The assumptions in the following case have been kept to a minimum and do not take into account factors such as the other sources of income Ms. X may have when she retires, survivor benefits, etc.

The reduction related to the integration of the Public Service Pension Plan (PSPP) with the Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) that normally applies at age 65 was estimated, but the amount actually received from the CPP/QPP was not estimated in any of the scenarios. In this example, Ms. X will see all of her benefits reduced at age 65. Her deferred annuity, her annual allowance and her immediate annuity will be reduced by $8,900.58, $12,112.24 and $15,254.08 respectively. Her transfer value was also calculated based on a CPP/QPP integration reduction of $5,385 at age 65 (see Transfer Value in "Formulas and Methods ").

In scenarios 3 and 4, a rate of salary increase had to be set to take into account the probability that the salary will increase over the years based on the rate of increase under collective agreement provisions, on promotions, etc. In this example the assumption is that, at ages 53 and 58, Ms. X will have salaries of $72,999.17 and $88,814.66 respectively.

The maximum yearly pensionable earnings (YMPE) is set by the CPP annually and the average YMPE over the five years preceding retirement (the AMPE) is used in the calculation of benefits at age 65 in this table. Thus, a hypothetical AMPE had to be set for scenarios 3 and 4, which refer to years 2008 and 2013.

Basic data

Pensionable service:	20 years
Average salary (best 5 consecutive years):	$60,000
Age in January 2003:	48 years
Assumed rate of salary increase:	4%
Assumed rate of increase in the MPE:	4%
Assumed inflation rate:	3%

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