Glossary
A B C D E F G H I L M N O P Q R S T U V W Y
Accrued pension
The pension benefit earned under the Plan as of a particular date.
Actuarial present value (APV)
The value of an amount or series of amounts payable or receivable at various times, determined as of a given date by the application of a particular set of assumptions.
Actuarial valuation
Pension legislation requires that actuarial valuations be performed on defined benefit plans each year. The valuation establishes the total expected cost of the pension benefits payable to members, and is meant to ensure that the Plan is adequately funded.
A valuation monitors the progress of the plan's assets and liabilities. It shows whether there is a surplus or a deficit of funds to cover the value of accumulated pension benefits.
Actuarial valuations are based on plan member data and plan provisions and assumptions, such as members’ life expectancy, interest rates, salary increases and inflation. Actuarial valuation reports are filed with the Office of the Superintendent of Financial Institutions Canada (OSFI) and the Canada Revenue Agency (CRA).
Actuary
A professional who is responsible for calculating the liabilities of pension plans and the costs of providing pension plan benefits. Under the Pension Benefits Standards Act, 1985 (PBSA), all actuarial reports must be prepared by a person who is a Fellow of the Canadian Institute of Actuaries.
Alternative assets
Holdings that are considered non-traditional assets, for example infrastructure and real estate. Alternative assets are less liquid than traditional investments and are better suited to longer investment horizons. They also offer inflation protection for indexed pension plans.
Annual report
A publication that reports on a company's activities during the previous year. It includes the financial statements and notes to the financial statements.
Annualized return
A calculation for a period of less than a year as if the period were a whole year, taking compounding into account. An annualized return gives you a better idea of how a stock or fund performed and makes it easier to compare them over the long term. Securities that have the same average return may have different annualized returns. For example, it's possible for a stock or fund to have a good average return but a negative annualized return if a big drop in the third year offsets gains in the first two years.
Annuity
A monthly payment you purchase from an insurance company. The amount of the monthly payment is determined by the amount in your account, annuity prices at that date, and the type of annuity you choose. You can choose to buy an annuity with features such as cost-of-living increases, bridge pension until age 65, or benefits for your survivors. However, these features will increase the cost of your annuity.
Asset
Items with a monetary value, including cash, stocks, bonds, equipment and real estate.
Asset mix
The distribution of investments among different classes of assets, normally expresssed as a percentage, in order to meet a specific investment objective. Asset mixing is a proven way to diversify a portfolio in order to limit risk.
Assigned hours
The regular guaranteed weekly hours of work associated with a position.
Assumptions (actuarial assumptions)
Factors used by an actuary in forecasting uncertain future events affecting pension cost. They involve such things as estimating interest and investment earnings, inflation, mortality rates and retirement patterns.
Available hours
For CPAA employees in Revenue Group Operations, the difference between survey hours and the hours per week that the employee is required by Canada Post to be available to provide postal service.
Average maximum pensionable earnings (AMPE)
A five-year average of the year’s maximum pensionable earnings (YMPE) in the year you terminate, retire or reach age 65, whichever occurs first, and the YMPE for the four previous years.
Generally, termination of employment occurs on the date your employment terminates or the day for which you last receive pensionable earnings, whichever comes last.
If you continue to work beyond age 65, the AMPE will be calculated using the YMPE in effect during the year in which you reach age 65, and the four previous years.
If you die while you are still an employee, your AMPE will be based on the YMPE in effect the year of your death and the four previous years.
Average maximum pensionable earnings for a member leaving in 2024
| Year | YMPE |
|---|---|
| 2024 | $68,500 |
| 2023 | $66,600 |
| 2022 | $64,900 |
| 2022 | $61,600 |
| 2020 | $58,700 |
| Total | $320,300 |
| divided by 5 | |
| Average maximum pensionable earnings | $64,060 |
Benchmark
A point of reference used as a basis for evaluation or comparison. An index can be used as a benchmark against which the performance of a group of similar assets can be measured or compared.
Beneficiary
A designated person or group who may be entitled to receive survivor benefits.
