You might be wondering whether working a few more months or even an extra year will make a difference for your pension. Indeed, there are several key milestones in your UN pension journey that will impact the benefit options available to you, as well as the value of your future entitlements from the Fund. In general, the longer you contribute, the higher your entitlement from the Fund. This article breaks down the key milestone years.

First, it’s important to understand some pension basics. Your future entitlement options and values are determined by the total length of your contributory service, and for retirement benefits, also by your age at the time of separation, as well as your grade and step levels during the last 60 months of your contributory service.

It’s also essential to know your normal and early retirement ages and understand the general conditions for each of the benefit options available to you. You can find more details on the Retirement ages page and on the Benefit Options page.

Key contributory service milestones

• 5 years of contributory service – Vesting:
  Once you reach 5 years of contributory service, you become vested in the Fund. Being vested means you are eligible for a periodic retirement benefit. The type of retirement benefit you can receive will depend on your age at the time of separation.
  
• 15 years of contributory service – Withdrawal settlement maximum increase:
  This milestone is relevant only if you are considering a withdrawal settlement. A withdrawal settlement is a one time lump sum payment consisting of the total amount of your own pension contributions, plus 3.25% compound interest accrued during your contributory service. After 5 years of contributory service, the amount of your own contributions plus interest is increased by 10% for each additional year of contributory service, up to a maximum increase of 100%. In practical terms, after 15 years of contributory service, you would receive double the value of your own contributions plus interest. Even if you separate before reaching 15 years, you still benefit from a partial increase, proportional to the number of years and months you contributed beyond the initial 5 years.
  
• 25 years of contributory service – Reduced early/deferred retirement penalties:
  This milestone is important if you are entitled to an early or deferred retirement benefit and you start receiving your pension before reaching your normal retirement age. If your contributory service is less than 25 years at separation, your pension is reduced by 6% for each year (and pro-rated month) that you are younger than your normal retirement age. However, if you reach 25 years of contributory, a smaller lifelong reduction rate will apply to your benefit. The applicable reduction factor depends on your date of entry into the Pension Fund. More details on the various reduction factors are available on the Benefit Options page under the Early Retirement tab.
  
• 30 years of contributory service – Lowest reduction rate (applies only to pre 2014 entrants):
  This milestone applies only to participants who joined the UNJSPF before 1 January 2014 and who are entitled to an early or deferred retirement benefit that starts before their normal retirement age. If you meet these conditions and have at least 30 years of contributory service, an even lower lifelong reduction rate applies than for those with 25-30 years of service.

While individual circumstances vary, understanding these milestone years can help you make more informed decisions about when to separate, which benefit option to choose, and whether working a little longer could meaningfully improve your future pension, should you have that option.

If you are approaching one of these milestones, you may also wish to use the UNJSPF benefit estimate tools or contact the Fund for personalized guidance via the online Contact Us webpage.