How does terminal funding work?
Consider a 50-year-old IPP member as at January 1, 2009 who has T4 earnings of $111,111 or more from 1991 to 2007 and $116,667 in 2008. Assume that the member will retire at age 60 on January 1, 2019 with 27 years of pensionable service (1991 through 2018). His restricted funding liability at age 60 would be $1,240,000 while his terminal funding liability would be $1,501,000. Thus, the potential terminal funding opportunity for this member would be $261,000 ($1,501,000 less $1,240,000).
