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General Questions About Your Plan

Is the Public Service Superannuation (PSSA) Pension Plan financially sound?

Can the Public Service Superannuation Plan (PSSA) go bankrupt?

What is the Public Service Pension Centre (PSPC - also known as "Shediac".)

What earnings are pensionable?

Does an "85 point Factor" really exist?

What is medical retirement?

What should I do if I am forced to retire on medical grounds?

How do survivor pensions work?

Where can I get more information on CPP/QPP benefits?

Potential Changes To Your Plan

I have heard that the government may change our pension plan from a Defined Benefit to a Defined Contribution plan, is this true?

Can the government take away the pension benefits that I have already earned?

Can the government pay me less than I am entitled to?

Important Financial Considerations

What should I do if I am planning to retire within the next five years?

Can I buy back service?

Should I buy back service?

When is a Past Service Pension Adjustment (PSPA) triggered?

When can I start to receive CPP/QPP pension benefits?

Should I consider applying for early CPP/QPP pension benefits?

Is CPP/QPP or pension income splitting worthwhile?

When I am retired, should I have my CPP/QPP pension taxed at the source?

How much do I contribute into the PSSA pension?

What is the formula used to calculate my pension?

How much have I contributed to CPP/QPP?

Why is my pension clawed back at age 65?

Should I leave the PSSA Plan before age 50 and transfer my pension into a locked-in RRSP?

How Is PIPSC Defending its Members' Pensions and Benefits Rights?

When will retirement sessions be held in my area?

What is the status of our legal challenge on the pensions surplus issue?


Is the Public Service Superannuation (PSSA) Pension Plan financially sound?

Yes, according to the latest triennial Actuarial Report (dated March 31, 2008), the plan has a surplus of $5.6 billion. Go to http://www.osfi-bsif.gc.ca/osfi/index_e.aspx?DetailID=505 for detailed information and to review the Report.

Can the Public Service Superannuation Plan (PSSA) go bankrupt?

No, as the deficit is covered by the government of Canada.

What is the Public Service Pension Centre (PSPC - also known as "Shediac".)

The Public Service Pension Centre (PSPC) is the primary office responsible for the administration of the pension plan for federal public service employees, the Public Service Superannuation Act (PSSA). The PSPC is your first stop for getting answers to your questions. The Institute does not have access to members' personal pension data and therefore members are encouraged to contact the PSPC directly for individual, specific information. PIPSC can however help clarify issues and ensure that the PSPC provides you with the assistance you are entitled to. You can contact the PSPC at 1-800-561-7930 or visit http://www.tpsgc-pwgsc.gc.ca/pension.

What earnings are pensionable?

As a guideline, pensionable earnings include your Base Pay, Acting Pay, Bilingual Bonus and, if applicable, Performance Bonus. Non-pensionable earnings include Overtime Pay and Contract Pay. If you need more information, contact the Public Service Pension Centre (PSPC) at 1-800-561-7930 or visit http://www.tpsgc-pwgsc.gc.ca/pension.

Does an "85 point Factor" really exist?

No, your plan does not have a true “85 rule”. In order to retire before the age of 60 without penalty, you must be at least age 55 AND have completed 30 years of service.

What is medical retirement?

Medical retirement occurs when a member is unable to return to work because of total disability and retires due to medical reasons. In order to qualify for medical retirement, the member must be certified to be totally disabled by Health Canada. If the member qualifies for medical retirement the member is entitled to an immediate pension without reduction or penalty.

What should I do if I am forced to retire on medical grounds?

Medical retirement is a "last resort option". If you are on disability and are unable to return to work for medical reasons, and you receive a letter from the Employer requesting you to either i) return to work; ii) quit; or iii) take medical retirement, you should contact PIPSC immediately and talk to 1) an Employment Relations Officer (ERO) or 2) the Pension and Benefits Advisor.

How do survivor pensions work?

A survivor pension is paid to the spouse of the member if the member was either married or living in a conjugal relationship with the person/spouse prior to retiring. The surviving spouse receives 50% of the member's benefit.

Where can I get more information on CPP/QPP benefits?

More information on CPP/QPP is available respectively at:
http://www.servicecanada.gc.ca/eng/isp/pub/factsheets/retire.shtml and http://www.rrq.gouv.qc.ca/en/retraite/rrq/Pages/calcul_rente.aspx. You can also visit the National Association of Federal Retirees (FSNA) web site at: http://www.fsna.com/.

Potential Changes To Your Plan

I have heard that the government may change our pension plan from a Defined Benefit to a Defined Contribution plan, is this true?

The Institute has not heard anything directly from Treasury Board on this topic so it is difficult to answer that question. PIPSC does not believe that converting or changing the pension plan from a Defined Benefit to a Defined Contribution plan is in the best interest of the members.

Can the government take away the pension benefits that I have already earned?

Under the current legislation, no. However, the government can effect changes to existing legislation, as it did in the matter of the pensions surplus a decade ago. That said, Treasury Board President Stockwell Day has told the media that the government will not change the pensions or benefits of existing members. Therefore, the pensions of current Plan members appear to be safe. However, that doesn’t mean the government will not attack pensions in the next federal Budget. PIPSC continues to monitor this issue closely.

Can the government pay me less than I am entitled to?

No, under legislation the government must pay out the pension benefit you have earned.

Important Financial Considerations

What should I do if I am planning to retire within the next five years?

