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)
 

Return to Home Page