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Canadian Forces Superannuation -Reduction of CPP bridge benefit at Age 65

Jim_Steed

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Stoffer, M.P.
Sackville-Eastem Shore
51 Cobequid Road Lower Sackville, N.S.
B4C 2Nl

February 21,2005

Dear Sir:

Subject: Canadian Forces Superannuation Benefits-Reduction at Age 65

This letter is written specifically to seek your support with regards to terminating the reduction formula that is applied to retired Canadian Forces members receiving a Superannuation at age 65.

On Jan 1, 1966 The Canadian Pension Plan was introduced. Unfortunately Members of the Canadian Forces were not given any choices of participation with regards to the reduction format applied at age 65. The large surplus the Canada Pension Plan has accumulated certainly indicates that premiums, with proper investment are sufficient to maintain the plan payout policy.

Compared to other Government Agencies, Military personnel are not compensated for extra hours of employment to satisfy daily Military requirements. Military Operational requirements often leads to extended family separation and crushes the member's opportunity of additional employment that creates extra funds for their family. Upon retirement our members are faced with uncontrollable amount of increases. Annual cost, such as increase of taxes on our homes, heating oil, electricity, gasoline and food continues to increase faster than our indexing revenues.

At age 65 retired members of the Canadian Forces deserve an exemption to the claw back procedures that are being applied to our Superannuation. When we arrive in our Golden Years, we should be given the financial dignity of enjoying our remaining years of family life to the fullest.

I submit this request for your continual and full support of Veterans. While celebrating the year of the Veterans, it would be a unique and most appropriate time for the Government of Canada to acknowledge the special and most valuable services Veterans continue to provide to our great Country by terminating this unfair claw back to our pensions. Give us the opportunity to live our remaining Golden Years with financial dignity.

Respectfully Your,
John H. Labelle
864-2456
florencejohn@ns.sympatico.ca



HOUSE OF COMMONS

Peter Stoffer. M.P. Sackville â “ Eastern Shore
    April 28. 2005

Mr. John Labelle 27 Dresden Court Lower Sackville, NS B4C 3X 1

Dear Mr. Labelle,

Thank you for your letter outlining your concerns with the pension claw back that affects retired or disabled Canadian Forces members receiving a Superannuation annuity and the Canadian Pension Plan.

I would like the federal government to review its policy on adjusting and reducing the Canadian Forces Superannuation Act (CFSA) annuity. In the next few months, I will be consulting with the legislative branch of the House of Commons to explore ways we can propose an end to the claw back.

Thank you again for raising this very important issue. I agree that in this Year of the Veteran, it would be a very appropriate time for the federal government to eliminate this policy.

Sincerely
Peter Stoffer, MP
Sackville-Eastem Shore
PS/hb Past and present members of the Canadian forces


April 29,2005

Dear friends;

Subject: Claw back to the Canadian Forces Superannuation annuity at age 65

1. Initiatives are being attempted to terminate the claw back procedures that are being applied to our CFS pension at age 65. This situation applies to all Canadian Forces personnel who are receiving a Military Annuity. This position will also apply to all serving members when they retire and receive an annuity.

2. Please read all enclosures carefully. As per the enclosed attachment we have received the support of Mr. Peter Stoffer, M.P. NDP Member of Parliament. Now the Torch is passed on to us. You can assist by responding to the following information ASAP.
A. Preferably send an e-mail with your telephone number to Mr. Peter Stoffer, M.P. by adding your name to the list stating that you fully support all initiatives that are being attempted in order to terminate the claw back procedures that are being applied to our CFS pension at age 65.

E-mail: stoffp1@parl.gc.ca

B. We further request that you forward this e-mail with all attachments to all your Military friends. Together we must distribute this initiative to all retired and serving Military personnel across Canada. It is important that we demonstrate solidarity.

3. The Leadership and Support of Senior Officers is requested. We are attempting to get other organizations to support us. Remember that we can only succeed if all members support this initiative. Numbers on the nominal list is what counts.