Board of Directors (Canada Post Corporation)
Individuals appointed by the Government of Canada to oversee the management of the Canada Post Corporation.
Bond
Debt issued by a corporation or government, which provides a promise to the holder that the principal and a specified amount of interest will be repaid within a specific period of time. Investing in a bond is like lending money to a government or organization.
Bridge benefit
A temporary pension payable from the date you retire until you reach age 65, die, or begin receiving a CPP/QPP disability benefit, whichever occurs first. Your bridge benefit will not stop when a CPP/QPP pension (other than a CPP/QPP disability benefit) is taken prior to age 65.
Canada Pension Plan (CPP)
The government program that provides retirement, death, and disability benefits to Canadians, except those who have worked in Quebec(see Quebec Pension Plan). Along with Old Age Security and Guaranteed Income Supplement, it makes up one component of your retirement income. Working individuals and their employers make contributions.
Canada Revenue Agency (CRA)
The Canada Revenue Agency administers the Income Tax Act (ITA) and regulations, which set the maximum limits for registered pension plans. The ITA also sets the limits for employee and employer contributions in order to encourage Canadians to save for their retirement. It places restrictions on the amount of yearly earnings that Canadians can accumulate as tax-deferred pension income and the amount that can be transferred to other pension plans or to locked-in registered retirement savings plans (RRSP).
Canadian Forces Superannuation Act (CFSA)
A federal statute that provides pension benefits to members of the Canadian Forces.
Capital
Property, cash, and other financial assets used in a business.
Capital loss
Loss from the sale of assets classified as capital assets under federal income tax legislation including stocks, real estate and other investments.
Cash
Currency, bank balances, money orders and cheques.
Cash equivalent
Liquid investments such as Treasury Bills and Money Market Funds that can be easily converted into cash.
Cash flow
Cash receipts minus cash payments over a given period of time; or equally, net profit plus amounts charged off for depreciation, depletion, and amortization. It can be used as a measure of financial health.
Common-law partner
A person who is cohabiting with you in a conjugal relationship, having so cohabited for a period of at least one year.
Commuted value
An estimated value of your future pension benefit expressed in today's dollars. It is a calculation based on actuarial assumptions and market interest rates, which may fluctuate over time.
Consumer Price Index (CPI)
An indicator of the changes in consumer prices for a fixed basket of goods. It is computed by Statistics Canada based on over 600 consumer items. CPI is the most commonly used measure of inflation.
Continuous service
For Defined Contribution (DC) members, uninterrupted period of employment with Canada Post, from the last date of hire.
Current service cost
The additional pension obligation to be created over the coming year, as another year of credited service is added for current employees contributing to the Plan.
Debt
Money that is borrowed. The borrower is obliged to repay the principal plus a specified amount of interest by a pre-established date.
Deferred member
A person who:
- was a contributor to the Plan and,
- is no longer an employee, but
- is entitled to receive a payment from the Plan at a future date.
Deflation
A decline in the prices of goods and services. The opposite of inflation.
Dependent children
Your children, stepchildren and children adopted either legally, or in fact, who, at the time of your death, are dependent on you for support and are either less than age 18 or age 18 or more but less than age 25 and in full-time attendance at a school or university substantially without interruption since age 18 or your death, whichever occurred later. When death occurs after termination of employment only children, stepchildren and adopted children at the time of termination are considered when applying the above criteria.
Disability insurance plan
An insurance plan offered by Canada Post to its unionized employees as part of their wage loss protection program.
Disabled/disability
A condition of physical or mental impairment that prevents you from engaging in any employment for which you are suited by virtue of your education, training, or experience, and where such impairment can reasonably be expected to last for the remainder of your lifetime. This condition is determined from medical evidence provided in writing by a medical doctor who is licensed to practice in Canada.
Discount rates
Long-term interest rates used to calculate pension obligations.
Elective service
A period of past service with Canada Post or time when you were away on an authorized leave for which you did not pay contributions.
