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My employer tells me that there is a concept of an 'earliest retirement age' which happens to be 55. basically if I retire at 55 instead of 65, the formula for the company pension (not Canada pension plan) is different (reduced). My employer offers a defined benefit plan.
Is this 'earliest retirement age' stipulated by government of Canada or by the employer?
It varies by jurisdiction. Read here about page 5
https://www.standardlife.ca/pdf/ge10129.pdf
Essentially normal retirement is usually 65 and early retirement is defined as up to 10 years early. You can always retire earlier but you won't get the pension until 55.
If you transfer the commuted value to a LIRA then you will have to follow the jurisdiction's LIRA rules.
You can almost certainly look up the rules online for any pension plan. If not just read one that's similar, as most are.
If you retire at 55, at 65 you'll probably get an un-reduced pension but note that years of service will be less. There will be many intricacies in the pension plan for this type of scenario.
A typical calculation is yrs * acc * avg * adj So normal values are
yrs = 35 years of service.
acc = accrual rate, I think this is always 2%.
avg = some kind of salary average like last 5 years avg, but only up to the maximum called YMPE.
adj = around 1/2 % or .33% increase or decrease per month from normal retirement. So retiring 10 years early gives a reduction of 40-60%
So say 25 yrs * 2% * 50,000 * (1-50%) = ??? to lazy.
Note that at age 65 most pensions have a reduction because of CPP/QPP. It doesn't matter how much your CPP is or when you take it. The reduction is based on your employer pension integration with CPP.
