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Frequently Asked Questions – Preparing to Retire from the Federal Public Service

Are you a public service employee who is eligible or will become eligible to retire within the next three or five years? How prepared are you for a healthy, stable and interesting retirement?

If you have not yet finalized your plans for life beyond the federal public service, or are just beginning to explore the options, the For Employees section has been developed to provide you with helpful information.

Or perhaps you are a manager who isn't sure how to discuss retirement with his or her employees, or who is looking for guidance to ensure a smooth transition in the workplace. The For Managers section has been designed with your needs in mind.

Finally, the Important Contacts is a summary list of organizations, phone numbers and addresses that you may find helpful.

Questions

Answers

For Employees

1. Where can I find information about my public service pension and benefits?

Visit the Pension and Benefits Web Portal where you can find accurate, timely, and relevant information about pension and group insurance benefits plans specifically written for active and retired federal public service pension plan members and their dependants or survivors.

2. I am thinking about retiring. Where do I start?

Your first step is to consult different documents and online service tools for information about your pension entitlements and benefits.

  • Your "Pension and Insurance Benefits Statement" outlines your pension entitlements and benefits coverage. It is provided to you at the beginning of the calendar year and is also accessible online via the Compensation Web Applications (CWA).
  • The Pension and Benefits Web Portal provides general information to help you better understand your pension entitlements and benefits.
  • You can estimate your pre- and post-tax pension income by using the CWA Pension Calculator.
  • You may also find the information package Preparing for Retirement helpful in making your retirement decision.

Once you have consulted these documents and have all the information you need, you can contact the Government of Canada Pension Centre (Pension Centre), which is responsible for administering all pension services, including providing pension estimates. You can contact the Pension Centre by phone, email, fax or mail. For contact information, please refer to the Important Contacts section at the end of this document.

3. How can I estimate my pension benefits?

If your department is registered to use the Compensation Web Applications (CWA), you will be able to estimate your pension benefits by using the Pension Calculator on the CWA website. Simply follow the enrolment instructions to access the Compensation Web Applications suite of online tools.

You can also refer to your most recent personal Pension and Insurance Benefits Statement, which provides a summary of your entitlements and their approximate value.

The Government of Canada Pension Centre (Pension Centre) is responsible for administering all pension services for plan members. This includes providing general pension information and estimates. When contacting the Pension Centre by phone, you should have your Personal Record Identifier (PRI) on hand. For contact information please refer to the Important Contacts section at the end of this document.

4. How is my pension calculated?

The major factors that will determine the amount of your pension benefit are your years of pensionable service, your age and your average pensionable salary. Consequently, the calculation varies depending on your situation.

For detailed information about the calculations, process, forms, application of other pension plans, and the impact on insurance benefits, please consult the Pension Entitlement Information Package.

5. I have work experience prior to being appointed to the public service. Can this prior work period be factored into my pensionable service?

You may be able to increase your pensionable service either by electing to buy back prior service or by requesting a pension transfer agreement. Depending on the type of service, there are various conditions that must be met, such as making the decision while you are still employed in the public service. There may also be income tax implications.

Increasing your pensionable service may increase your pension benefit. It may also provide you with the opportunity to reach the maximum threshold of 35 years pensionable service earlier.

Estimate the cost of buying back prior service and the impact on your pension benefits by logging into the Compensation Web Applications and then accessing the Service Buyback Estimator. Once you have obtained all the information you need, you can contact the Government of Canada Pension Centre, and staff will provide you with your options and administer any decision you make to proceed with a service buyback.

6. How does accepting an employment opportunity outside the federal public service affect my pension benefit?

It depends. If you accept employment outside the federal public service and are not yet eligible to receive a pension, you may be eligible to transfer all or part of your accrued pensionable service to another pension plan through a Pension Transfer Agreement. Additional information can be found by consulting the Pension Portability Package.

If you are eligible for a pension benefit, you may choose to receive it and to also pursue employment outside the federal public service. For information about income tax implications, you will want to consult the Canada Revenue Agency website.

7. What is a pension benefit option?

The pension benefit options are:

  • Transfer Value
  • Deferred Annuity
  • Annual Allowance
  • Immediate Annuity
  • Return of Contributions

Consult the glossary on the Pensions and Benefits Portal for explanations about the options.

