# Reserve Force Retirement Gratuity



## McInnes (25 Aug 2003)

<div align="center"><u>Retirement Gratuity</u></div align> 

As a way of rewarding long service with the Reserves, there is a one-time gratuity payable on retirement from the Reserves after 20 or more years of service. (Personnel retiring after 10-20 yearsâ€™ service will receive half the normal amount.) Simplified, it is calculated on the basis of seven daysâ€™ pay (at the time of retirement) times the number of full years that the member has served. Some examples of this benefit are as follow (based on April 2003 pay rates): 

A Corporal retiring after 20 yearsâ€™ service will receive $15,422.

A Warrant Officer retiring after 25 yearsâ€™ service will receive $24,206.

A Captain retiring after 30 yearsâ€™ service will receive $38,564.

This benefit is taxable unless rolled into an RRSP.


<div align="center"><u>Others</u></div align>
A number of other allowances and benefits are also available, including medical, dental and disability insurance and an upcoming pension plan for long-term members.


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## Griswald DME (19 Feb 2005)

I have a large chunk of cash coming from the Reserve Gratuity.  I'm CTÃƒÂ­ng to Reg. Force and was advised to place it into an RRSP for the time being, then transfer it over to a pension buy back.  HOWEVER I was told by the Pensions Corp. that I have to be careful what I put it into (within the RRSP) because it has to be something that is allowed to be transferred direct into the pension buy back (or else I'll get taxed on it for withdrawing it, which I don't want, even though I realize I'd get the tax back at the end of the year).

Anyone here been in the same situation?  Where did you go for advice?  I'd appreciate some heads up, I realize SISIP may be able to help but I've dealt with them from a distance, which is the case for me where I am currently and it was a bloody pain in the arse.  I'm looking more for some online docs I can read up on, or some advice from others who have been thru the same ordeal as I am going thru with the pension and RRSP thing.

Thanks very much,

DME


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## Gunner (19 Feb 2005)

RRSP is the best place for it in the short term (make sure you have invested it conservatively).  I'm not sure why the Pension Corp told you that.  I suppose it is possible that you RFRG will be more money than what you are eligible to buy back.  

http://www.admfincs.forces.gc.ca/admfincs/subjects/daod/5001/1_e.asp

DAOD on RFRG.  

http://www.admfincs.forces.gc.ca/pension/handbook_e.asp?sel=null#toc_Part_I

Buying into the CFSA, costs, etc.

You may just want your orderly room (or yourself) to contact DAPPP directly.

Hope this helps.


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## Griswald DME (19 Feb 2005)

Hi Gunner,

Thanks for the info.  Great links, I'm going to read over them today and from what I can see briefly, they will give me a lot of information.  I was mistaken, it was the DAPPP I spoke with, not the Pension Corp.  The lady I spoke with answered my questions, but so vaguely it seemed like she just wanted to get me off the phone - kinda weird.  Maybe I'll read over the documents you sent and then give them another call, maybe I just caught her on a bad day.

Thanks again,

DME


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## Horse_Soldier (19 Feb 2005)

Gentlemen, I am the individual who designed and implemented the RFRG when I was working at NDHQ/DPSP.  The RFRG is considered a severance payment under tax rules, not a pension payment even though some of the brass marketed this benefit as a "pension replacement".  As a severance payment, there are limits to what you can roll over tax free into an RRSP.  You can roll-over $2,000 per year for each year of service prior to January 1, 1996.  You can also roll-over whatever amount would fill the RRSP room you have for the current and past seven years - for this latter case, you will require a letter from CRA stating the room you have available.  Anything beyond that is considered taxable income and will be treated as such.

As far as transferring from an RRSP to buy back elective service, this is a very simple process and usage of the correct CRA forms will make it a tax-free event, provided the annual limits are respected.  I would suggest that after you move the money into an RRSP, you sit down with a financial advisor of whatever bank/firm you used to buy the RRSP to calculate what the best buy-back schedule would be.  That being said, elective service bought back is often such a small monthly deduction on your pay, that it might be financially more advantageous to keep the RFRG proceeds in an RRSP.  Once again, you would have to sit down with a financial advisor and do the math.


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## neutmiller (30 Mar 2010)

Can someone please clarify to me how the reserve pension plan works? It says if you have more than 10 years you get 3.5 days and if you have more than 20 days you get 7 days? I am puzzled on what this means. Can anyone clarify? Thanks....  


_edit to clarify title_


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## Fishbone Jones (30 Mar 2010)

That's not the pension. That's the gratuity.


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## dapaterson (30 Mar 2010)

You are referring to the Reserve Force Retirement Gratuity (RFRG).