4. My pension reduction at age 65 was 480.56 per month. What will your deduction be at age 65????

Thank you friends God Speed

John H. Labelle CPO 1 (ret)
E-mail: Florencejohn@ns.sympatico.ca

CEP 232

Rm. 242. Confederation Building House or Commons
Ottawa ON K I A OA6
Tel.: (613) 995.5822
Fax: (613) 996-9655
E-mail: stoffp@parl.gc.ca

  51 Cobequid Road
  Lower Sackvillc. NS
                B4C  2N1
  Tcl.: (902) 865-2311
  Toll Free: 1-888-701-5557
  Fax: (902) 865-4620
                peter.stoffer@ns.sympatico.ca

I combined all of the letters here so we don't keep seeing the same thing over and over. - Harris, MILNET Staff


 
Canadian Forces Superannuation Benefits Reduction

I Received this from several sources and as it effects a great many of us I think it is well worth reading ,passing on and taking action and maybe even talking to your local MP about the crappy treatment afforded to our brave men and women who protect and fought for our freedoms.


Letter is listed in post #1 above and a readable format.  Harris - MILNET Staff
 
so I am currently 31 and just in the recruiting process.  Does this mean that after I turn in my 25 years of service I will be 56.  Only nine years after when I turn 65 my forces pension would be reduced?  Am I reading this correctly?
 
Yes you are.
Do to the narrow minded people up top in goverment, we get nailed when we get indexed.
My point is we pay or paid into the pension for however many years we should recieve the whole amount reguardless of age. Seems unfair dosen't it ?
& To make things worse we pay into UI all our time  in the CF & we can not collect it when we get out. Unless you are a female on Mat leave or use a few tricks with employment after you get out.
Not so much that I'm gripping but we spend so much time away from home & family that it would be nice not to have these things going on & having a bit more money coming in to home always makes things easier. 
 
as an older recruit candidate this disturbs me.  I will have paid into the plan for 25 years and only get 9 years of pension.....going to make me think a bit here.
 
mbhabfan said:
as an older recruit candidate this disturbs me.   I will have paid into the plan for 25 years and only get 9 years of pension.....going to make me think a bit here.

mbhabfan, before you get your knickers in aknot and make a hasty (and bad) decision, make sure you educate yourself with something more reputable than comments made on a website.

SECTION B - COORDINATION OF CPP/QPP AND PENSION - The CPP came into effect on January 1, 1966, and is applicable to all Canadians engaged in employment. The plan provides a maximum annual retirement benefit that is equal to 25 percent of the average of the Yearly Maximum Pensionable Earnings. The contribution rates under the federal pension plans were coordinated with those under the CPP, rather than added to them (see page 12).
\\

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

We, CF members, could receive the full CPP and continue our full pension if the plan was designed that way. It is not (and I'm unsure if this is common amongst pension plans or is characteristic of our own) and our pension contributions reflect this.  There is no such thing as a free lunch and if you are willing to pay more into your pension, maybe this can be changed.

Most outsiders (and insiders) consider the military pension plan to be very lucrative.  You are only 31 years old and in the space of 25 years, you are going to receive a 50% pension based on the best five years of a very good salary.  I don't think you are going to be eating cat food when you are 75.
 
More about CPP and why our pensions are reduced.

http://www.admfincs.forces.gc.ca/pension/cpp_qpp_e.asp?sel=cpp

Canada and Quebec Pension Plans

When the Canadian Forces Superannuation Act and Canada/Quebec Pension Plan were integrated in 1966, the Canadian Forces Superannuation Act contributions and resulting benefits were adjusted accordingly. At that time, the benefits of the Canada/Quebec Pension Plan became available to the participants under the Canadian Forces Superannuation Act without any increase in their monthly pension contributions. In effect, the contribution amount remains the same, but a portion is used to pay for modified coverage under the Canadain Forces Superannuation Act. As a result, all the annuities payable under the Act are reduced once the contributor becomes eligible to receive Canada/Quebec Pension Plan benefits at age 65, or earlier upon receipt of Canada Pension Plan disability benefits. In essence, the resulting reduction in contributions to the Canadian Forces Superannuation Account while a member was serving necessitated a corresponding adjustment to the benefits, such as annuities, that this fund could support.