8. How do I choose a pension benefit option?

To choose your pension option, you must complete a Pension Benefit Options Statement. When you have chosen a termination date, contact the Government of Canada Pension Centre, and you will be provided with a personalized Pension Benefit Options Statement outlining your pension choices.

More detailed information on the termination of employment process, required forms and impact on insurance benefits can be found in the Pension Entitlement Information Package.

9. Am I also eligible to receive a pension from the Canada or Québec pension plans?

You must apply to receive a pension from the Canada Pension Plan (CPP) or the Québec Pension Plan (QPP) because neither one starts automatically. It is advised that required applications for Canada Pension Plan or Québec Pension Plan be submitted at least six months prior to the desired commencement date of the benefit.

Canada Pension Plan

Normally, you are eligible to receive a Canada Pension Plan (CPP) retirement pension if you are:

  • at least 65 years old; or
  • between age 60 and 65, and you meet certain requirements.

Please note that changes to the CPP will be phased in starting in January 2012. For more details on the Canada Pension Plan, visit the Service Canada Website.

Québec Pension Plan

You can receive a retirement pension if you contributed to the Québec Pension Plan (QPP) and are at least 60 years of age. For more details, visit the Québec Pension Plan website.

10. I have decided to retire. How do I start the process?

First, you must submit your resignation letter to your manager for approval. The accepted resignation letter should then be sent to your compensation advisor. This should be done three months before your proposed retirement date, if possible.

The Government of Canada Pension Centre (Pension Centre) will provide you with a package outlining your pension benefits, any insurance coverage and related benefits upon cessation of your employment. Your compensation advisor will finalize your pay account, including payment of any severance pay to which you may be entitled.

For all the above pension-related matters, you may contact the Pension Centre. When contacting the Pension Centre by phone, you should have your Personal Record Identifier (PRI) on hand.

11. Should I seek independent financial advice and if yes, what should I look for?

You have access to full information about your pension calculations and benefits from the sources referred to on these pages. You may, however, wish to complement that information with independent financial advice based on your personal financial and family circumstances.

When looking for a financial advisor, be clear about the type of advice that you are seeking, such as:

  • How to manage your financial affairs.
  • How to choose between specific options.

Make sure the advisor is a specialist in the kind of advice you want.

  • Will the advisor benefit from your decision? How is he or she paid?

Shop around. If you get different answers to the same question, ask why.

Finally, consult your manager and/or HR advisor to get information about the type of support that may be available from your organization.

12. Once I retire, how long will it be before I can expect to receive my first pension payment?

The Government of Canada Pension Centre has service level standards in place for all services, including for receipt of a first payment. Once your documentation has been accurately completed and received by the pension centre, you can expect to receive a payment within 45 calendar days.

13. What happens to my health care coverage, once I retire? If I opt to continue, will my coverage be continuous, from my date of retirement or is there a gap?

As part of the required documentation that you will be submitting to the Government of Canada Pension Centre when you decide to retire, you will be asked whether you wish to continue or amend your health care coverage (and if yes, that you accept the associated deductions to cover the costs). Even though you will use the same certificate number, there may be a brief period whereby your existing benefit card is not yet recognized. All you need to do is keep your receipts for any eligible medical expenses and submit them once you have received your first pension payment.

14. I hear that people may experience long wait times when they call the Pension Centre? What should I expect?

The Government of Canada Pension Centre offers comprehensive counseling, advice and pension-related information to over 500,000 clients, most of which is conducted over the phone. An integrated voice response system will help identify and direct your call to available staff best able to respond to your enquiry. While the service standard for wait times is five minutes, in the past calls during peak periods have resulted in significantly longer wait times.

Public Works and Government Services Canada has recently undertaken steps to further streamline the processes, such that the majority of callers will not experience significant wait time before speaking to a person, and is looking at updating the web with up-to-date data on wait times, to assist in avoiding peak periods. Watch the Public Service Pension Portal for details.

15. What can I do to prepare myself for retirement?

Research has shown that transition to retirement is a challenging time in the life of an individual. You will want to have a plan that will carry you successfully and smoothly through the transition.

You may wish to do some research about planning for retirement and to attend one of the pre-retirement planning courses available through the Canada School of Public Service. Some private firms are also familiar with the public service pension system and offer courses. In addition to information about pensions and benefits, these courses typically offer information about planning for retirement more generally, including financial, lifestyle, legal and health considerations.

If you are an executive, the Canada School of Public Service offers the Executive Group Pre-Retirement Seminar, which has been designed with senior managers' needs in mind.