Unless it is for medical or force strucutre downsizing reasons, it is payable on release as 3.5 days of pay per year served, if you have more than ten but less than twenty years served, and as 7 days of pay per year served if you have twenty or more years served (to a limit of210 days of pay).

This is a one-time payment, different from the pension payments made under the CFSA part I.1 (for part-time reservists) and part I (for long-serving full-time Reservists and for Regular Force members).


The actual calculation for time served is a bit more complex:

All time enrolled up to and including 28 Feb 2007 is counted as one for one - that is, one day enrolled (and not NES or on ED&T for other than MATA/PATA) counts as a day served.

After that date, days are only counted when you have recorded attendance; class B and C days are counted as one day each; class A days are counted as 1.4 days each (to account for weekends). 

The total of those two numbers determines "how many years" you multiply by 3.5 or 7 days; the eligibility thresholds for 3.5 and 7 days are based on enrolled time (less, of course, NES and non-MATA/PATA ED&T).

There is a CBI that provides the details.


For lots of information on Reserve Pensions, see: 
http://forums.army.ca/forums/threads/28418.930/topicseen.html


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## Tetragrammaton (31 Mar 2010)

There seems to be this general notion that the gratuity disappeared now that the pension is in place.

I can confirm that members releasing from the reserve, if they have the qualifying periods of service, get both.


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## SuperTrooper (13 Apr 2010)

Hello

Well it's time to get out as I have no more time to give to the reserves.
I just want to get a better idea about gratuity before I walk into the ROR.
If memory serves me correct, 10 yrs at rank you get % amount per year, 20 yrs at rank you get % per year.
My question is...what is the percentage?

or

have things changed?

Thanks


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## kratz (13 Apr 2010)

The RFRG is:
50% for between 10 years - 20 years.
100% for over 20 years.

It also depends on your release item. 
If you release 4c, the above applies. 
If your release is 3(medical) or CRA then it is 100%.


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## dapaterson (13 Apr 2010)

CBI 204.54 provides the detailed information on the calculation of the RFRG.

See:

http://www.cmp-cpm.forces.gc.ca/dgcb-dgras/pub/cbi-dra/204-eng.asp


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## justmyalias (13 Apr 2010)

Aquilus said:
			
		

> <div align="center"><u>Retirement Gratuity</u></div align>
> .... times the number of full years that the member has served....



Is that consecutive only, or cumulative?
EX:
In 10years you've worked throughout, a total of 7 'full-time class B/C'...or?

What if you worked full time the first 7years, and only worked part-time the remaining 3yrs...do you get shafted, or do you get the benefit 'times' those 7 first years-but at your most senior rate of pay?

EDIT:  Upon reflection, it's probably irrelevant when those full-time were eh?  Rather, simply, you 'served 7 full-time years' and so it'd be times 7?


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## dapaterson (13 Apr 2010)

justmyalias said:
			
		

> Is that consecutive only, or cumulative?
> EX:
> In 10years you've worked throughout, a total of 7 'full-time class B/C'...or?
> 
> ...



Hang on, it's going to be a bumpy ride...

(1) Determine continuous CF enrolment.  Remove ED&T (unless it's MATA/PATA time), NES, Supp Res / Ranger time.

Assuming you are releasing 4c, the continuous enrolment period determines how many days per year you get.  Less than 10 years, nothing.  Ten to nineteen complete years, 3.5 days pay.  Twenty complete years or more, 7 days pay.


(2) Determine paid enrolment after 28 Feb 07, and continuous enrolment on and prior to 28 Feb 07.

So, if you enrolled on June 1st 1997, served continuously as a Primary Reservist since then:

On 28 Feb 07 you had 9 years, 273 days.

If, since then, you have 180 days class B, 270 days class C, and 40 days class A:

You get 273 (remainder from pre 28 Feb 07) + 180 (class B) + 270 (class C) +40*1.4 (class A) = 779 days = 2 years 69 days

So, grand total = 11 years 69 days paid service, 12 years 317 days  continuous service (as of 13 April 2010)


Therefore: with 12 years of continuous service, you get 3.5 days pay per year of paid service.  You have 11 years of paid service.  Therefore, you would receive as your RFRG 38.5 days of pay at your current rank and IPC.  It can be transferred directly to an RRSP, if you have contribution room, otherwise it is paid out in a lump sum with taxes withheld.

Clear as mud?


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## justmyalias (13 Apr 2010)

So, if you've been enrolled for exactly 10years and decide to retire, if you only have 9.5yrs paid service after all the math and the "x1.4's"...you get squat? ;D

For those who just did the Pension Buy-Back Calculations...would a relatively exact calculation for the 'pensionable time' figure acquired from that-be what your 'paid service time' be?