The authority for this reduction, and the formula to determine the amount of reduction, are contained in sub-section 15(2) of the Canadain Forces Superannuation Act. In accordance with the formula, the basic Canadian Forces Superannuation Act pension will be reduced the month following the member's 65th birthday. When a pensioner opts for an earlier retirement pension from the Canada/ Quebec Pension Plan, he therefore draws a reduced Canada/Quebec Pension Plan pension, with no impact on his other federal pensions. However, when the pensioner reaches the age of 65 his federal pension must be reduced as explained above.

This reduction also causes a diminution of the benefit received for indexation. The Canadian Forces Superannuation Act annuities are indexed to reflect the increase in the cost-of-living as provided for under Part III of the Canadian Forces Superannuation Act, Supplementary Benefits. As the Supplementary Benefit is calculated as a percentage of the basic annuity entitlement, it is also necessary to recalculate the supplementary benefit payable based on the reduced basic annuity.
 
I work for the Ontario govt and our pension is the same way. The day I hit 60 I walk and will make xxxxx dollars per month, but when I hit 65 and the CPP kicks in, my pension drops by the same amount.
Both seem better than most plans where you retire at 65.
 
My wife, who is also a member, asked an interesting question; are our Members of Parliment's pensions affected in the same way? Will Mr. Chretiens pension go down the same amount as his CPP?
 
Canadian Sig said:
My wife, who is also a member, asked an interesting question; are our Members of Parliment's pensions affected in the same way? Will Mr. Chretiens pension go down the same amount as his CPP?

Now that you have this knowledge, I expect you will ask your candidate for Parliament in the next election what his stand on this is.  Please post your answer afterwards.
 
If you are interested or concerned about this topic, you can tune in to Peter Warren tomorrow when he speak with "MP Peter Stoffer on how the feds are screwing our Canadian soldiers, sailors and airmen out of their rightful pensions."  Peter Warren Broadcasts on the Chorus radio network between 1200-1500 hrs on Saturday and Sunday.  You can listen via the internet through:

630 Ched in Edmonton http://www.630ched.com/

980 CKNW in Vancouver http://www.cknw.com/  CKNW has a wonderful audio vault in case you aren't available tomorrow afternoon or would like to hear it after the program is completed. 

I expect it will only be a short 10-15 minute segment to state what his position is.  If you don't know, Petter Stoffer is the NDP Veterans Affairs critic and his biography (federal) is located here:

http://www.parl.gc.ca/information/about/people/key/bio.asp?lang=E&query=9158&s=M
 
Well I'm glad I posted this. & I wasn't blasted.
My whole point is we do so much for our country. & we sometimes pay a big price; most of us have already in some form or other.
Any type of compensation?
We are not looking for a hand out just leave our pensions alone. Because afterwards when we are doing our golden year things, the cost of everything is always going up. There are a lot of pay issues that can be sorted out. Why not take care of the ones that effect all the members that are in or where in.
Give some dignity back to the troops & their families when ever possible.
Not only is this the year of the veteran. This is also a big year for the military as well. We on the whole don't ask for much. We serve our country everyday & everywhere. Gone are the days of some one watching out for you. You have to be good at everything from your own admin to ordering your kit now. & the big CYA is now in effect system wide. (Cover Ye A--).
Any way enough on this topic.
Hopefully this will get it's due reading & hopefully the MP's In Ottawa during all that banter will cut us some slack & vote in favour of the Troops past & present.     

 
Well, Peter Stoffer spoke about this initiative but I can't say he said anything that wasn't already known. 

If you are interested in hearing what he has to say, go to the CKNW website and go to the audio vault (you wil have to log in - very easy to do).  Click on Sunday, 26 Jun 05, and choose 11 am time.  The interview is around the 45 minute mark.

From what I know of this, it is simply due to the way our pension plan (as well as many other government pension plans) is structured.  There is a lot of rhetoric being used by the proponents of this initiative and you should be guarded in how you view this.  I have to admit that the use of a NDP MP makes me very leery about this.

There will be a website developed shortly so I hope someone will post it.

Cheers

 
http://www3.ns.sympatico.ca/military.pension/page-01.htm


I am not sure if this website has been provided on this topic.  For those of you interested in your pension and how CPP is reduced at 65 I suggest you take a look through the website.  Pay particular attention to a paper written by LCol (Retd) Jim Lumsden. 

