Your Online Pension and Insurance Benefits - Statement for Executives (2014)
Part I—Basic data for the calculation of your pension benefits
1. Your estimated pension benefits are calculated as of the date indicated on your statement
The information in Your Pension and Insurance Benefits: Statement for Executives was extracted from your pay and pension records as they stood on the date shown on your statement. The amounts shown on your statement are based only on your pensionable service and on your average salary for the five consecutive years of your highest paid service. It provides amounts only for those benefit options for which you have qualified as of the date of your statement.
These amounts will change with any additional service or salary increase after this date. If you have to make a decision in the near future concerning your pension options, please contact the Pension Centre in order to obtain the most up-to-date information.
2. Service and average salary for purposes of the pension plan
- Current service
Is the period of service during which you contribute daily to the pension plan to a maximum of 35 years. It includes previous periods of employment in the public service as a contributor under the PSSA for which no return of contributions was paid.
Note: You stop contributing to the pension plan on January 1 following the year you reach age 71. If you are turning 71, please contact the Pension Centre for further information.
- Transferred service
Means any period of service transferred from another employer's pension plan that has been added to your credit under the public service pension plan. This is generally done through a pension transfer agreement between the Government of Canada and eligible employers. The transferred service could also include periods of service with the Canadian Forces or the Royal Canadian Mounted Police or as a Member of Parliament.
- Service buyback (elective service)
Refers to any period of employment, either in the public service or with another employer that occurred before your most recent participation in the public service pension plan and has been purchased in order to count elective service toward your pension. It may include periods of leave without pay that you have elected to count under the public service pension plan as well as service as a member of the Canadian Forces or the Royal Canadian Mounted Police.
If your service buyback request has been confirmed, your statement will show the period of prior service that will be added to your pensionable service and the Request status field will show "Approved." When you fill out a request to purchase prior service, your payments will begin even though your service buyback has not yet been confirmed and your statement will show "Pending" in the Request status field.
A Service Buyback Estimator tool is available online; it enables you to estimate the cost of buying back prior service (elective service) and to compare your pension benefits with and without the service buyback.
- Total pensionable service
Means the years (complete or partial) to your credit as of the date of your statement. It includes periods of transferred service and any periods of elected service regardless of whether or not you have paid fully for that service. For purposes of determining your pensionable service, each year of part-time service counts as one year of pensionable service.
Note: The maximum period of pensionable service that may be used to calculate your pension is 35 years. Once you reach the maximum of 35 years of pensionable service, you are only required to contribute 1 per cent of your salary for indexing. Maximum service includes service to your credit under the Canadian Forces and the Royal Canadian Mounted Police pension plans.
- Average salary
Is based on your salary during the five consecutive years of your highest paid pensionable service. It includes any salary you earned after completing 35 years of service up to age 71, if that salary is the highest.
For the purposes of the public service pension plan, salary is defined as the basic pay received by a person for the performance of the regular duties of a position. It does not include special remuneration, although certain allowances, such as performance pay, may be considered as forming part of a person's basic pay. Contact the Pension Centre for further details.
If your salary exceeds $155,000 in 2014, then a portion of your pension contributions and eventual pension benefits will be subject to a Retirement Compensation Arrangement (RCA).
The Income Tax Act (ITA) limits tax-sheltered pension contributions and the payment of pension benefits for registered pension plans, like the public service pension plan. The Retirement Compensation Arrangements Regulations, No. 1 (RCA No. 1) were established to allow the accumulation and payment of benefits that are above the limits allowed under the ITA.
There is a maximum salary for which contributions can be made under the public service pension plan. It is referred to as the maximum contributory threshold and it increases annually. For the 2014 year, the maximum contributory threshold is $155,000. This means that employees whose annual salary is in excess of $155,000 will contribute to the public service pension plan for the portion of their salary that is below the limit and to the RCA No. 1 for the portion of their salary that is above the limit.
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