Pension Contribution Rates

Current Employee Contribution Rates and Approved Increases to 2012

The 2011 contribution rate for active members of the public service pension plan, the Canadian Forces-Regular Force pension plan, and the Royal Canadian Mounted Police pension plan is 5.8% on pensionable earnings up to $48,300 and 8.4% on pensionable earnings above $48,300. The current (2011) maximum pensionable earnings covered by the Canada Pension Plan (CPP)/Quebec Pension Plan (QPP)^[1] is $48,300. This amount is indexed every year according to the increase in the average industrial wage of Canadian workers.

The following table sets out plan member contribution rates that will apply to the public service pension plan in 2012:

Contribution Rates for 2012

Description	2012
On earnings up to maximum covered by the Canada/Quebec Pension Plan	6.2%
On any earnings over the maximum covered by the Canada/Quebec Pension Plan	8.6%

Employer/Employee Contribution Rates

Both the employer and the employees have always provided contributions to the federal public sector pension plans.

In 2005, Treasury Board set the contribution rates for the public service, the Canadian Forces-Regular Force and the Royal Canadian Mounted Police pension plans.  Since that time, employee contribution rates have gradually been increased to better align member contributions with the cost of plan benefits and to reflect the Government of Canada’s movement towards the balanced cost-sharing ratios that were announced in 2005.

To ensure that the Government of Canada’s objective of balanced cost sharing is met, there has been a re-calibration to the contribution rates for 2012 resulting in a slight increase to contribution rates.

For 2012, member contribution rates on pensionable earnings up to the maximum covered by the Canada/Quebec Pension Plan, which was previously set at 6.1%, will increase by one tenth of one percent (0.1%) to 6.2%. For earnings over the maximum covered by the Canada/Quebec Pension Plan, the increase is 0.2%, from the previously set 8.4% to 8.6%.

It should be noted that the Public Service Superannuation Act authorizes the Treasury Board to determine member contribution rates with the provision that members would not pay more than 40% of the current service cost of the public service pension plan. In addition, any increase in member contribution rates in respect of any portion of salary cannot exceed 0.4% of salary in any one year.  The Canadian Forces and the Royal Canadian Mounted Police Superannuation Acts stipulate that rates under these pension plans cannot exceed those set for the Public Service.

For more details about the public service pension plan, please refer to Your Pension Plan.

Additional information on The Co-ordination of the Public Service Pension Plan with the Canada Pension Plan or Quebec Pension Plan is available on the Treasury Board Secretariat Web site.

[1] The maximum pensionable earnings covered by the CPP/QPP for 2011 is $48,300.