I still do not believe they have been unfairly treated but he makes a passionate argument and he does raise the point as to whether we should be contributing more towards are pension in addition to CPP.  The last I heard there was a considerable surplus in the CFSA account over and above what is required to pay out pensions.  The federal govenrment, as the sponsor of the plan, is slowly siphoning off the surplus, maybe some of it should come back to the member...

 
 
There were some very out of date topics referring to this same subject - decided a new topic could bring a fresh look into a not so new procedure.  Very interesting points I must say.

Copy.......and.........Paste!

April 14, 2008


The Honorable Jean Crowder;
MP NDP Nanaimo/Cowichan.,
British Columbia

     
Dear Jean;

            Please allow me this opportunity to [A] Identify myself state the purpose of this letter [C] provide you with some back ground and [D] explain my position on the matters at hand., which at times may cause you some concern knowing your position on Vancouver Island.
          I am Donnie Cappler, a retired member of the Canadian Military who served 25 years , I currently reside in Nanaimo with my wife June, and may be reached at 250-714-0588 or e-mail djcappler@yahoo.ca..
…….  The purpose of this letter is to bring to your attention the unjust procedure of the Canadian Government to CLAW BACK military pension at age 65.
            I enlisted in the Canadian Military in Aug 1960 and served for 25 years retiring 25 Aug 1985, during these 25 years I saw duty across Canada, and served 7 years with NATO in West Germany in the Cold War era. Though Germany was considered a good posting there were always the threat and constant reminder of the tension between two super powers and we were in the middle.
            As a member of the military I was compelled to pay a portion of my monthly salary towards my “end of career” pension, for the purpose of this letter I am going to use  MY exact figures or as close as I can get as they pertain to my pay, and allowances and claw back in an effort to drive home the unfairness of the claw back, and to paint a true picture.
            Upon my retirement at the end of 25 years service I was awarded a military pension of $1219.00 with no chance of indexing for 18 YEARS, to qualify for indexing a soldier has to obtain the magic number of 85 [age plus years of service] I joined at age 17 and retired at 42. In 2003 at age 60, I was indexed and my pension rose to by approx. 57% to $1913.00, I continued to receive indexing for the next 5 years and  my pension reached a grand sum of $2152.00 by January 2008. Then came the good news, as of the month following my 65th birthday [February 2008] my pension would be clawed back on a two tier system. The original pension of $1219.00 would be reduced to $1008.11 and the indexing would be reduced by prorating it over a 23 year time frame [though I only drew the indexing for 5 years] to reflect my new gross pension of $1811.98 a drop of $340.00 per month….Happy Birthday…oh did I forget to mention I now receive OAS of $ 504.00 per month..
            In comparing pensions I see federal MPs qualify for a full pension after 6 years of SERVICE and it is indexed immediately, I fully realize there are many times when you are away from your home, neighborhood, and family, and carry on employment in two cities, as a member of the military I to was away from home, an average of 200 days a year for all of my 17 years in combat ready units, yet no extra compensation was ever offered. Twenty five years vs six years. Now comes the BIG kicker…at age 65 MPs pensions are not clawed back…why is that? Seems strange that both the politicians and the military work for the same government yet there are different rules when it comes to pensions….Now that seems fair?  Oh I know that OAS for MPs may be reduced or cut out if their total income exceeds the federal allowable amount, of $64,000.00 the same rules apply to military members, the difference is the military pension is so much less it very rarely plays a part. To stress this fact, my yearly pension a combination of CPP, OAS, and Military pension is $32,880.00, may I add this of course is gross, prior to any deductions. There is a reason for that and it based on dollars earned over the years, I do not have any problem with MPs earning a fair salary which relates to a larger pensions that I understand, from a military pay of $64.00 per month in 1960 to a high of $2783.00 in 1985 after 25 years service and obtaining the rank of Master Warrant Officer [MWO] equates to a pension of $1219.00, I ask you where is the justice. The claw back also has far reaching aspects, when a military member dies after age 65 the “spouse” is entitled to 66% of his/her pension, [this was just increased in 2007 from 50% the finework of the NDP ] lets look at the figures…..$2152x66%=$1420.00 compared to $1811.00 x 66%=$1195.00 a net loss of $211.00 per month, this many times is the difference between living and existing, and often strips the “spouse” of their dignity, and financial independence.