Eligibility service
Service while you are a member and contributing to the Plan, including service that you purchased and service transferred from another employer under a pension transfer agreement, to a maximum of 35 years. Eligibility service is measured the same for full-time and part-time service.
Equity
Common and preferred stock that represent a share in the ownership rights of a company and the right to collect dividends from profits. Private equity is not publicly traded. The term "equity" can also refer to the net worth of a company.
Extended Heath Care Plan (EHCP)
A plan that provides supplementary hospital and medical coverage to employees of Canada Post.
Fiscal year
The financial or accounting year of a corporation. A fiscal year is normally a 12-month period that may or may not follow the calendar year. At the end of a fiscal year, companies usually prepare their financial statements.
Fixed income
Bonds, treasury bills, mortgages and any other security which offers periodic income calculated at a fixed, specified rate of interest.
Foreign exchange
Instruments, such as paper currency, notes, and checks, used to make payments between countries.
Forward contract
A cash market transaction in which a seller agrees to deliver a specific cash commodity to a buyer at some point in the future.
Full-time employee
A person employed by Canada Post and
- assigned weekly hours of work of 30 hours or more; or
- in more than one part-time position, where the combined assigned hours for both positions is 30 hours per week or more.
Funded ratio
Ratio of the pension plan accrued liabilities as calculated on a wind-up basis. Measured as 100% funded, or less.
Funding
Systematic payments into a pension fund which, along with expected investment earnings, are expected to provide for all pensions and other benefits as they become due and payable.
Guaranteed Income Supplement (GIS)
A monthly non-taxable benefit to Old Age Security (OAS) recipients who have a low income and are living in Canada.
Highest average earnings (HAE)
The average of your annual pensionable earnings during your five consecutive highest-paid years of service during which you contribute to the Plan. If you have less than five years of service during which you have contributed to the Plan, the average of your actual pensionable earnings is used.
Pensionable earnings are annualized for part-time positions, which means that they are expressed as the pay you would have received if you had worked full time for the entire year.
Income Tax Act (ITA)
The Income Tax Act (ITA) and its regulations set the maximum limits for registered pension plans. The ITA also sets the limits for employee and employer contributions in order to encourage Canadians to save for their retirement. It places restrictions on the amount of yearly earnings that Canadians can accumulate as tax-deferred pension income and the amount that can be transferred to other pension plans or to locked-in registered retirement savings plans (RRSP).
Inflation
Occurs when purchasing power declines due to increase in the prices of goods and services. Inflation is expressed as a percentage change in the Consumer Price Index.
Infrastructure
An asset or resource of value to the community or society. Examples include roads, bridges and electrical facilities.
Interest
Money charged to a borrower by a lender for a loan or investment. Also refers to the return on funds that have been loaned or invested.
Interest rate
A rate which is charged or paid for the use of money. An interest rate is often expressed as an annual percentage of the principal. It is calculated by dividing the amount of interest by the amount of principal. Interest rates often change as a result of inflation, market conditions and Bank of Canada policies.
Investment
The purchase of items of value in order to earn income and/or increase capital. Examples of investments include bonds, equities and real estate.
Investment Advisory Committee (IAC)
Provides expert advice to the Pension Committee with respect to pension plan investment matters.
Investment earnings
For a company, net income or profit, generally used as indicator of future growth, potential dividends and, ultimately, stock prices.
Investment gain/loss
The realized or unrealized increase or decrease in market value of a portfolio at the end of a time period as compared to its market value at the beginning of that period.
Investment performance
The results produced by an investment over a given period of time.
Liability
An obligation that legally binds an individual or company to settle a debt. Liabilities are recorded on the balance sheet and can include accounts payable, taxes, wages, accrued expenses, and deferred revenues. Current liabilities are debts payable within one year, while long-term liabilities are debts payable over a longer period.
Life income fund (LIF)
An investment that provides retirement income. When you reach age 71, the Income Tax Act no longer permits you to keep your retirement savings in an RRSP. You can turn your RRSP into a life income fund. This fund requires you to take out a minimum amount of money, up to a certain maximum.
