# Will the army match RRSP contributions in the full time forces.



## Cote (27 Jan 2007)

Hi,

I was starting a RRSP account and a couple people asked if the army would match contributions made. This got me thinking. Does anyone know if the army offers investment incentives for members, such as special army bonds, T bills ect... Also to answer their question and mine, will the army match RRSP contributions


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## aesop081 (27 Jan 2007)

recce pigeon said:
			
		

> Hi,
> 
> I was starting a RRSP account and a couple people asked if the army would match contributions made. This got me thinking. Does anyone know if the army offers investment incentives for members, such as special army bonds, T bills ect... Also to answer their question and mine, will the army match RRSP contributions



The military does not match RRSP contributions as CF members have a structured pension plan.


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## GO!!! (27 Jan 2007)

recce pigeon,

We have a faaaaar better plan than merely matching contributions.

First of all, it is a defined *benefit*, vice a defined *contribution* plan. This is inherently more generous, as the amount of money you will be paid is calculated as an average of your best 5 years pay, regardless of what you put into the plan. 

What you are talking about is a defined contribution plan, which means you know what you will put into it, you just have no idea what will come out.

We, as CF members pay 4.5% of our salary towards our pension. Our employer (DND) pays 17.5%. A merely matching RRSP would be a huge kick in the balls here, cutting our immediate benefit by 2/3, and the long term benefit by much more!

Finally, our pension is also indexed with the cost of inflation, as long as you are alive. That means that if (when) the cost of living rises say, 4% in a year, the value of your pension will also rise 4%, so the effect of inflation on you is, in effect, zero.

The CF,CCG,RCMP and a few police forces are the only ones who can claim a pension after 20-25 years, regardless of age. You cannot benefit from your RRSPs until you are 65, and most companies will not start paying you a pension before this time too.

There are no private sector pension plans like this any more, except as a part of executive pay/benefits packages, and the ones for our esteemed members of parliament. They are all being phased out.


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## Cote (28 Jan 2007)

But in order to be elligable for a CF pention one must be in for 20+? years. Anyway, if your not in for that long then you don't get the pension am I wrong?


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## xo31@711ret (28 Jan 2007)

Yes, 25 years now, if you pull the plug before hand, you (?used to) get return of contributions. Now, from what I've heard things have changed a bit (I retired last year with just over 24 years under the 'old' plan: pensioned of at 40% with 20 years). I'm ex-infantry and retired as a med tech; maybe there are some adm types on board who definitely know a hell of a lot more and are the prefessionals in reference to all the pension type changes, CANFORGENS etc that were happening just before I left.

-gerry


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## Meridian (28 Jan 2007)

When I left after a year, I got my contributions back in a lump sum.  But thats only my specific case, I'm sure there are tons of rules, as pensions always tend to have.


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## aesop081 (28 Jan 2007)

If you get out before pension time, you get return of contribution

For those of us on the 20 year plan, you get out after 20...you get 40%

For those on the new 25 year plan...you get out after 25, you get 50%



			
				recce pigeon said:
			
		

> But in order to be elligable for a CF pention one must be in for 20+? years. Anyway, if your not in for that long then you don't get the pension am I wrong?



You are correct.....Why would you get a pension when you didnt work for it ?


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## midget-boyd91 (28 Jan 2007)

But for those who have been in for less than that amount of time and have been injured/wounded, along with what they recieve for being wounded, would they now be eligible for the pension?

90


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## Wookilar (28 Jan 2007)

As a couple of others have stated, the pension plans for members just getting in has changed. There are some differences now.

On the old 20-year plan (29 for most officers), you could draw a pension after 10-years. Less than that you got it back in a lump sum. 2%/year with penalties applying if you do not finish your contract.

Under the new contract (IE 25), you cannot draw on your pension until you are 55, no matter how many years you have. Still 2%/year, but potentially more years. For less years service, there are now a couple of options open, not just lump sum. I don't remember the details exactly. If no one else fills in the blanks tomorrow, I will on Monday once I get to work and get the right info.


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## retiredgrunt45 (28 Jan 2007)

Here is the site that will tell you anything you need to know about the CFSA. I'd advise everyone to read it, especially if your coming up for release or retirement. 

http://www.admfincs.forces.gc.ca/pension/intro_e.asp

 Here is the SISIP site, it has information on what you will be eligable for if your injured in the line of duty. It also has links to the VAC and DND. 

http://sisip.ca/en/index.asp


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## George Wallace (28 Jan 2007)

midget-boyd91 said:
			
		

> But for those who have been in for less than that amount of time and have been injured/wounded, along with what they recieve for being wounded, would they now be eligible for the pension?



No.  That is a different Pension.

They may get a Medical Pension, which is administered by DVA.  They may even get that Medical Pension and still be serving.


