Bridge Benefit: How is it calculated?

In addition to their annual pension, many defined benefit pension plans offer an additional temporary benefit (bridge benefit) to workers who retire before age 65.

Voyant allows the user to input the Bridge Benefit in addition to the basic amount of the DB pension.

Here are the different ways to input DB pension amounts of different pension types:

  1. Currently Receiving 
    If the user is currently receiving DB pension and is younger than 65, the app allows to input a ‘Bridge Benefit’ amount in addition to the basic benefit amount. 
    When the system calculates the actual benefit received every year, it will add the bridge benefit amount on top of the basic benefit amount before the user reaches 65 years old, after that the user will only receive the basic benefit.
  2. Use Statement

Like the Currently Receive, the user can give a ‘Bridge Benefit’ amount, and that amount is added to the basic benefit if the user retires before 65.

  1. Estimate from Income


The configuration of Bridge Benefit for a DB pension includes the following fields:


Pensionable Service Up to Year: Some plan allows users to accumulate bridge benefits for service up to a certain year, e.g. Canada College Pension plan allows to earn bridge benefits for service up to the year 2015; for Canada Teacher’s Pension plan, it’s up to year 2017.


Accrual Rate: The rate of bridge benefit earned for every year of service.


Early Retirement Reduction Rate: If a user retired early and received Bridge Benefit during early retirement, the basic benefit will be reduced after the full retirement age which is 65 years old. This is the rate the basic benefit will be reduced.


The calculation formula is: 

bridgeBenefitAmt = accrualRate * salaryUpToYMPE * yearsOfServiceEligibleForBridgeBenefit


During early retirement:

benefitAmt = (basicBenefit + bridgeBenefitAmt) * ( 1 – reductionRate * earlyRetirementYears)


At and after full retirement age, only the basicBenefit is received.