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When we receive retro, it is back pay for percentage increases. How does this affect pensions? Do they go back and adjust our yearly pay for the years covered by the retro? I ask this since Tier 3 pension is based upon best 5 years in a row. As an example, lets propose:
2022 - End of year salary $96k
2023 - End of year salary $96k
2024 - End of year salary $96k
2025 - End of year salary $160 ($96k plus a $64k retro)
The pension would be closer to the average of $96K if they dont redistribute the $64k to the previous years:
2022 - 96k plus 8k retro
2023 - 96k plus 12k retro
2024 - 96k plus 18k retro
2025 - 96k plus 26 retro
When readjusted, your pension average is much higher. So does anyone know for sure if they readjust salaries with the retro?
They do and you also will most likely have a pension contribution shortage and will need to pay the difference in contributions. Not sure if that applies to Tier 2 but it does for Tier 3.
