Reserve Pension- Merged

[dapaterson]

From its inception PILL has always been 9%.

See http://www.forces.gc.ca/dgcb/cbi/includes/cbi_coverpage_e.asp?sidesection=6&docid=57 for the CBI defining the benefit.

 

[The_Falcon]

New CANFORGEN

CANFORGEN 100/08 CMP 039/08 281751Z MAY 08
IMPLEMENTATION OF RESERVE FORCE PENSION PLAN ADMIN PROCESS
UNCLASSIFIED


REFS: A. CANFORGEN 045/08
B. QR AND O 26.01 SERVICE RECORDS AND DOCUMENTS



REFERENCE A ADVISED THAT EFFECTIVE 01 APR 08, NDHQ DIRECTOR MILITARY CAREERS AND ADMINISTRATION (DMCA) WOULD BE RESPONSIBLE TO LOCATE RESERVE FORCE SERVICE RECORDS, REPLACING DIRECTOR ACCESS TO INFORMATION AND PRIVACY (DAIP) WHO HAD PREVIOUSLY OFFERED ASSISTANCE TO INTERESTED PERSONNEL


FURTHER DISCUSSION HAS DETERMINED THAT COMPILING SUCH CF SERVICE RECORDS WOULD BEST RESIDE WITHIN ASSISTANT DEPUTY MINISTER, INFORMATION MANAGEMENT (ADM(IM)) - DIRECTOR GENERAL ENTERPRISE APPLICATION SERVICES (DGEAS) - DIRECTORATE HUMAN RESOURCES INFORMATION MANAGEMENT (DHRIM), THE OFFICIAL CUSTODIAN OF CF HR RECORDS. TO THAT END, STARTING 16 JUN 08, DHRIM WILL PROVIDE ASSISTANCE TO CF PERSONNEL CONSIDERING BUYING BACK PRIOR RESERVE SERVICE THROUGH THE RESERVE PENSION BUYBACK ADMIN SERVICES CELL. THE 1-800 NUMBER TO ACCESS THIS SERVICE WILL BE PUBLISHED EARLY JUNE 08


WHEN CF PERSONNEL CONTACT THE RESERVE PENSION BUYBACK ADMIN SERVICES CELL TO INITIATE A RECORDS SEARCH, THEY WILL BE ASSIGNED A CASE MANAGER WHO WILL IN TURN ACKNOWLEDGE RECEIPT OF THE REQUEST, ASK QUESTIONS REGARDING THEIR SERVICE DETAILS, SEARCH AND OBTAIN THE INDIVIDUAL S RESERVE SERVICE RECORDS AND PROVIDE A SUMMARY PACKAGE TO THE INDIVIDUAL THAT WILL DETAIL PERIODS OF RESERVE SERVICE AND INCLUDE PERTINENT SUPPORTING DOCUMENTATION. THE INDIVIDUAL WILL THEN BE ABLE TO USE THIS INFORMATION AS INPUT INTO THE ONLINE PENSION CALCULATOR TO DETERMINE THEIR PENSION BUYBACK COST AND OPTIONS. THE PENSION CALCULATOR IS LOCATED AT: HTTP://WWW.ADMFINCS.FORCES.GC.CA/RFPP-RPFR/TOOLS-OUTILS-INTRO-ENG.AS P?SEL(EQUAL)TOL. THE SEARCH OF SERVICE RECORDS MAY TAKE SEVERAL WEEKS TO COMPLETE


THOSE WHO THEN WISH TO BUYBACK PRIOR RESERVE SERVICE MUST COMPLETE AND SUBMIT THE ELECTION TO PAY FOR PRIOR SERVICE FORM TO DIRECTOR CANADIAN FORCES PENSIONS SERVICES (DCFPS). DCFPS CAN BE CONTACTED AT: 1-800-267-0325. THE APPLICATION FORM IS LOCATED: HTTP://WWW.ADMFINCS.FORCES.GC.CA/PENSION/FORMS/ELECTION(UNDERSCORE)T O(UNDERSCORE)PAY(UNDERSCORE)FOR(UNDERSCORE)PRIOR(UNDERSCORE)SERV (UNDERSCORE)CFSA100M(UNDERSCORE)E.PDF


IN ORDER TO ENSURE REQUESTS ARE PROCESSED IN AN EFFICIENT AND EFFECTIVE MANNER AND SUMMARY PACKAGES ARE COMPLETE, THE SUPPORT OF KEY STAKEHOLDERS INCLUDING DCFPS, FORMATION HQ AND/OR RESERVE UNIT ORDERLY ROOM MAY BE REQUIRED BY THE RESERVE PENSION BUYBACK ADMIN SERVICES CELL


COMMANDERS AND UNIT ORDERLY ROOMS ARE ENCOURAGED TO ENSURE THE CONTENT OF THIS JOINT CHIEF MILITARY PERSONNEL (CMP) AND ADM(IM) MESSAGE IS GIVEN WIDEST DIST


SIGNED BY MGEN W. SEMIANIW, CMP

 

[dapaterson]

So:

We're now 15 months after the coming-into-force, and only now is an Admin Process being implemented????