        I would hate to see the mess in this fine nation would be in if the treaty payments  given to our First Nations people were to ever be diminished or welfare and social assistance were cut like that of the military pension, nor can I imagine what the government would do…..on second thought I know what would happen. They would call upon the military to restore order. I do not bring this up just to aggravate you or berate our First Nations people or poke fun at those in need simply to bring to full light the serious unjust manner in which our soldiers, airman, and sailors, vets included are being treated.
        I recall several years ago that the Canadian government saw fit to rectify an injustice to the Chinese people of our country by awarding them a settlement of SEVERAL BILLION dollars, despite the fact the injustice was done with the best interest of the Canadian people being foremost. In essence if the government can go back 200 years and rectify some of the problems with the First Nations and 65 years and do the same for the Chinese why is there such a problem with undoing the injustice imposed by the  government upon our military that was established in 1966. We are not looking for retro active payments just stop the CLAW BACK, and do it now. Give the soldier the fairness and justice he deserves.
        It is not the military Commanders, Commanding Officers or even the Chief of Defense Staff that determine where the military serves, where they go, what they are to do, when they are to do it, these decisions are made by the members of parliament, those that make up our Nation’s government. It behooves me to understand how politicians can play with the lives of the military member the very lives that gave him/her their freedom and protect their country yet [with the exception of a few] do not support them when unjust and unfair practices are placed upon them. Something that is within their power to do, there seemed to be no problem changing legislation to facilitate the rectifying of “unjust” practices to others.  They have no problem committing them to theatres of operations yet sit on their hands when asked to support a Private Members bill  introduced by Peter Stoffer MP NDP Sackville-Eastern Shore, Nova Scotia to abolish the military pension claw back in 2006.
          It is a known fact the last Liberal government with Paul Martin as the finance Minister extracted approximately $16,000,000,000.00 [BILLION] from the Canadian Military pension fund to pay down the national debt of Canada. Is the national debt not the responsibility of EACH Canadian, oh I understand the military and it’s employment require a good number of $$$$$$$$ to get their job done as the government deems fit and it adds to the debt of Canada, then again so do infrastructure, medical care, OAS and EVERYTHING else that cost money to run a nation. I did not see the government extract any money from one of the richest pension funds available, that of the teachers, why is that? Because they have no control, but they do control the military!
          Here are men and women who have written blank checks to the people of Canada to provide a service to the Nation and its protection even if it means giving one’s life, this is a bill paid in advance. These are the same men and women that spent months fighting the flood of the Red River, quelled the Oka uprising in Quebec, cleared the streets of Toronto of snow, commit them selves to aide to civil authority and aide to civil power, lined the streets of Montreal during the FLQ crisis, and currently giving their lives in Afghanistan, all part of that blank check.  Each and every month I see politicians traveling around the world visiting our troops, sitting among them, sharing stories, etc, I do not however suspect that one MP that visited Kandahar  mentioned the fact that upon retirement and reaching age 65 we will claw back a portion of your pension…..This is not a subject that is NOT known to the “HILL PEOPLE” in Ottawa…Peter Stoffer MP NDP Sackville Eastern Shore, has raised in the house on several occasions, and as mentioned  introduced a bill in 2006, and is about to reintroduce yet another private member’s bill [bill 502] to effectively  abolish the CLAW BACK of the military pension. We as a “people” of Canada need and look for your support in the passing of this bill. I regress just a moment to say thanks to the NDP for their latest upgrades of the Veterans Act, in 2007 it for sure was a step in the right direction, again my personal, thanks. Ironically while composing/writing this letter I learned of General Hiller’s decision to step down as the Chief of Defense Staff, seems he also has had enough of the policies of the current Conservative government and the unfair way and unjust measures imposed upon his troops.

            It is common knowledge that our Prime Minister Mr. Harper and his party favor  the status quo, it will take the combined support of all other parties or the convincing of many of the Conservative members to bring a resolve to this improper and unjust act, even if it means a change in legislation .


        Respectively submitted;


            Donnie Cappler 
            Sergeant Major
                Retired




Bin
 
There is no claw back.  I say again, there is no claw back.