Lifetime pension
The monthly payment from the day of retirement until your death (excluding the bridge benefit).
Liquidity
The ability of an asset to be converted into cash quickly and without any price discount.
Locked-in retirement savings plan
This is an investment account that holds funds that must be used to provide retirement income. The money can grow tax free until you reach the maximum retirement age specified by legislation. This may be useful if you don't need or want to draw upon your retirement savings immediately after retiring.
Locking in
Rules that restrict access to money transferred from a pension plan to a personal account in order to ensure the funds provide retirement income.
Long-term disability (LTD) plan
The insurance plan offered by Canada Post to its non-unionized employees as part of their wage loss protection program. It provides benefits apart from disability pension benefits that may be available under the Canada Post pension plan.
Long-term replacement assignment
Long-term replacement assignment means any of:
- a single predetermined work assignment that commences on or after January 1, 2004 under the collective agreement with CUPW pertaining to Urban Postal Operations, has a duration of more than six months, and schedules or assigns hours of work of at least twelve hours a week;
- a single predetermined work assignment that commences on or after January 1, 2016 under the collective agreement with CPAA, has a duration of more than six months, and has assigned hours of work of at least twelve hours a week; and any subsequent assignments thereto of the same employee of more than twenty consecutive shifts in a single position where the assigned hours are at least twelve hours per week; or
- an assignment for a period of more than twenty consecutive shifts that commences on or after January 1, 2016 under the collective agreement with CPAA, has assigned hours of at least twelve hours per week for the duration of the assignment, and which, through one or more consecutive extensions of the assignment each of more than twenty consecutive shifts, is lengthened to be greater than six months in duration of uninterrupted employment in a single position; and any subsequent assignments thereto of the same employee of more than twenty consecutive shifts in a single position where the assigned hours are at least twelve hours per week. For greater clarity, the long-term replacement assignment in this situation shall begin on the day following the accumulation of six months of uninterrupted employment in the extended assignment. This six month period is referred to as the “qualifying assignment period”.
Market value/market price
The most recent price at which a security was bought or sold.
Net investment assets
Investments and investment related receivables minus investment related liabilities.
Office of the Superintendent of Financial Institutions (OSFI)
Regulates federal pension plans through the Pension Benefit Standards Act, 1985 (PBSA).
Old Age Security Program (OAS)
A monthly payment available to most people 65 years of age and older who meet the Canadian legal status and residence requirements.
Part-time employee
A person employed by Canada Post to work on a less-than-full-time basis, who is engaged to work for a total of at least 12 assigned hours per week, but is not a temporary employee.
Past service pension adjustment (PSPA)
The additional value generated whenever a person receives improved pension benefits for pensionable service since 1990 (for example, from service you acquire), value that would have been included in the PA for each affected year if the improved pension benefits had been known at the time.
Pension adjustment (PA)
An amount calculated each calendar year under the federal Income Tax Act that is used to determine your maximum annual RRSP contribution room. The adjustment reduces your allowable annual RRSP contribution room by taking into account the assumed value of any pension benefits earned or contributions made under a registered pension plan during the previous year.
Pension adjustment reversal (PAR)
A pension adjustment reversal is calculated when your employment terminates and you receive a commuted value, but not an immediate or deferred pension. It is the sum of your PAs and PSPAs since 1990 minus the commuted value of your pension for service since January 1, 1990. If the result is greater than $0, your RRSP contribution room will be restored by the amount calculated.
Pension Benefits Standards Act, 1985 (PBSA)
The federal statute that regulates pension benefits, administration, and funding of pension plans that provide pension benefits to employees of federally-regulated organizations (for example, railways, airlines, shipping companies, telecommunications, banks, and certain organizations that are for the general advantage of Canada). The full text of the Act is available on the Internet.
Pension Committee
Oversees the strategic direction of the Plan, administration and fund investments.
Pension obligations
The actuarial present value of pension benefits for service completed up to a particular date, calculated using best estimate assumptions.