I'm past the point of being able to laugh at this...

 

[The_Falcon]

So:

We're now 15 months after the coming-into-force, and only now is an Admin Process being implemented????

I'm past the point of being able to laugh at this...

And the links provided in the CANFORGEN aren't even complete.

 

[geo]

If you go to the canforgen acrhive the link works on the original document but.... doesn't when you copy the text....

http://vcds.mil.ca/vcds-exec/pubs/canforgen/2008/100-08_e.asp

 

[Rifleman62]

On top of the near quarter of a million dollars in COMPOUND INTEREST alone for my buy back, I have received the confirmation from my Chartered Accountant, that due to tax laws only 47% of the annual payments I make over 20 years is tax deductable to a life time limit of 37% of the total amount financed. When the life time limit is reached, no income tax deduction.The reason is, in the eyes of CRA my elected reserve service is service "while not a contributor", meaning the time of the service, I was not a CF Pension Plan contributor.

Even though I have the RRSP room, I cannot claim a deduction of more than 47% of The annual repayment (which I owe due to the cost of the CI of the buy back, estimated at 3 times the cost at 4% SI). So financing over 20 years cost an additional $74 of CI plus, the $148K CI for the total buy back.

What that means is more screwing over by the loan sharks at NDHQ who negotiated the Reserve Pension on our behalf. It also means less cash flow as the monthly payment is in after tax dollars, and I can not claim a deduction for all of it which means more income tax to be paid equal reduced net pension to live on. Can't wait to I reach the life time limit of $63K!!

 

[begbie]

So:

We're now 15 months after the coming-into-force, and only now is an Admin Process being implemented????

I'm past the point of being able to laugh at this...

And not to mention that many of us are at a year or longer waiting to be informed what the final result is after submitting our buyback paperwork...

 

[dapaterson]

I'm at 15 1/2 months and counting...

 

[geo]

Sigh! - Ditto!

 

[54/102 CEF]

My view

Find something to tide you over - pay off any outstanding balance with 100% of the pension payout.

It stands to reason that if you pay it all off as early as possible - thats your best chance to screw these pinheads Royally

 

[Ed]

Hello to all.  I recently sent an email to MP Peter Stoffer complaining about the 7% compound interest on buyback of former reserve service as compared to the 4% simple interest that all other public servants pay on buyback.  He responded by phone and asked me to send that to him by mail (which I did) and he would take it to the chairman of the treasury board.  My MP Andy Scott has the same info and I think all of the reservists on this forum should send the same email/letter to their MP so we can make this a cross Canada united effort.  There are many problems with the pension plan but the single most important and cost cumbersome is the higher rate of interest  If we can get one thing fixed it should be this.  Please write your MP asap before parliament breaks for summer.  Thank-you, Ed.

 

[geo]

Hey Ed,
Yup... did the same a while ago...
The reply I got was that they were working on it - but that it would take time to look after.  They wanted to get the Pension plan out to the troops ASAP (their terms) so it was published and released - warts and all.

1968... gwwd - you've been around even longer than I have 

 

[54/102 CEF]

To clarify

Everyone except DND pays 4% on their buybacks?

 

[Rifleman62]

54/102 CEF

Everyone EXCEPT Reserves pay 4% SI. Now the folks running this monstrosity will say Reg F pay 7% CI, but those are Reg F members who did a Component Transfer from the Reserves, and who are buying back Reserve time.  If a current Reg F member was buying back previous Reg F time (e.g. return of contributions under the old system) it is at 4% SI. If that same Reg F member was buying both previous Reg F time and Reserve time on re-enrolment or Component Transfer, they would pay 4% SI on the Reg F time and 7% CI on the Reserve time concurrently.

 

[RLD]

To clarify

Everyone except DND pays 4% on their buybacks?

