Does the Final Withdrawal Cost Less Now?

Note: FD Tier 2 members refer to the final withdrawal as removing the excess/taking the loan, while PD Tier 2 members simply refer to it as the final loan.

Due to the recent pension changes, some FD-PD Tier 2 pre-retirees have asked if the final withdrawal costs less.  In some cases, a retiring member’s pension may be slightly higher using the updated 2019 factors as compared to the older factors when the pre-retiree elects to take the full final withdrawal.  The following is a basic example.

  • 50 year old PD Tier 2 pre-retiree
  • 20 year Service retirement
  • Required amount = $100,000
  • ASF balance = $120,000
  • Final average salary = $150,000




Maximum annual pension



“Cost” of final withdrawal



Adjusted annual pension $67,208