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The Co-ordination of the Public Service Pension Plan with the Canada Pension Plan or Quebec Pension Plan
Part III – Early Public Service Pension (i.e. an annual allowance)
If you retire before you reach age 60 (unless you are at least 55 years of age and have 30 or more years of pensionable service), you may choose an annual allowance.
An annual allowance is a permanently reduced pension payable to contributors who are at least 50 years of age with two (2) or more years of pensionable service and who retire before age 60, the normal retirement age for the Public Service pension plan.
Your early Public Service pension is reduced to take into account the fact that you are likely to receive this pension for a longer period than if you had waited to receive an unreduced pension at age 60 (or from age 55 if you have 30 or more years of pensionable service).
Table 3 –Early Public Service pension before age 65
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In this example, Leslie has left the Public Service at 55 years old in 2008, with a "best-five" average salary of $60,000 and 27 years of pensionable service. Since Leslie has at least 25 years of pensionable service, his pension is reduced by the greater of the following amounts: five percent for every year that he is younger than age 55 OR five percent for every year that his pensionable service is less than 30 years. Leslie has already reached age 55, but is still three years away from his 30 years of pensionable service; therefore his reduction is 15 per cent of his Public Service pension at age 60. (Please remember that Leslie's Public Service pension at age 60 was previously calculated to be $32,400.) This means that Leslie's reduction equals $4,860 (15 percent x $32,400). Thus, Leslie's early Public Service pension (i.e. annual allowance) payable from age 55 is $27,540 ($32,400 - $4,860). |
At age 65 (or earlier if a disability pension is paid by the CPP/QPP), your early Public Service pension (i.e. annual allowance) is reduced to account for the co-ordination with the CPP/QPP the same way the other Public Service retirement pensions would be. Your early Public Service pension (i.e. annual allowance) at age 65 is reduced by applying the following formula:
|
Early Public Service pension |
– |
Public Service reduction at age 65 |
= |
Early Public Service pension |
Table 4 – Early PSPP pension at age 65
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Leslie's early Public Service pension |
– |
Leslie's |
= |
Early Public Service pension |
Leslie's early Public Service pension (i.e., annual allowance) at age 65 will equal $20,375 (taking into account the reduction factor of 0.625% when Leslie will reach age 65 in 2018).
Part IV–Early or Delayed CPP/QPP Retirement Pension
Under the terms of the CPP/QPP, you may choose to either:
- claim your CPP/QPP pension as early as age 60; or
- delay drawing your CPP/QPP pension until you reach age 70.
Normally, your CPP/QPP retirement pension starts the month after your 65th birthday. This pension is smaller if you begin receiving it before age 65 and larger if you take it after.
(For more information on CPP/QPP retirement benefits, please visit the CPP/QPP Web sites or contact the CPP or QPP at the toll-free telephone numbers provided at the end of this document.)
Because the Public Service is a separate plan, your Public Service pension will not be reduced until you have reached age 65, even if you choose to claim an early CPP/QPP retirement pension between age 60 and 65, except in the case of disability. Please note also that, if you choose to delay the receipt of your CPP/QPP retirement pension after age 65, your Public Service pension will still be reduced at age 65.
Conclusion
The information provided in this document has focussed on the impact of the co-ordination between the Public Service pension plan and the CPP/QPP. During your career as a federal public service employee, you may have to make decisions that will affect your eventual benefits under the Public Service pension plan. We hope that, by carefully studying this information, you will be able to better understand this provision in your plan and make sound decisions.
Although this information applies to the great majority of employees, it isn't possible to cover every circumstance. If you feel that your situation has not been covered, or if you wish to confirm whether a particular provision does or does not apply to you, you should contact the following officials:
- if you are a current contributor, you may contact your departmental compensation office or the Public Works and Government Services Canada (PWGSC) Call Centre at the toll‑free telephone number provided in the List of Useful Links and Telephone Numbers; or
- if you are a retired plan member or the survivor of a Public Service pension plan member, please contact the PWGSC Call Centre.