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## SeanNewman (13 Apr 2010)

kratz said:
			
		

> The RFRG is:
> 50% for between 10 years - 20 years.
> 100% for over 20 years.
> 
> ...



So are you saying I won't be getting anything for my 18 months in the Reserves earning the rank of Pte(T) with a 5F release for deciding I would rather go to the movies on a date on Tuesday nights than the Armouries?

Redress to follow!


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## dapaterson (13 Apr 2010)

justmyalias:

Enrolled for 10, 9.5 paid would be 3.5*9 = 31.5 days pay.

Remember:  Enrolled determines 3.5 or 7 days; paid determines what you multiply the 3.5 or 7 by.


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## justmyalias (14 Apr 2010)

dapaterson said:
			
		

> ...
> Remember:  Enrolled determines 3.5 or 7 days; paid determines what you multiply the 3.5 or 7 by.


This makes it clear, thank you.


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## justmyalias (15 Apr 2010)

dapaterson said:
			
		

> Hang on, it's going to be a bumpy ride...
> 
> (1) Determine continuous CF enrolment.  Remove ED&T (unless it's MATA/PATA time), NES, Supp Res / Ranger time.....



Just to be super clear.

If you have say 10yrs enrolled time., but 1/2yr in that was ED&T (not mata/pata or other)., then is your enrolled time then effectively 10-.5?

Is it simply treated as a mathematical deduction (no other penalties or negative implications?), IE your work after the ED&T period allows your 'enrolled' time to just add-up?  So one would need to be effective strength to allow the NET 'enrolled period' to exceed 10yrs?



> For those who just did the Pension Buy-Back Calculations...would a relatively exact calculation for the 'pensionable time' figure acquired from that-be what your 'paid service time' be?


You may have missed this one I asked the other day, would this be a correct figure to get your 'paid service yrs'?  I'm a little unclear about it...seems to be a good calculation, but somehow I'm thinking maybe it's not?


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## acronym (29 Jun 2011)

I didn't want to start a new thread so I hijacked this one. I apologize, but it is basically the same topic.


Anyways, I am releasing after 22 years of service from the reserves. I joined Nov 89' and released 97' briefly to go to University (ya i know i should've just ED&Ted) I rejoined Jan 98'.  

My issue is that, "currently" they are only calculating my gratuity from 98 on, which is only 13 years, when in fact I have 22 years. This is in the hands of my OR, whom are quite proficient, but I was just wondering if anyone here have any expertise on this?


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## JMesh (29 Jun 2011)

The CBI states that it calculates half or full RFRG based upon continuous enrolled service, which it defines as:

the total period of uninterrupted service in any component of the Canadian Forces without release, up to and including the day on which the member is released or transferred from the Primary Reserve, other than any of the following periods:

a. a period of leave without pay granted under QR&O 16.25 (Leave Without Pay and Allowances);
b. a period of service in the Supplementary Reserve, Cadet Instructors Cadre or the Canadian Rangers, other than Class “B” or “C” Reserve Service;
c. a period of limitation of payments authorized under QR&O 203.20 (Officers – Regular Force Limitations of Payments);
d. a period during which no military service is rendered and for which a forfeiture has been imposed under QR&O 208.31 (Forfeitures, Deductions and Cancellations – When No Service Rendered);
e. a period during which a forfeiture is imposed under QR&O 208.30 (Forfeitures – Officers and Non-Commissioned Members); or
any other period during which a member of the Primary Reserve is authorized to be exempt from duty and training or is placed on non-effective strength.

The full CBI is available here: http://www.cmp-cpm.forces.gc.ca/dgcb-dgras/pub/cbi-dra/204-eng.asp#sec-204-54


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## acronym (29 Jun 2011)

Thank you for your response. So essentially, this document states, that because I got out briefly (even before the RFRG's inception) my previous service is not taken into account? Why does it have to be continous? It isn't like they gave me any money the first time i left...


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## Res Release Clerk (4 Jul 2011)

If there is a break of service, even for a single day, between your first release date and the day of your second enrolment, they will only count the second period of service. Simple as that, and there's nothing your unit can do about it. 

Sorry!


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## HollywoodCowboy (30 Sep 2011)

Do they grandfather if you have been in for 15 yrs at 2007.
I'm a few months away from a full 20 in the old system, new system gonna take me 10 more years to get the full 100%.
Anyone have any idea?


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## Monsoon (30 Sep 2011)

HollywoodCowboy said:
			
		

> Do they grandfather if you have been in for 15 yrs at 2007.
> I'm a few months away from a full 20 in the old system, new system gonna take me 10 more years to get the full 100%.
> Anyone have any idea?