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## dapaterson (28 Jan 2007)

A Reg F member medically released with a minimum of 10 years (old plan) or 2 years (new plan) will be eligible for immediate benefits under the CFSA.

Under the new CFSA a release with less than 2 years of service will see a return of contributions; more than 2 years but less than the required length of time for an immediate annuity will see a transfer value calculated and put into a locked RRSP.

There are significant changes to the rules for everyone; the CF Pension Modernization Project seems to think that posting info to a website constitutes informing the CF as a whole.  I'd strongly recommend that all members, Regular Force and Reserve, check out their site at http://www.forces.gc.ca/dgcb/cfpmp/engraph/home_e.asp?sidesection=5 to learn more about the changes on the way.


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## geo (28 Jan 2007)

excellent point DAP!

+1


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## GO!!! (28 Jan 2007)

> Pension Benefits and Options
> Q9:    How will the changes affect the pension situation of serving Regular Force personnel?
> 
> A9:    Basically, the changes will improve the pension situation of all CF members. Once modernization is fully implemented:
> ...



The underlined quote was what I was most concerned about! Still on track to retire in 2024!


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## 284_226 (28 Jan 2007)

GO!!! said:
			
		

> The underlined quote was what I was most concerned about! Still on track to retire in 2024!



If you've got 7 years service, would you not already have been on your IE when the changes came about - meaning that you signed an IE20, not an IE25?


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## GO!!! (28 Jan 2007)

284_226 said:
			
		

> If you've got 7 years service, would you not already have been on your IE when the changes came about - meaning that you signed an IE20, not an IE25?



Nope. The contract that was offered to me was the IE25.

I'm not too concerned about it, according to the last few questions in the Q+A portion of the website, and the pension "expert" who came to the Bn, those of us who were signed to a 25 yr as opposed to a 20 yr will likely be able to get out at the 20 yr mark anyway, because the 25 yr IE was not yet in force when we signed them, meaning that for a few people with about as much seniority as me, we literally can choose which contract we will have.


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## 284_226 (28 Jan 2007)

GO!!! said:
			
		

> Nope. The contract that was offered to me was the IE25.
> 
> I'm not too concerned about it, according to the last few questions in the Q+A portion of the website, and the pension "expert" who came to the Bn, those of us who were signed to a 25 yr as opposed to a 20 yr will likely be able to get out at the 20 yr mark anyway, because the 25 yr IE was not yet in force when we signed them, meaning that for a few people with about as much seniority as me, we literally can choose which contract we will have.



Ah, gotcha.  I found a reference on the DND website that says the rules changed on 1 May 05, so if you joined in Jan-Apr 99, you should have been offered the IE20, and anyone who joined later than 1 May 99 and hadn't yet already signed an IE20 would have automatically been offered the IE25.

About you being able to choose between IE20 and IE25, that makes perfect sense.  It'd be hard for the CF to enforce a contract under terms that didn't yet exist as of the date of signing!


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## x-zipperhead (6 Feb 2007)

Another thing to keep in mind that hasn't been brought up yet; if you are "grandfathered" on the old IE 20 and you choose to accept IPS or a CE, then your new TOS automatically puts you on the new plan.  So if you hit the 20 year mark and you are still relatively young (say 40ish) you can a) take the immediate 40% or b) sign your new TOS thereby accepting the new plan and will not receive a penny until you are 55.

So, if you sign a new TOS and a couple of years later you decide to get out, you have just screwed yourself out of 10-15 years of receiving benefits.  This wouldn't have been the case on the old plan.    I thought by being "grandfathered" I was on the old plan for the rest of my career.  Not so I have learned.  We are only "grandfathered" to the end of our current TOS (IE 20 in my case).  Not so much of a complaint as just something to keep in the back of the brain housing group, for planning that retirement.

If I have this wrong I would be delighted to be corrected.


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## dapaterson (6 Feb 2007)

x-zipperhead said:
			
		

> So if you hit the 20 year mark and you are still relatively young (say 40ish) you can a) take the immediate 40% or b) sign your new TOS thereby accepting the new plan and will not receive a penny until you are 55.
> 
> If I have this wrong I would be delighted to be corrected.



Delighted to correct you 

See example 4 at:

http://hr3.ottawa-hull.mil.ca/dgcb/cfpmp/engraph/faq_examples_e.asp?sidesection=5

Or, from the FAQ, 


> A member will be entitled to an immediate annuity under the following conditions:
> 25+ years of paid CF service,
> age 55+ with 30 or more years of pensionable service,
> age 60+ with 2 or more years of pensionable service,
> ...



Note that "paid service" should really read "paid full-time service"; "pensionable service" includes part-time years.


And please also note that my comment above is in error; a member released as disabled requries a minimum of 10 years pensionable service to receive an immediate annuity.