Pension Transfer Agreement (PTA)
An arrangement for the transfer of a sum of money from the pension trust fund of one employer directly to the pension trust fund of another, on behalf of an employee who leaves the first employer and joins the second. The employee is then credited with a number of years of service in the second employer’s plan.
Pensionable age
The age at which you are entitled to receive an unreduced pension.
If you are a member represented by the Canadian Union of Postal Workers (CUPW) Urban Postal Operations (UPO) or Rural and Suburban Mail Carriers (RSMC) who became eligible to join the Plan on or after December 21, 2012, pensionable age is a) the later of age 65 or the age at which you have completed two years of eligibility service or the age at which you would have completed two years of Plan membership assuming that your Plan membership continues, or b) age 60 if you have at least 30 years of eligibility service.
For all other members, pensionable age is a) the later of age 60 or the age at which you have completed two years of eligibility service or the age at which you would have completed two years of Plan membership assuming that your Plan membership continues, or b) age 55 if you have at least 30 years of eligibility service.
Pensionable earnings
Your basic pay and other allowances paid for the performance of your regular duties, including corporate team incentive payments/corporate achievement payments, CPAA administration allowance, CPAA field support allowance, bilingual bonus, compression allowance, rest period allowance, lead hand differential, market premium RSMC personal contact item allowance and RSMC lock-change allowance. Excluded are special remuneration, individual incentive compensation, overtime, gratuities, pay for regular hours worked exceeding your assigned hours (except members of CUPW-UPO, PSAC and CPAA), and other compensation or allowances not specifically identified.
For postmasters in a privately owned or leased group office, the pensionable earnings calculation is based on regular pay for survey hours and one third of available hours; for postmasters in a corporate-owned or leased group office (level 2-6), based on regular pay for survey hours.
Pensionable service
Pensionable Service is the same as your eligibility service except if you occupy or have occupied a part-time position. If your eligibility service includes periods of part-time service, the part-time eligibility service period is multiplied by the ratio of your assigned hours (part-time pensionable service since January 1, 2004, for CUPW-UPO members, since April 6, 2005, for PSAC members, and since July 1, 2006, for CPAA members is calculated using your actual hours paid, excluding any overtime, or assigned hours, whichever are greater) to the normal hours of a full-time employee in the same occupational group. Your pensionable service is a factor used in the pension formula to calculate your pension benefit.
Pensioner
Any person who is in receipt of a monthly benefit from the Plan. A pensioner could be a retiree, a survivor pre-retirement, a survivor post-retirement or a dependent child.
Portfolio
The combined holdings of individuals or organizations that may contain a variety of investments and securities such as bonds, stock, cash, real estate and other assets.
Present value
The value today of a future sum of money or cash flow, given a specified rate of interest.
Proxy
Authorization given by a shareholder delegating to another shareholder, individual or entity the rights and responsibilities to represent the shareholder and vote at shareholders' meetings.
Proxy voting guidelines
A document which sets out voting guidelines that must be followed by the third party delegated to exercise the right to vote in respect of stocks held on behalf of the Canada Post pension plan.
Public Service Superannuation Act (PSSA)
The federal statute providing pension benefits to employees in the federal public service and those of participating employers which, before October 1, 2000, included employees of Canada Post.
Quebec Pension Plan (QPP)
The provincial government program providing retirement, death, and disability benefits to Canadians who have worked in Quebec. Along with federal Old Age Security and Guaranteed Income Supplement, it makes up one component of your retirement income. Working individuals and their employers make contributions.
Rate of return
The amount gained or lost on an investment over a period of time, normally as a percentage of the initial investment. Real return is a return that has been adjusted for inflation. Net return is a return that has been adjusted for expenses.
Reduced pension
The pension payable to you if you retire before reaching pensionable age. The Plan allows you to retire up to 10 years before pensionable age with an immediate pension. Your pension is reduced because you will be receiving it over a longer period of time.
Registered Retirement Income Fund (RRIF)
A plan similar to an RRSP, but one from which you must withdraw a minimum amount at specified intervals. There is no maximum on the amount you may withdraw.
