Short-term disability benefits and your pension
Learn how a short-term disability leave might affect your pension.
If you are unable to work due to illness or injury, you may be entitled to receive benefits under a short-term disability plan.
Benefits under a short-term disability plan are full or partial pay that you receive from your employer or a group life insurance carrier when your illness or injury:
- Is not work related (and therefore not covered by WorkSafeBC)
- Does not yet qualify as a long-term disability
These benefits are sometimes called “paid sick leave” or “weekly indemnity benefits.”
How benefits under a short-term disability plan affect your pension
When you receive benefits under a short-term disability plan for time away from work, your pension may be affected. How it is affected depends on two things:
- Who pays the benefits: your employer or a group life insurance carrier
- If your plan has been approved by BC's College Pension Plan for pension purposes
Disability benefits paid by employer
If your employer pays your disability benefits directly to you, you and your employer will continue to make contributions to the plan and you will accumulate pensionable and contributory service
as though you were working. Your pension will continue to increase while you are receiving short-term disability benefits.
Sign in to My Account to confirm your service and salary. If you still have questions, contact your employer to ensure the contributions (on your behalf) have been made.
Disability benefits not paid by employer
If your employer doesn't pay your disability benefits directly to you (for example, if your benefits are paid by a group life insurance carrier), you and your employer will not make pension contributions while you are off work.
Receiving disability benefits from an approved disability plan
If you receive benefits from a short-term group disability plan approved for pension purposes, you will accumulate pensionable
and contributory service in the plan while you are on leave, as if you were working. Because you continue to accumulate service while on leave, we will send you a pension adjustment statement each year. You will need to submit this statement with your annual income tax return.
If you are still receiving disability benefits when you apply to retire, your pension will be calculated using your highest average salary before your leave, adjusted to reflect any change in the cost of living (as measured by the Canadian consumer price index).
Receiving disability benefits from a non-approved disability plan
If you receive benefits from a disability plan that is not approved for pension purposes, you will not accumulate pensionable and contributory service while on leave. This means the value of your pension will not increase while you are away from your job.
Your time away from work will count as a general leave of absence. You may be able to increase your future pension by buying service for this time once you return to work.