You should start preparing for your retirement by getting your financial information in order. It is recommended that you determine whether you are eligible for any "buy back" of pensionable service, update or verify your beneficiary and survivor information and confirm your current address. The Institute suggests that members contact the Public Service Pension Centre at 1-800-561-7930 or go to http://www.tpsgc-pwgsc.gc.ca/pension for more information and to make any required changes.

Can I buy back service?

Members who are interested in buying back service should contact the Public Service Pension Centre (PSPC). PSPC will verify whether you are eligible to buy back any service periods and will prepare a cost analysis for you. If you have any issues in contacting or dealing with the PSPC, please contact the Institute.

Should I buy back service?

This is a personal decision. If you decide to do so, it’s always better to buy back pensionable service early in your career when your earnings are lower, since the amount you have to pay is based on your salary ay that time. You should contact the Public Service Pension Centre (PSPC) at 1-800-561-7930 to discuss your specific situation. If you have any issues in contacting or dealing with the PSPC, please contact the Institute.

When is a Past Service Pension Adjustment (PSPA) triggered?

It is triggered when you buy back service from the Plan, or when the Employer retroactively improves pension benefits.

When can I start to receive CPP/QPP pension benefits?

You can begin CPP/QPP as early as age 60. For more information please click here for the CPP:
http://www.servicecanada.gc.ca/eng/isp/pub/factsheets/retire.shtml and here for the QPP:
http://www.rrq.gouv.qc.ca/en/retraite/rrq/Pages/calcul_rente.aspx.

Should I consider applying for early CPP/QPP pension benefits?

The Retirement Planning Institute, the organization that delivers retirement planning sessions to PIPSC members, believes that most members will benefit from receiving CPP early. Many factors come into play, however so before making your final decision, you are encouraged to review your personal circumstances with a financial services professional or to attend a retirement planning session sponsored by PIPSC.

Is CPP/QPP or pension income splitting worthwhile?

Income splitting is almost always beneficial, particularly in cases where one spouse has significantly higher income at retirement. CPP pension income may be split between spouses, but this requires the annuitant to complete an application with CPP and the monthly pension amount is actually shared between spouses. There are also income splitting provisions available to pensioners under the Income Tax Act (ITA). Using these provisions, you are required to decide on an annual basis when you file your tax return, and only certain types of income are eligible (CPP and OAS are excluded). The primary difference between the two approaches is that under the provisions of the ITA, there is no change to the pension that you or your spouse actually receive, but the advantage is obtained through lower marginal tax rates, and therefore through overall tax savings.

When I am retired, should I have my CPP/QPP pension taxed at the source?

The decision to have tax withheld at the source can only be made on an individual basis after taking into account all of your sources of retirement income. Consult a financial services professional before deciding what's right for you.

How much do I contribute into the PSSA pension?

Your contribution rate for 2010 is 5.5% up to the Year's Maximum Pensionable Earnings (YMPE) and 8.4% above that figure. Overall, members contribute approximately 33% to their pension and the Employer pays the other 67%. Employee contribution rates are scheduled to increase each year until 2013 until a 40/60% cost sharing is achieved. See our website for more information or visit http://www.rrq.gouv.qc.ca/en/retraite/rrq/Pages/calcul_rente.aspx for a table of the evolution of contribution rates in the years ahead.

What is the formula used to calculate my pension?

The formula is 2% multiplied by your years of pensionable service multiplied by your average salary for your 5 best consecutive years. Keep in mind that calculating your pension is more complicated than it appears. Members can refer to the "Your Pension Plan" booklet found on our website for more information and examples. Your annual statement also provides you with an estimate. If your annual statement does not provide all the information you require, contact your Compensation Advisor or the PSPC.

How much have I contributed to CPP/QPP?

PIPSC does not have access to this information. Please contact the CPP/QPP directly at http://www.servicecanada.gc.ca/eng/isp/pub/factsheets/retire.shtml or the QPP at: http://www.rrq.gouv.qc.ca/en/retraite/rrq/Pages/calcul_rente.aspx. The Institute encourages all members, especially those that will be retiring within the next 5 years, to ensure that their CPP/QPP information is correct and up to date.

Why is my pension clawed back at age 65?

Your pension is not clawed back, but at age 65 your pension becomes offset by CPP/QPP. Another way of looking at this is that your pension is coordinated with the CPP and QPP. This is standard practice in over 95% of Defined Benefit pension plans in Canada. Note that the "offset ratio" has recently been improved for our members. For more information please visit http://www.tbs-sct.gc.ca/pubs_pol/hrpubs/pensions/ypp1-eng.asp#Toc497204652 and scroll to the half-way point of the page to read the section on the coordination of benefits.

Should I leave the PSSA Plan before age 50 and transfer my pension into a locked-in RRSP?

The Retirement Planning Institute, the organization that delivers retirement planning sessions to PIPSC members, advises against it. Many factors come into play, however, so before making your final decision you are encouraged to discuss your situation with a financial services professional.

How Is PIPSC Defending its Members' Pensions and Benefits Rights?

When will retirement sessions be held in my area?

Retirement sessions are available through ServicePlus, the Institute's member benefits program. We are aware that these sessions are very popular and fill up quickly, and we are currently working to provide more of them in the future. Please check the PIPSC website for upcoming session dates and locations.

What is the status of our legal challenge on the pensions surplus issue?

The Ontario Court of Appeal heard the case from April 19 to 21, 2010 in Toronto and indicated it would announce its decision in the fall of 2010. Please visit the PIPSC website for the latest updates on this matter.


Publish Date: 19-JUL-2010 10:47 AM
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