Finally, for some employees transitioning from a busy public service career may be challenging. Your Employee Assistance Program is there to help you. Consult the Employee Assistance Program website for more details.

16. I have been informed that my position may be declared surplus. I am within a few years of eligibility for a pension without penalty. Would my pension be affected if I retire now?

If you are covered by a Work Force Adjustment Agreement or Directive and you retire, you may be eligible for a waiver of the pension reduction if the deputy head or his or her delegate certifies that all of the following conditions are met:

  • You have not received a reasonable job offer (i.e. you are an "opting" employee).
  • You are between the age of 55 and 59 and have been employed in the public service for at least 10 years on the date you cease employment.
  • You have not received an educational allowance.

If you are an executive covered by the Directive on Career Transition for Executives, you must also meet the following conditions:

  • You have opted to leave the core public administration.
  • You must not have received a negotiated career transition agreement that included a lump- sum payment to offset your pension reduction.

17. I have been informed that my position may be declared surplus. I am eligible to retire with a pension without penalty, but I am not yet ready to leave the public service. Can I be forced to retire? Will I be given the same support as other employees?

You cannot be forced to retire. You will be subject to the same guidelines with respect to the applicable Work Force Adjustment Agreement or Directive or, in the case of an executive, the Directive on Career Transition for Executives.

18. Where can I find more information about my public service pension and benefits?

The Treasury Board of Canada Secretariat along with Public Works and Government Services Canada and other benefits plan administrators work together to inform you about the available options and entitlements you may have. More precisely, the Portal offers you an extensive list of detailed information about your pension (in alphabetical order):

  • Division of Pension Benefits Package provides general information on the division of pension benefits upon a marriage or a common-law relationship breakdown.
  • Federal Superannuates National Association operating as the National Association of Federal Retirees promotes the interests of retired federal employees.
  • Pension Entitlement Information Package includes detailed information related to options when leaving the federal public service.
  • Pension Portability Package provides general information regarding pension portability options under the public service pension plan.
  • Pensionfacts explains how the public service pension plan works.
  • Service Buyback Package provides general information on the buyback of prior service under the public service pension plan.
  • Statement Guides accompany your annual statement and are available online only. Select the version of the guide that has been identified on your annual statement.
  • Weighing Your Options provides information related to your options when leaving the public service.
  • Your Insurance Benefits at a Glance provides a summary of the Health, Dental, Disability and Life Insurance plans offered to active members.
  • Your Insurance Benefits in Detail provides a detailed description of the Health, Dental, Disability and Life Insurance plans offered to active members.
  • Your Pension at a Glance provides a summary of the public service pension plan.
  • Your Pension and Insurance Benefits - Guide for Executives (2010) explains the pension benefits and options described in Your Pension and Insurance Benefits Statement for Executives. It also provides you with information on your group insurance benefit plans.
  • Your Pension and Insurance Benefits Guide (2010) explains the pension benefits and options described in Your Pension and Insurance Benefits Statement. It also provides you with information on your group insurance benefit plans.
  • Your Pension Plan provides an in-depth summary of the major provisions of your public service pension plan.

For Managers

1. How should I approach retirement planning with individual employees?

For planning purposes, you will want to be fully aware of your employees' retirement plans. It will enable you to put in place a well-managed transition for both the workplace and individuals.

Some employees who are eligible to retire have chosen not to do so. There are a variety of different reasons for this. That said some employees may choose to retire if their current positions are declared surplus.

Keep in mind that the decision is the employee's to make. It should be recognized that for many it may be a challenging time in their life.

2. Can employees who are eligible to retire with a full pension or pension without penalty be asked to retire?

Employees cannot be asked to retire. Not all employees who are eligible to retire with a full or unreduced pension choose to do so, for a variety of personal reasons. They are under no obligation to disclose their reasons to you.

Some employees may wish to consider retirement as an option if their current positions are declared surplus. You can support employees in their decision making by ensuring that they have access to the information and tools available. (See also Q18, For Employees)

3. When is the best time to have a conversation with employees about their retirement plans?

You should be talking to employees about their retirement plans as a matter of course as part of your work force and succession planning.

Talent management and performance management discussions are opportunities to ask employees whether they have any plans, and to offer any information and support to help them in their decision making.

If you are not already aware of the retirement plans of your employees, you will want to arrange a discussion with them, as the information will help you assess your work force situation. It would also provide employees with an opportunity to signal their intentions to you, and for you to ensure that they have information available to them to help them in their decision making.

