Author Topic: CRA and Full Pension When you Join at Age 35  (Read 5150 times)

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Offline Vell

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CRA and Full Pension When you Join at Age 35
« on: October 06, 2015, 20:39:39 »
If I understand correctly, CRA is at age 60 and full pension benefits require at least 25 years of service. If you join at age 35 (join a few months after you turn 35), is it still possible to get full pension? Is CRA on the day of your 60th birthday or can it be sometime later during the year after you turn 60? Will the CAF try to end your service before 60 (within just months) just to avoid having to pay out a full 2% per year pension?

Online mariomike

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Re: CRA and Full Pension When you Join at Age 35
« Reply #1 on: October 06, 2015, 20:51:31 »
If I understand correctly, CRA is at age 60 and full pension benefits require at least 25 years of service. If you join at age 35 (join a few months after you turn 35), is it still possible to get full pension? Is CRA on the day of your 60th birthday or can it be sometime later during the year after you turn 60? Will the CAF try to end your service before 60 (within just months) just to avoid having to pay out a full 2% per year pension?

This may help,

How does pension work exactly 
http://army.ca/forums/index.php?topic=120218.0

How does the Pension work?
http://army.ca/forums/index.php?topic=118423.0

Learn about your pension benefits
http://www.forces.gc.ca/en/caf-community-pension/your-pension-benefits.page

I'm not a CAF pension specialist, but I believe what you consider a "full pension" after 20 or 25 years is actually an unreduced pension.
It takes 35 years to get the full 70 per cent.

« Last Edit: October 06, 2015, 21:01:45 by mariomike »

Offline dapaterson

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Re: CRA and Full Pension When you Join at Age 35
« Reply #2 on: October 06, 2015, 21:02:24 »
Pension rules are more complex than that.  Rules for unreduced pensions include retiring at age 60 with 2 or more years of service; thus, not making the 25 year threshold would be a non-issue.

Even getting tossed out at 59 years 8 months would not remove your entitlement; you'd be able to choose a reduced pension immediately, or to wait 4 months, turn 60, and start collecting without any reduction.
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Offline Vell

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Re: CRA and Full Pension When you Join at Age 35
« Reply #3 on: October 06, 2015, 21:49:57 »
This may help,

How does pension work exactly 
http://army.ca/forums/index.php?topic=120218.0

How does the Pension work?
http://army.ca/forums/index.php?topic=118423.0

Learn about your pension benefits
http://www.forces.gc.ca/en/caf-community-pension/your-pension-benefits.page

I'm not a CAF pension specialist, but I believe what you consider a "full pension" after 20 or 25 years is actually an unreduced pension.
It takes 35 years to get the full 70 per cent.

Thanks a lot, that second link had the info I was looking for.

Quote
One nuance, which is of importance for those who joined when they were 'older' (like myself), is that if you reach your compulsory retirement age (CRA) prior to serving 25 years, you can still draw an immediate pension based on 2% x number of years served x best 5 average.

For example, in my case I joined at age 31, so when I hit my CRA of 55 (did not sign CRA 60) I will only have 24 yrs of service, but because I will have served until CRA I can start draOne nuance, which is of importance for those who joined when they were 'older' (like myself), is that if you reach your compulsory retirement age (CRA) prior to serving 25 years, you can still draw an immediate pension based on 2% x number of years served x best 5 average.

For example, in my case I joined at age 31, so when I hit my CRA of 55 (did not sign CRA 60) I will only have 24 yrs of service, but because I will have served until CRA I can start drawing an immediate annuity when I retire at 55, based on 48% of the average of my best 5 years' salary.

And if you don't serve 25 yrs, or until CRA (e.g. you retire after 10 yrs), you are still entitled to a pension (20%), you just can't start drawing it until age 60 (to get the full 20%), OR you can start drawing a reduced pension as early as 55 (reduced by a certain % for each year from 60 to 55)owing an immediate annuity when I retire at 55, based on 48% of the average of my best 5 years' salary.

And if you don't serve 25 yrs, or until CRA (e.g. you retire after 10 yrs), you are still entitled to a pension (20%), you just can't start drawing it until age 60 (to get the full 20%), OR you can start drawing a reduced pension as early as 55 (reduced by a certain % for each year from 60 to 55).

So if I understand this correctly, the significance of 25 year of service is that it is the minimum number of years you need to work for the CAF before you can start drawing an early pension (if you work less than 25 years, you need to wait until you are at least 55 for a reduced amount or 60 for the normal amount). Anyone who works for the CAF still gets a pension at a rate of (2% * years served) of the average salary you made during your best 5 consecutive years up to a maximum of 70% after 35 years served (if you work past 35 years, it may still be beneficial to stay in the forces for pension reasons as your 5 consecutive year average can include years worked after 35 year served). Pension is also reduced based on CPP contribution earnings and early retirement (if you retire before age 60).

This is great news. But what this also tells me is that it is really beneficial to join the CAF before age 25 if you want a chance at your maximum pension amount (70% average of best 5 years after 35 years of service). At least I get pension based on my CPP contributions from before I join as well (or does it reduce my military pension so much that my CPP contributions from before are essentially worthless?).

Now my next question I have is how much does contributions to CPP from employment before joining the forces effect pension? I will keep reading more posts but if someone has a link to a relevant answer on hand it would be appreciated.

Quote from: Pension Features
Unreduced pension

A pension that is paid immediately with no reduction for early retirement. Under the Regular Force Pension Plan, you are entitled to an unreduced pension if you:

    have 25 years (9,131 days) of CF service;
    are age 60 with at least two years of pensionable service;
    are age 55 with 30 years of pensionable service;
    have 10 or more years of pensionable service and are released due to disability; or
    you are involuntarily released due to a reduction in the Canadian Armed Forces and either:
        have 20 years of pensionable service; or
        are age 55 or older with 10 years of pensionable service.
Quote
Disabled/disability

For the purposes of the Regular Force Pension Plan, you are considered disabled during your active service if you suffer from a mental or physical condition that renders you unfit to perform your duties.

So I take it if you get medically released because of universality of service, you still get your unreduced pension as long as you served at least 10 years (although the percentage is still based only on your total years worked, which in the case of 10 years of service, is only 20%)


« Last Edit: October 06, 2015, 23:07:08 by Vell »

Offline George Wallace

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Re: CRA and Full Pension When you Join at Age 35
« Reply #4 on: October 07, 2015, 09:02:16 »
SIMPLE ANSWER:  CRA is on your 60th birthday.  It is not deferred to another date.
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