Sub-section 7(2) of the CFSA reads

Definition of “interest”
(2) In this section, unless otherwise specified, "interest" means simple interest at four per cent per annum from the middle of the fiscal year in which the contributions would have been made, had the contributor been required to make those contributions during the period for which he elected to pay, until the time of the election.
R.S., 1985, c. C-17, s. 7; 1992, c. 46, s. 36; 1999, c. 34, s. 120.

Sub-section 7(2) of the Public Service Supperannuation Act (PSSA) and RCMP Superannuation Act are almost identically worded with the same 4% interest. Each of the act has regulations to impliment the act except the CFSA which has two sets of regulations, the Canadian Forces Superannuation Regulations (Reg Force) and the Reserve Force Pension Plan Regulations (Res Force). Of the four sets of regulations only the RFPP regulations use the "unless otherwise specified" provision of the act to change the interest rate to 7% compounded. The other three regulations are silent meaning the 4% simple interest is in effect.

 

[geo]

Full & part time Public servants pay... 4 % simple interest
Reg force buying back reserve time.... 4% simple interest
Res force buying back reserve time.... 7% Compound interest

That,s what the treasury board insisted on....
DND coulda done another "wait out" and deferred the Coming into force date by another year - in the possible chance that the Treasury board mighta relented.... but that would be another year's wait... added onto umpteen years wait

 

[Rifleman62]

Geo, it is my understanding (from the then Project Director, now released), as previously stated many pages ago, that the 7% CI was negotiated by DND with TB a long time ago (I do not know the date). It would not have held up the CIF date as it was already well established that the buy back would be 7% CI. TB wanted to offset the liability (exposure) to the Crown of the Reserve pension. DND went along with it. I do not know of any Reserve member being on the negotiating team. Maybe there was. I do not have my file in front of me, but I have a copy of the Briefing Note presented by Director General Compensation and Benefits to the Defence Management Committee (DMC), [and you know who makes up THAT committee!!], where it was stated there would be "increased costs for Reserves". Did anyone at the DMC, which has a huge agenda, ask what that statement meant? Has anyone on the DMC ever had to buy back pension? Does anyone on the DMC even know the rate of interest? Way, way, way below their pay grade. They trust their subordinates to do the right thing. I know the VCDS, who is responsible for CMP, knew cause he read my letter sent by email (and posted in this forum) Dec 06. All what happen there was the usual, when you severely violate the chain of command. Several Reserve Generals then became involved as well as the Comd LFWA.

 

[CountDC]

Read CFAO 212-3 PENSIONABLE SERVICE.

The rate is not a new one - has been around for a long time before the reserve pension was ever in place. The full 7% is only charged on Cl A or Cl B under 90 days as they have to make up the CPP portion that was not paid on it.  For full time service over 90 days it is the 7% minus what ever the CPP rate was as this was deducted then. Also the 7% is only applicable to certain time periods some periods are at a lower rate. Go back far enough and even sex comes into play - female rate is lower.

 

[geo]

Umm.... CountDC
Reservists on Cl A & B are paying their CPP and EI contributions (though there was a time, a long time ago, when Class A did not contribute).

 

[Rifleman62]

CountDC, I believe you have not understood what you have read.

It is not exactly as simple as you make out. The CFAO states throughout, but utilizing this one specific column as an example "for service after 1965 but prior to 1 Apr 69, 6% minus the amount required for Contributions;". The 6% in this and all of the CFAO column "Amount to be Paid" refers to the Contribution Rate as a percentage of pay.

Further, the CFAO states throughout, but utilizing this one specific column as an example "of the pay at the rates in effect during those periods for the rank or ranks in the Regular Force corresponding to the rank or ranks held by the member in the Reserve Forces during that period and of the allowances prescribed to be part of pay by the CFS Regs applicable to the period of service, together with simple interest at 4% per annum from the middle of each fiscal year of such service to the date of election.

First of all the Contribution Rates as a percentage of pay for 2008 are 4.9% up to YMPE, and 8.4% for pay over YMPE (Yearly Maximum Pensionable Earnings.YMPE = $43 700 in 2007, in other words maximum CPP). The rates increase annually 2006 to 2013. The delay in CIF means Reservists were caught in the increased rates, thus buy back was more expensive.

The second major point is Reservists did not pay contributions based on pay at the rates in effect during those periods, but at rates of pay that were "Updated Pensionable Earnings". I made $26,473 in 1986, not $70,514, but I paid the increased contribution rate on the $70 K, not the $26K. You would think that your best five years would be the last five years of service, when you are at your highest rank and pay incentive. I retired in Aug 07. My best five years were 1988 to 1992, after a couple of promotions. Then I paid 7% Compound Interest all the way back 35 years.