4. What if employees ask if they will likely be affected by work force adjustment?

The best approach is to avoid speculation or evasiveness. If your organization is undertaking changes or reviewing the way that work is performed, take the lead from your senior officials. They will be able to advise you when it's appropriate to have an informed discussion with your employees.

5. What options or alternatives are available for individuals approaching their last years of employment in the federal public service?

To facilitate the transition to retirement during the last years of an employee's career in the public service, a series of alternatives are available. The delegated manager may authorize a leave of absence from work for personal or other reasons, a pre-retirement transition leave, a pre-retirement special deployment (applicable to the Executive group only), or an Interchange Canada assignment.

Leave of Absence from the Public Service

Employees are entitled to various types of leave.

For employees outside of the Executive group, consult the relevant collective agreement for the applicable requirements.

For executives, the responsible deputy head may approve special leave without pay as a way to bridge an executive until he or she meets the criteria for eligibility to retire. For more details about leave benefits, executives should consult Appendix C of the Directive on Executive Compensation. Executives may also consult the departmental head of executive services and/or compensation advisor for more details.

Additional information about how an employee's pension and group insurance benefits may be affected can be found in Taking a Leave of Absence from the Public Service.

Pre-Retirement Transition Leave

Pre-retirement transition leave enables employees who are within two years of retirement to reduce the length of their workweek by up to 40 percent. The employee's pay is adjusted to reflect the shorter work week, but his or her pension and group insurance benefit coverage continues at pre-arranged levels. The Canada Pension Plan, Québec Pension Plan, and Employment Insurance premiums continue based on the reduced rate of pay.

Employees must agree to resign at the end of the pre-retirement transition leave period.

Employees may refer to the Employee Benefits site for an electronic calculation tool that will help them determine the financial impact of participating in the Pre-Retirement Transition Leave Program.

The Directive on Leave and Special Working Arrangements and Questions and Answers on Pre-retirement Transition Leave offer more details about this measure.

Pre-Retirement Special Deployment (EX group only)

Pre-retirement special deployments permit executives approaching retirement to apply their knowledge of the department's objectives, programs and procedures in a managerial or advisory role and to share their knowledge and experience to assist new executives.

A special deployment may be offered initially for a period of up to two years but can be extended by one year at the discretion of the responsible deputy head.

An executive who accepts a pre-retirement special deployment must submit, with the signed letter of offer, a signed letter of resignation that will take effect immediately after the special deployment ends.

For more details, consult the Appendix E of the Directive on Executive Compensation.

Interchange Canada Assignment

Interchange Canada promotes stronger ties between the federal public service and all other sectors, in Canada and internationally, by giving employees in one sector the opportunity to take on temporary assignments in another sector. These assignments can last up to three years.

Employees initiate an assignment by:

  • finding a host organization wishing to sponsor them; or
  • posting their resume on the Interchange Canada website.

6. I am concerned about the impact of retirements on the workplace, the loss of knowledge and experience, for example. How can I minimize the impact?

A lesson-learned from the mid-1990s is that the loss of experienced and skilled workers created an experience gap in the public service.

There are options for flexible work arrangements for individuals nearing retirement that can help you minimize the effect of retirements on the workplace, for example as part of a plan for ensuring that knowledge is retained and transferred.

For example, flexible work arrangements include:

  • part-time work while contributing to the pension plan;
  • special deployment (applicable to Executives only);
  • leave with income-averaging; and
  • pre-retirement transition leave.

These kinds of arrangements also support employees in their decisions about whether and when to retire, and in making the transition.

7. How do I decide to which individuals to offer a flexible working arrangement?

Your starting point is what your workplace needs are. Where is your organization most vulnerable to a loss of knowledge and skills? What is your plan for retaining and transferring knowledge?

From there, based on your employees' retirement plans and your workplace needs, you can determine to whom you would offer a flexible arrangement, and what kind of arrangement would be most suitable.

8. What if an employee would like to have a union representative present for a discussion about retirement planning?

An employee may certainly have a union representative present for a discussion about retirement planning.

The objective of conversations with employees about their retirement plans is to get a good understanding of their plans so that you can plan and manage, and possibly assist them in their decision making by ensuring they have access to the information they need.

You may also wish to have a departmental human resources advisor present.

Important Contacts

(in alphabetical order)