canadian Institute of Actuaries to prepare and sign actuarial valuations.
A weighted average of the cost of a basket of goods and services that are normally purchased by Alberta households. It includes such things as clothing, food, housing, gasoline, health, personal care services, recreation and education.
The designation of your pension benefits to one or more beneficiaries.
The criteria used by APS to approve LTDI plans are:
- all members employed by the employer in the group to whom the LTDI plan applies, except for those ineligible for coverage by reason of not meeting the medical requirements, must be covered by the LTDI plan;
- a member must not be required to apply for a pension as long as the member qualifies for benefits under the LTDI plan; and
- the LTDI plan must be filed with APS.
Alberta Pensions Services Corporation (APS) is LAPP's pension administrator. APS is responsible for providing services to the LAPP Board of Trustees, members, pensioners and employers.
If you have no pension partner, you should let LAPP know who would receive the benefit.
A Beneficiary is the person(s) you designate to receive a benefit if:
- you die before retirement; or
- you die before the end of the guaranteed period. This is only applicable if:
- you chose one of the Single Lifetime Guaranteed Term options; or
- you chose one of the Joint Lifetime options and both you and your pension partner die within the guaranteed period.
You can designate one or more beneficiaries or a charitable organization.
Even if you have a pension partner you should designate a beneficiary. That way LAPP knows to whom the benefit is to be paid if your pension partner predeceases you, or if your pension partner has waived the right to a benefit. If you have not designated a beneficiary and your Will does not specifically mention LAPP, payment will be made to your estate.
The federal pension plan administered by Human Resources and Social Development Canada on behalf of employees in all provinces and territories of Canada except Quebec, which operates the equivalent Quebec Pension Plan.
The actuarial present value of accrued benefits, determined using actuarial assumptions and methods recommended by the Canadian Institute of Actuaries. This represents the amount of money that must be set aside today, based on current interest rates, to provide pension payments at a future date.
Money paid into a pension plan by you and your employer. Your contributions are tax deductible and are made through payroll deduction. All contributions go directly to the LAPP fund. Contributions may also include payments towards prior service such as a period of probationary service or qualifying leave without salary.
Coordination is a feature offered to eligible members who retire before age 65 that allows for flexible retirement income planning. Coordination lets you increase your monthly payment temporarily from the time you retire until you turn 65. At age 65, the increase to your monthly payment stops and a permanent reduction to your monthly pension payment begins. The reduction will continue as long as you live and may add up to more than the increase you received before 65.
An increase in a pension benefit to compensate for inflation. Your pension will increase each January by 60% of the Alberta Consumer Price Index (CPI). The CPI is a weighted average of the cost of a basket of goods and services that are normally purchased by Alberta households. This includes things such as clothing, food, housing, gasoline, health and personal care, recreation, and education. COLA increases are calculated by taking the average of the CPI during the 12-month period ending each October and comparing it to the previous year's 12-month average.
Your current status of employment with your employer. This can be full time, part time or terminated (no longer contributing to the Plan).
A member who is no longer an active member of LAPP but has left pension benefits in the Plan. A deferred member may leave their benefit entitlement in LAPP until retirement.
A pension that does not commence immediately following termination from LAPP. A deferred pension may not commence earlier than the member's 55th birthday, unless the member qualifies for a disability pension, but must commence before December 31 of the member's 71st birthday.
Note: If the member was 69 or older prior to December 31, 2006, the pension must commence effective December 31 of the member's 69th birthday.
Defined Benefit Plans pay a monthly pension based on your salary and your length of service. The pension plan's obligation is to pay a stated benefit to each employee that depends on the employee's salary and length of service. The main benefits of a defined benefit plan are:
- Your benefit is guaranteed and you are provided a specified lifetime income regardless of market conditions or how long you live.
- You can plan for your retirement because you can estimate your future pension income. The pension estimator allows you to estimate your future monthly payments.
The pension plan fund is invested in common stocks (both Canadian and international), bonds, mortgages, and real estate and is managed by the Alberta Investment Management Corporation (AIMCo).
Retirement before being eligible to receive an unreduced pension. See "Normal Retirement" and "Postponed Retirement".
The amount of contributions with interest returned to the member to ensure that the member's contributions with interest in the account do not exceed 50% of the commuted value. Contributions paid and service credited for prior service are not included when calculating excess contributions.
A Joint Lifetime pension is payable for the lives of the member and pension partner. Members who have a pension partner at the time of their retirement must select one of the Joint Lifetime pension options unless the pension partner signs a Pension Partner Waiver, waiving his or her rights to the survivor benefit.
If you choose the Joint Lifetime Guaranteed At Least 5 Years option, on the death of either you or your pension partner, the same pension is paid to the survivor for his or her life. If you choose the Joint Lifetime Reduced by 1/3 Guaranteed At Least 5 Years option, at the first death of either you or your pension partner, the monthly payment is reduced by 1/3. This means that if the pension partner dies before the member, the member's pension will be reduced to 2/3 of the pension amount.
In both options, the pension is guaranteed for five years. If both you and your pension partner die before the end of the five year term, the pension will be paid to your beneficiary(ies) for the remainder of the term.
