Dolphin_Hunter said:
Perhaps someone on here could enlighten me. I am currently in the process of redressing my TOS (apparently someone else here on the wing had the same problem and was successful in their redress).
22 May 1996 (Joined, placed on LWOP)
01 June 1996 (LWOP ceases, career kicks off)
Sometime in 2012/2013 I signed my IPS. This decision was based on the information provided to me, as well as information I gleaned from reading the pension manual and online pension stuff (official sites).
I was told and all indications from everything I read was that I would NOT be placed on the new TOS based on the fact that I had 10 years of service prior to Mar 2007, and I would remain under the old rules.
Now I find out that I have been indeed placed on the new TOS, which means I can’t release until I complete my 25. I have spoken with the pension office and they made mention of having to sign a grandfather clause, stating that I was willing to remain under the old plan. This is the first I have heard of such a thing, and really why even offer that as an option? I know it wasn’t offered/mentioned when I was weighing the pros and cons on what to do.
Even now on the pension website there is a scenario that matches my situation https://www.tpsgc-pwgsc.gc.ca/fac-caf/act/rnsrgm/scnr-eng.html#s6 (Scenario 6), so I am at a loss as to why I was placed on the new plan.
I have engaged my COC, and am pressing on with a grievance. I’m just wondering if anyone has any information on this “grandfather clause acceptance option”.
I can't comment either way on whether there was an option to opt in or out at the time, but I will say, be careful what you wish for.
Under the OLD rules (i.e. when and IE was 20 years), you could get out with an "immediate
unreduced annuity" based on 20 years of service.
However, if you changed your TOS to IPS (i.e. decided to serve beyond 20 years), then you had to serve at least to 25 years for NCMs, 28 years for officers up to LCol, and 30 years for Cols and above in order to receive that immediate unreduced annuity. If you were on IPS and released prior to those points, then your immediate annuity was
reduced 5% for each year short to a maximum of 15%. In other words, if you were a captain on IPS and decided to get out at 26 years, your annuity would be reduced by 10%.
This was all simplified under the new rules with the "immediate unreduced annuity" point being 25 years for all. However, it was interesting for those of us who were grandfathered. If the new rule point had passed, the new rules applied, but if they hadn't, then the old ones still did. For example, in my case, if I had released at 24 years, I would have been penalized 15% for being four years short of 28 years of service, but as soon as I hit 25 years, I was then entitled to an immediate unreduced annuity.
I believe there was a clause under the old rules that said your annuity would not be reduced to less than what you would have received at 20 years. In other words, you could serve 23 years, but your pension could be the same as if you had gotten out at 20 (seems kind of a waste). In short, there was a financial incentive to stick it out to 25, 28 or 30 years as applicable. In summary, under the old rules, getting out at 20 years was easy, getting out at 25, 28 or 30 was easy, but getting out in the in-between period incurred a penalty.
There is still a lot of confusion about this out there and according to the SCAN seminar I went to recently, the folks at the new combined government pension office are not fully up to speed on the CFSA. For this reason DND still maintains a pension office in the interim to try and ensure things are not forgotten. If you're not getting the answers you think you should, try contacting (through the chain of command) the Director Pension and Social Programs (DPSP).