The Canadian Forces Superannuation Act and its related regulations specify what members will receive on their retirement.  It is in plain, clear black and white that a portion of the annuity is a bridge benefit, which expires when an individual reaches age 65 and begins to collect benefits under the CPP (or QPP).  If, on release, an individual chooses to ignore the briefings where this is explained, there is not much else that can be done.

Contributions are based on the full amount for the life of the member (and suvivors) plus the bridge benefit to age 65.  If someone want to increase the benefit, they have to be ready to pay for it.
 
I've always been amazed by the screaming about this - the CFSA is, like most pension in Canada, integrated with CPP - that is, the final benefit is designed to be combined with the CPP, which is designed to replace 25% of the average industrial wage in Canada.  The veterans' complaints about their pensions are founded on a complete lack of understanding of how pension math works in Canada.  The amount one receives over and above what they start to receive at 65 is a bridge benefit, it's not an amount that's clawed back, it is an additional payment provided for by the CFSA to enhance incomes before one is able to receive OAS and maximum CPP.  There's no thievery here, it's how most Canadian civilian pensions work.

The other matter discussed, survivor pensions - 2/3s of full pension to a survivor is better than most civilian pensions offer (the standard is 60%, some people elect 50% to get a higher payment in their lifetime but the spouse must waive their right to 60% to do so under most laws, including Ontario's), so there's a good deal for members of the CFSA here too.

The bottom line is that the CF pension is better than most civilian pensions, especially for those who serve most of their working life and make the Factor 85 cut.  Incidentally, only a few civilian pensions have Factor 85, most are 90.

With all due respect to the gentleman who wrote the letter, he really is not getting a raw deal at all.
 
dapaterson said:
Contributions are based on the full amount for the life of the member (and suvivors) plus the bridge benefit to age 65.  If someone want to increase the benefit, they have to be ready to pay for it.
 
Exactly the issue.  Due to a lack of understanding of his own benefits he now wants an increased benefit for which he has not paid. Who will pay if this private member's bill is passed the next time around?  Not those currently receiving their pensions.  It will be those of us still serving and contributing to CFSA. 

It is every individuals responsibility to understand their pension benefits long before they retire and plan accordingly.
 
Redeye said:
I've always been amazed by the screaming about this - the CFSA is, like most pension in Canada, integrated with CPP - that is, the final benefit is designed to be combined with the CPP, which is designed to replace 25% of the average industrial wage in Canada.  The veterans' complaints about their pensions are founded on a complete lack of understanding of how pension math works in Canada.  The amount one receives over and above what they start to receive at 65 is a bridge benefit, it's not an amount that's clawed back, it is an additional payment provided for by the CFSA to enhance incomes before one is able to receive OAS and maximum CPP.  There's no thievery here, it's how most Canadian civilian pensions work.

The other matter discussed, survivor pensions - 2/3s of full pension to a survivor is better than most civilian pensions offer (the standard is 60%, some people elect 50% to get a higher payment in their lifetime but the spouse must waive their right to 60% to do so under most laws, including Ontario's), so there's a good deal for members of the CFSA here too.

The bottom line is that the CF pension is better than most civilian pensions, especially for those who serve most of their working life and make the Factor 85 cut.  Incidentally, only a few civilian pensions have Factor 85, most are 90.

With all due respect to the gentleman who wrote the letter, he really is not getting a raw deal at all.

"When is the reduction factor applied to CF pensions?

CF pensions are reduced by a formula specified in the pension legislation:

    * When a retired CF plan member reaches age 65, which is the normal age of eligibility for a CPP
       benefit, or
    * When a retired CF plan member becomes entitled to a CPP disability benefit.
The CPP benefit may be more or less than the reduction of the CF pension since the provisions and the benefit calculation formula of the CPP are different from those of the CF pension plan."

This reduction of pension benefits happens at age 65 to a huge number of retirees in Canada,
CAF, RCMP, Public servants and many  private sector pensioners.
Perhaps those who are screaming about this "clawback" should re-familiarize themselves
with the Questions  contained in the URL below.

http://www.forces.gc.ca/dgcb/dpsp/engraph/faq_e.asp
 
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