Note: If the member does not have 36 months of prior employment, the employer will not remit any contributions because the member will have to pay an actuarial reserve cost to establish the leave period as pensionable service.
Under the Matrimonial Property Act, an MPO can only be obtained in respect of a legal marriage. In certain circumstances, the regulations governing LAPP allow for the division and distribution of your pension benefits by making a one-time payment to the non-member ex-spouse without having to wait for the member to become eligible for a benefit. If you are a LAPP member going through a marital breakdown, your legal counsel should take these regulations into account when working on your matrimonial property settlement.
Your status under the Plan. See "Active Member" and "Deferred Member".
mypensionplan is a secure website that provides active members and deferred members of the Local Authorities Pension Plan with access to personalized pension information.
Retirement at exactly age 65. See "Early Retirement" and "Postponed Retirement".
This is previous employment with a public service organization within Canada during which you did or didn't belong to a pension plan. You may be able to buy back this period of service if you're not receiving a current or future pension from your former employer. (Only some types of public service organizations are eligible.)
Buying back optional service increases your length of pensionable service, thereby increasing your future benefits.
A "pension partner" means:
(i) a person who, at the relevant time, was married to a participant or former participant and had not been living separate and apart from him or her for 3 or more consecutive years,
(ii) if there is no person to whom subclause (i) applies, a person who, as at and up to the relevant time, had lived with the participant or former participant in a conjugal relationship
(A) for a continuous period of at least 3 years, or
(B) of some permanence, if there is a child of the relationship by birth or adoption;
Persons are living separate and apart
- if they are living apart and either of them has the intention to live separate and apart from the other, or
- if, before the relevant time,
- they had been living separate and apart for any period, and
- that period was interrupted or terminated by reason only that either of them become incapable of continuing to live separate and apart or of forming or having the intention to continue to live separate and apart of that person's own volition,
and the separation would probably have continued if that person had not become so incapable.
Plan assumptions are used in preparing actuarial valuation reports and are set by the pension plan Boards. They are long-term estimates of the economic and demographic assumptions for the Plan. These assumptions include factors such as interest rates, inflation rates, mortality rates and retirement ages for:
- members who are retiring, these assumptions are used to determine the optional forms of pension a member may select.
- members who are transferring into or out of the Plan, these assumptions are used to determine the value of the member's pension.
- members who are purchasing optional service, these assumptions impact the cost of optional service.
Portable Document Format (PDF) is a format used to deliver documents over the Internet. Adobe® Reader® (TM) is the standard software used to access PDF documents and can be downloaded, for free, from the Adobe® Website.
This is previous employment with a public service organization within Canada during which you did or didn't belong to a pension plan. You may be able to buy back this period of service if you're not receiving a current or future pension from your former employer. (Only some types of public service organizations are eligible.) Buying back prior service increases your length of pensionable service, thereby increasing your future benefits.
An agreement negotiated with another pension plan that allows members to transfer their pension when they move between plans.
If you retire between ages 55 and 65 and your age plus service totals less than 85 (we call this points), your pension is subject to a reduction. This is because, based on average life expectancy statistics, we will be paying out money over a longer period of time than if you retired at age 65. Currently, this reduction is 3 percent for each year you retire early. This reduction is based on your years short of age 65, or your years short of 85 points, whichever you would reach first.
A type of tax-deferred investment that is set up to hold and invest your savings until you retire. Most can be withdrawn at any time, but you will be taxed on the amount withdrawn.
An index maintained by Frank Russell. Measures the total return attributable to Canadian commercial real estate.
See "Pensionable Salary".
An index maintained by Scotia Capital Markets. The index measures the return attributable to 91-day Treasury Bills.
An index maintained by Scotia Capital Markets. Measures the total return attributable to bonds and includes representative bond issues by issuer (Federal, Provincial, Municipal and Corporate), quality (AAA, AA, AA, A, and BBB) and term (short-, mid-, and long-).
See "Pensionable Service".
A nine-digit number used in the administration of various Canadian government programs. You require a SIN to work in Canada or to receive government benefits.
See "Pension Partner".
Short-term government security.
The point at which a member ceases to participate in the Plan, e.g. retires or moves into a non-participating position.
An agreement negotiated with another pension plan that allows members to transfer their pension when they move between plans.
A pension that will not be reduced for early retirement. See "Reduced Pension" and "Early Retirement".
- is lump sum pay, whether variable or constant in amount from year to year, that is paid on or after December 3, 2003;
- must form part of a variable pay program, where the terms of the program are contained in a written policy or agreement;
- must form an ongoing part of the employee's compensation package and is payable to all employees in the program; and
- cannot exceed 20 per cent of the employee's gross basic pay.
Variable pay is not considered pensionable salary for a member who commences in the variable pay program within the last 12 months of employment before termination.
Weighted average means that some items are given more importance because a larger proportion of household income is typically spent on those items.
The date on which the employer issues a member's pay for a particular pay period. Pension contributions for a particular pay period must be remitted to APS within 15 days of the withholding date.
The year in which the employer withheld contributions that were remitted to the pension plan.