Related employer
An employer who, under the Income Tax Act, does not deal at arm’s length with Canada Post, including an employer for whom pension benefits are paid from the Consolidated Revenue Fund of the Government of Canada or by an agent of Her Majesty the Queen in the Right of Canada.
Retiree
A person who:
- was a contributor to the Plan and,
- is no longer an employee, and,
- is in receipt of a monthly payment from the Canada Post Pension Plan.
Return
Also known as Rate of Return. The amount gained or lost on an investment over a period of time, normally as a percentage of initial investment. Real Return is a return that has been adjusted for inflation. Net return is a return that has been adjusted for expenses.
Royal Canadian Mounted Police Superannuation Act (RCMPSA)
The federal statute that provides pension benefits to members of the Royal Canadian Mounted Police.
S&P/TSX Composite index
A benchmark index made up of the largest capitalization stocks on the Toronto Stock Exchange, normally used as an indicator of the performance of the overall Canadian equity market. This is the successor to the TSE 300 Index.
Securities
Transferable investment products represented by certificates or documents of ownership or claim on income payments. Stocks, bonds, mortgages, derivatives, certificates of deposit and options are all examples of securities.
Shareholder (or Stockholder)
Individual or entity that owns one or more shares in a corporation.
Solvency
In a pension plan, the ability of the plan to meet its present and future pension obligations.
Solvency obligations
The actuarial present value of pension benefits for service completed up to a particular date, calculated using prescribed assumptions.
Solvency relief measures
Measures put in place by the Federal government to help pension plan sponsors meet their funding obligations with less sensitivity to short-term economic conditions.
Spouse
A person who is married to a member or a person who is party to a void or null marriage with the member. If, at the time when a determination is necessary, a member has a spouse from whom they are separated and a common-law partner with whom they are cohabiting, a reference to "spouse or common-law partner" means the common-law partner.
Statement of Investment Policies and Procedures (SIPP)
A document that details the investment strategy and investment goals of a pension plan.
Stock (or share)
A share of ownership in a company, which provides the holder with specified rights to the company's assets.
Stock exchange/stock market
A marketplace for buying and selling securities. The Toronto Stock Exchange (TSX), the New York Stock Exchange (NYSE), NIKKEI (Japan) and the London Stock Exchange are some of the major exchanges worldwide.
Supplementary Retirement Arrangement (SRA)
A non-registered arrangement to provide pension benefits in excess of the maximum amounts payable from the Plan under the Income Tax Act.
Survey hours
The weekly hours of work determined by Canada Post’s work content measurement system to be the hours required in a Revenue Group Office to perform the duties of the position.
Survivor post-retirement
In relation to a retired defined benefit (DB) member, the spouse or common-law partner at the time the member starts receiving a pension benefit.
Survivor pre-retirement
The spouse or common-law partner at the time of your death.
Target date fund
A fund that has an asset mix chosen with a specific timeframe in mind, such as a retirement date. A target date fund automatically shifts toward a more conservative asset mix as the target maturity date of the fund approaches.
Temporary employee
A person employed on a temporary and/or call-in basis, and who has no assigned hours.
Total return
Overall gain in an investment or portfolio, including interest, dividends and earned income, less any losses.
Trust
A legal arrangement in which one individual or trust company is responsible for holding and managing the assets for the benefit of another.
Trustee
An individual or organization with the legal title to and fiduciary obligation for the assets of another.
Unreduced pension
The pension you are entitled to receive if you retire at pensionable age.
Voting rights
The entitlement of stockholders, as part owners, to have a say in company affairs such as the composition of the board of directors and policy issues (See Proxy).
Weighting
The amount (usually percentage) that a specific variable represents overall. For example, the proportion of exposure that a specific asset, region or sector represents in a portfolio, compared to the benchmark against which the portfolio is measured.
Year's maximum pensionable earnings (YMPE)
The maximum pensionable earnings for the CPP/QPP on which CPP/QPP benefits are earned.