Retirement and the Termination Option

Recent early retirements brought to light an aspect of our retirement programme that required clarification.  At the time individuals make final pension arrangements just prior to retiring, they are given the option of taking their pension in a lump sum form or in the normal monthly payment form.  If the lump sum form is chosen, our Pension Plan calls this a “termination option”.  The question then arises as to whether an individual taking this option is retired and entitled to retirement benefits.  MUFA has taken the view that if one qualifies for a retirement pension under the Rule of 80 or after reaching normal retirement age, it should not matter how the cash is received.  The administration was sympathetic to this position and discussions made it clear that McMaster had slipped into, rather than chosen, this interpretation.  Subsequent to raising this matter in the Joint Committee and passing the motion reproduced below, President George has agreed to this being McMaster policy in the future.

Motion passed by Joint Committee [October 31, 1996]:
The Joint Committee recommends to the President that, in the future, those faculty who at the time of retirement elect the Pension Plan’s Termination Option, should continue to qualify for the normal retirement benefits.

The President also agreed to a second recommendation from the Joint Committee to the effect that this interpretation would apply also to early retirees in December 1996 and June 1997.

A. L. Robb
December 1996