Questions and Answers
What have been the contribution rates to the Public Service pension plan and to the CPP/QPP since 2004?
Your contribution rates over the last five years are shown in the following table:
Employee Contribution Rates for the Years 2004–08Year
Public Service pension plan Contributions on Salary Above the YMPE
Public Service pension plan Contributions on Salary Below the YMPE
CPP/QPP Contributions on Earnings up to the YMPE
2004
7.5%
4%
4.95%
2005
7.5%
4%
4.95%
2006
7.8%
4.3%
4.95%
2007
8.1%
4.6%
4.95%
2008
8.4%
4.9%
4.95%
To obtain the Public Service pension plan contribution rates for future years, please consult the Contributions Rate Projections.Where can you obtain more information on your PSPP benefits?
Public Service pension plan benefits
If you are a current contributor, information on your future Public Service pension is provided to you every year through Your Pension and Benefits Statement. If you are a pensioner, please contact the PWGSC Call Centre mentioned in the attached list. You may also estimate your future Public Service pension by using the Pension Benefits Calculator. (Additional information may be found by visiting the Compensation Sector Web site provided in the List of Useful Links and Telephone Numbers).
Where can you obtain more information on your CPP/QPP contributions?
CPP/QPP benefits
Information on your CPP/QPP contributions and estimated benefits are provided to you through your most recent CPP Statement of Contributions or QPP Participation Statement. (Additional information on these statements can be found by visiting the CPP or the QPP Web sites or by calling the toll-free number provided in the List of Useful Links and Telephone Numbers.)
List of Useful Links and Telephone Numbers
Acts and Regulations
The Department of Justice Canada provides legislative material, notably the Public Service Superannuation Act and its regulations (the Public Service Superannuation Regulations), the Supplementary Retirement Benefits Act, the Special Retirement Arrangements Act and its regulations (the Retirement Compensation Arrangement Regulations, No. 1 and No. 2), and the Pension Benefits Division Act and its regulations (the Pension Benefits Division Regulations).
Web Portal Your Public Service Pension and Benefits
This site provides information, tools and services to active and retired federal public service pension and benefits plan members.
http://pensionandbenefits.gc.ca/home-e.html
Canada Pension Plan and Old Age Security
The links to the Canada Pension Plan and Old Age Security are found on the main page of the Social Development Canada Web site.
http://www.hrsdc.gc.ca/en/home.shtml
Compensation Sector Web Site
Pension Benefits Calculator and Service Buyback Estimator
This Web site makes tools available to Public Service Plan members that enable them to estimate the value of their future pension
benefits (Pension Benefits Calculator) and the cost of buying back prior pensionable service (Service Buyback Estimator).
http://www.pwgsc.gc.ca/compensation/
Quebec Pension Plan
This site provides information on the Quebec Pension Plan and the benefits available to plan contributors. (Search the Quebec Pension Plan Web site for specific information on this plan.)
Your Pension Plan
This is a brochure published by the Treasury Board of Canada Secretariat that describes the major terms of your pension plan, which is governed by the Public Service Superannuation Act (PSSA). (See under Employees/Pensions and Benefits/Pensions/Public Service Pension Plan.)
http://publiservice.tbs-sct.gc.ca
PWGSC Call Centre (toll-free)
for active and retired Public Service pension plan members
1 800 883-1411
for current executives of the Public Service of Canada
1 888 742-1300
Canada Pension Plan (toll-free)
1 800 277-9914 for service in English
1 800 277-9915 for service in French
1 800 255-4786 if you use a TTY device
Quebec Pension Plan (toll-free)
1 800 463-5185
1 800 603-3540 if you use a TTY device
1The AMPE is the average of the YMPE (Year's Maximum Pensionable Earnings) for the year of your retirement and the four preceding years. The YMPE and the AMPE are determined in accordance with the provisions of the CPP/QPP. If you ceased to be employed in the Public Service in 2008, the AMPE will be $42,460.