Nope. You'll have the 15 years you had up until 31 March 2007, plus the number of class "A" days served since then multiplied by 1.4, plus the number of class "B"/"C" days served since then. The thinking is that the money that previously went to top up your RFRG (despite class "A"-only service) is now going towards the government's end of your pension contribution.


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## HollywoodCowboy (30 Sep 2011)

Thanks!


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## Retiredsarge (17 Jan 2012)

Hello, Does anyone know about how RFRG is calculated when a period of disability compensation is involved? 
I was injured on Class B service and required multiple surgeries, and a long period of recovery.  This period was covered by disability compensation (discomp) and at the end of it I will be medically released.  I was recently told that the CF will not count the discomp period when calculating my RFRG.  They informed me that it will be counted as "leave without pay" even though I was given full pay for the full discomp period.  Thanks to anyone who can help!!


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## dapaterson (17 Jan 2012)

Retiredsarge said:
			
		

> Hello, Does anyone know about how RFRG is calculated when a period of disability compensation is involved?
> I was injured on Class B service and required multiple surgeries, and a long period of recovery.  This period was covered by disability compensation (discomp) and at the end of it I will be medically released.  I was recently told that the CF will not count the discomp period when calculating my RFRG.  They informed me that it will be counted as "leave without pay" even though I was given full pay for the full discomp period.  Thanks to anyone who can help!!



Have your superiors contact the RFRG audit cell in DMCA.  According to my sources, a period of DisComp is considered as qualifying service.


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## Fishbone Jones (17 Jan 2012)

The more this shit goes on, the more I'm prone to believe that the Reserve Pension was formulated and administered by the same jokers that take care of VAC awards. :facepalm:


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## fraserdw (17 Jan 2012)

"The more this crap goes on, the more I'm prone to believe that the Reserve Pension was formulated and administered by the same jokers that take care of VAC awards. "


Average time to RFRG = 36 weeks, average time to get Reg F Severence = 6 weeks.

You will be on welfare by the time you see it unless you have another income.  BTW the pension takes up to 78 weeks to arrive AFTER retirement.


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## LWH (17 Jan 2012)

For info, the Reg F severance payout timelines are significantly delayed at this time due to volume.  At the time of my release appt in Aug 11, the estimate was 8-10 weeks from my date of release.  It ended up being 15 weeks just for the review of my file, was processed one working day before Christmas or it would have been another week or so due to holiday down time.  It has to be sent by cheque though, no direct deposit.  Close to two weeks later before the cheque was in the mailbox, so just over 4 months delivery from date of release.  Vacation days buy out took an extra three weeks to make it into the bank as the earlier pay run was missed (that one does come as a direct deposit, processed IAW Reg F pay run timings).  

My severance payout was very simple, I didn't have it split into multiple funds, for a number of reasons took it as one lump sum payout.  As the weeks added up, the funds I set aside to cover expenses over that two to three months were running pretty dry (retirement employment hadn't yet commenced) so I regularly "prompted " the sign off clk at NDHQ to see if processing had taken place.  He advised there has been an exceptionally high volume lately, and the wait I was experiencing was not unusual (would have been good to know that in August).  Also if my payout was being transferred to RRSPs or similar package he advised I would likely have encountered further delays of a week or two.  

In the end, all is good.  At mid January I had my expected payouts, big sigh of financial relief.  The narrative above is for the SA of anyone undergoing Reg F release, be ready for a longer wait than than in the past, and plan an extra month or two without having the severance and vacation $ in your hand.  Hopefully these new delays are now well explained during current release interviews to allow members to properly plan.  It still doesn't compare to the Res F timelines I realize, but there is a sizable delay compared to previous years.

Cheers!


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## 54/102 CEF (20 Sep 2013)

Would anyone out there have a simple explanation on  the process to transfer the Gratuity (aka Severance Pay) straight into the pension buyback without it being taxed?

My situation is a Buy Back as a Reservist from Oct 10 1972 - Oct 31 2013 

I have been paying into the CF Pension since it came into effect for Res in 2007


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## dapaterson (20 Sep 2013)

You need unused RRSP contribution room.  And you need to have received Revenue Canada permission to not have taxes withheld at source.

Step 1: Write to Revenue Canada & get permission to roll over the severance into unused RRSP room without tax being withheld at source.

Step 2: For service prior to 1994 or so, you may make over contributions to RRSPs - I believe the severance form discusses this option.

Step 3: Once you've received the severance payment, transfer it to your RRSP.

Step 4: Transfer RRSP to the pension buyback.


Clear as mud?


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## 54/102 CEF (20 Sep 2013)

Very 

I'm sure when its all done we look back on it and think what was the puzzle ?


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