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## George Wallace (6 Feb 2007)

x-zipperhead said:
			
		

> Another thing to keep in mind that hasn't been brought up yet; if you are "grandfathered" on the old IE 20 and you choose to accept IPS or a CE, then your new TOS automatically puts you on the new plan.  So if you hit the 20 year mark and you are still relatively young (say 40ish) you can a) take the immediate 40% or b) sign your new TOS thereby accepting the new plan and will not receive a penny until you are 55.



Now REMEMBER, under to 'old plan' it WAS NOT simply 20 years of Service.  It was the 20/40 plan.  You did 20 years of Service, or served until you were 40, whichever came last.  If you joined when you were 18, you would have had the option to serve 22 years under that old plan.


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## x-zipperhead (6 Feb 2007)

George,

Good point, I often forget that because I joined at age 21.

DAP,

I am at home and can't access your link but looking at the excerpt you provide I wonder where an IE20 member falls in there.

"A member will be entitled to an immediate annuity under the following conditions: 
25+ years of paid CF service, "

I assume this applies to an IE25 

A member on an IE20 would receive this immediate annuity after 20 years (assuming they had already reached age 40). So I can see doing your IE 20 and converting to a CE of up to 5 years would probably put you on a IE25 with an immediate annuity.  However,  my understanding was that once you convert to IPS, the following applies; 

"age 55+ with 30 or more years of pensionable service,"

Is there some grey area in between the IE20 old plan and IE25 new plan, even if one signs their IPS, that I am overlooking?

Again I want to be wrong here! ;D


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## dapaterson (6 Feb 2007)

x-zipperhead:  Glad to be showing you wrong again.

The new pension regieme explicitly delinks TOS and pension eligibility.  Year of full-time service and years of pensionable service are now the determinants, not IE,IPS, CE or CBEPBS (Variable Basic Extended Period of Bureaucratic Service).

Sorry for the intranet link; how about this one instead (FAQ)

http://www.forces.gc.ca/dgcb/cfpmp/engraph/faq_e.asp?sidesection=5

or this example:

http://www.forces.gc.ca/dgcb/cfpmp/engraph/faq_examples_e.asp?sidesection=5#example4

Hope these clarify things a bit more.


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## x-zipperhead (6 Feb 2007)

Thanks DAP.  I do appreciate being shown I'm wrong again in this case.   

Thanks for the links.


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## 284_226 (6 Feb 2007)

Something doesn't sound quite right here, from what I'm reading - or maybe I'm just misreading it and saying the same thing in a different way.

From what I saw the younger fellas I work with go through, this is how it worked.  I won't get into the officer side of things because I don't know a lot about it, nor do I have much interest in looking it up.

If a NCM had *not* signed an IE20 prior to the implementation date of the new pension plan (1 May 05), then the member was offered an IE25.

If a NCM had signed an IE20 prior to the implementation date of the new pension plan, then the terms of that IE20 were honoured.  The member could be offered/accept a CE or IPS at the 1st and 2nd look points in their career, but it would *not* affect their right to an immediate annuity based on the 20 years of service they completed under the IE20.


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## 284_226 (6 Feb 2007)

George Wallace said:
			
		

> Now REMEMBER, under to 'old plan' it WAS NOT simply 20 years of Service.  It was the 20/40 plan.  You did 20 years of Service, or served until you were 40, whichever came last.  If you joined when you were 18, you would have had the option to serve 22 years under that old plan.



That's actually the 'old old plan', George.  I joined in 1985, and the 20/40 was offered to people before I joined.  I joined under ORCDP, which I think was the successor to the 20/40 plan.


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## x-zipperhead (6 Feb 2007)

284_226 said:
			
		

> If a NCM had *not* signed an IE20 prior to the implementation date of the new pension plan (1 May 05), then the member was offered an IE25.



This is correct I beleive.  BTW, I don't think there is any difference between officers and NCMs, it is the same plan - CFSA



			
				284_226 said:
			
		

> If a NCM had signed an IE20 prior to the implementation date of the new pension plan, then the terms of that IE20 were honoured.



This is correct but they must release at the end of the IE 20, according to Question 29 in the FAQ's on the first link dapaterson provided



			
				284_226 said:
			
		

> The member could be offered/accept a CE or IPS at the 1st and 2nd look points in their career, but it would *not* affect their right to an immediate annuity based on the 20 years of service they completed under the IE20.



 The way I understand it they may finish their IE20 and release and receive their immediate unreduced benefit.  If they don't release then the IE20 they were serving under is out the window, however, it is a moot point.  As dapaterson pointed out pension benefits are no longer tied to TOS under the new plan.  Under the new plan you are entitled to an immediate unreduced pension at 25 years or more of service anyway.  The answer to question 9 in FAQ's of that same link clears it up quite well.


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