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ILLUSTRATION OF 1% NPP PENSION FORMULA
            (effective for contributions on or after May 1, 2009)

 

 

  • Monthly pension amount  =  1% of total contributions

 

  • 1% per month means 12% of total contributions returned in pension payments in the first year on pension (1% x 12 months = 12%)
     

  • 60% of total contributions are returned in the first 5 years on pension (1% x 60 months = 60%)
     

  • Pension payments continue for lifetime (pensioners cannot outlive their pensions)

 

                                         Example (assuming contributions of $.50 per hour for 30 years, or $32,000):

                                                                    
                                             Total contributions                                                                       $ 32,000

                                                                                                                                                           x 1%
 

                                             Pension amount at age 65 - - per month                                   $     320                       

                                                                                                                                                           x 12
 

                                             Amount received each year on pension                                     $   3,840
 

                                             Cumulative pension received at age 80 (15 yr. x $ 3,840)        $  57,600

                                             Percentage return on $32,000 contributions                                   180%
 

                                              Cumulative pension received at age 85 (20 yr. x $3,840)        $   76,800

                                              Percentage return on $32,000 contributions                                    240%


                                           (1% formula is effective for all contributions after April 2009)