Reserve Pension- Merged

[dapaterson]

One year since retirement?  Utterly appalling.

In a just world, heads would roll.

In this world, promotions and commendations all 'round!

 

[54/102 CEF]

There was news item about Treasury Board screwing up pensions a short while ago - I alerted the author on a program run for Reserves. Told him read this thread and he`d have more than a few cues to explore.

 

[begbie]

Time to break out the champagne!!!  I just got a phone call from Pension Services this morning with the final figure on the cost of my pension buyback.   It is slightly less that I calculated but within 5% of my calculation.  I am supposed to get the final figure on the exact pension benefit within a week.  If I understand it correctly, all the required approvals and hurdles have been passed and the official letter should be coming soon.  Hopefully, the end is in sight......in 3 weeks I will have been retired for 1 year.  I will keep you all posted.

Good news... I am happy to hear that there is at least movement for some people. 

Did you submit your buyback paperwork right after the CIF date?  If so, did you have to notify them that you will be retiring in order to have them re-prioritize the assessment?  I only ask because the way things are going, my personal plans might have me releasing before my buyback gets finalized.

Thanks.

Waiting not-so-patiently since July '07

 

[dapaterson]

A little bird told me that releases alone are outstripping the capacity of the Pension office; if you're "in the queue" as I have been since March '07, you'll remain stuck there, with the determination fading into the distance, until you pull the pin.


On September 14th, 1999, Royal Assent was granted to bill C-78, authorizing the creation of part I.1 of the Canadian Forces Superannuation Act.  Nine years, twenty-three days later and counting... and still not ready for prime-time.

 

[FoldedWings]

Hi begbie
      I submitted my FIRST attempt at election mid June 2007 after considerable difficulty getting my full Reserve records and making the calculator work for me  (couldn't do it from on Base).  I submitted the SECOND time in October 2007 after I was informed that I had received wrong instructions from Pension Services staff and had done the first one wrong (and due to my inability - again- to get necessary information.)  Each time I added a covering letter stating and restating that the delays were not due to my errors and that I was retiring in October 2007.  I think they accepted that I had started in process in March 2007 and that any delays were not my fault. 
  Mind you - although I have already drunk that bottle of champagne- I still don't have my official letter with the terms of my pension and benefits or the final amount of my CPP bridge.  But it is the first concrete information I have been given so far and at least I now know what the final cost will be and can free up some of my other savings that I was afraid to touch in case I needed more money.
  I was told that I would have more information within a week and you can bet that I will be going after it if need be.  I will let you know for sure what happens .
  By the way, their final figure was pretty close to what I  got with the calculator (theirs was slightly less).  I felt kind of proud of myself about that since I was dealing with 28 years of service and had absolutely NO help from anyone.

 

[Sailorwest]

I have gone through and figured out my buy back figure which is in the 45 k range for give or take 7 years of the 23 i've been in. Now, I don't see myself doing a whole lot of Cl B/C work over the next few years and have a bit of an issue to decide on.
If I were to find the money (likely from my now devalued RSP) and bought back all my previous service the actuarial value of the pension transferred into a locked in retirement fund looks much better (something like 3x the purchase price). Now, I would need to do that before I turn 50 and then retire from the CF. Not that I have any real problem with doing that but it does put the writing on the wall.

If I were to stay in and build up maybe another two full years of pensionalbe service over the next 10 years, I would end up with a pension, after I turn 60 that would ding my CPP by a certain amount and end up giving me a small amount of pension money. Not exactly sure what that would be but it doesn't seem to be much. ($8000/yr, less CPP and tax?)

Third option is to not buy back anything and just accept the pension contributions that come off my cheque going forward as the cost of doing business and accept that the pension I get will be worth a case of beer once a month.

To be honest, I feel as though I have achieved anything I wanted when I got in and although the possibility to command a unit might happen in the next few years, my world doesnt' rest on that happening. For me, the best situation is to buy back and get out before I turn 50, turning that money into a LIRA to combine with my existing RRSP and civvie pension. My RFRG would be about 85% of the cost of buying back that service time so it functionally won't be affected.

Do any of you folks have better perspective (or just different) that would give me something else to consider here?

 

[Monsoon]

I have gone through and figured out my buy back figure which is in the 45 k range for give or take 7 years of the 23 i've been in. Now, I don't see myself doing a whole lot of Cl B/C work over the next few years and have a bit of an issue to decide on.
If I were to find the money (likely from my now devalued RSP) and bought back all my previous service the actuarial value of the pension transferred into a locked in retirement fund looks much better (something like 3x the purchase price). Now, I would need to do that before I turn 50 and then retire from the CF. Not that I have any real problem with doing that but it does put the writing on the wall.

My understanding is that you don't have to finish the buyback before you retire. If you elect to pay in installments over 15 years (say), the deductions can continue to come out after you actually retire and start receiving benefits (or, in your case, after you get your return of contributions). Since the return of contributions is about twice what you contribute (because it includes teh government's side of the contribution too), it's definitely a worthwhile investment.

So, bottom line (as I understand it): you don't need to pilfer your RRSP to fund the buyback, unless you want to, and it's worth buying into.

Someone correct me if I'm wrong here...

 

[charlesm]

I happened to be on course last month in St.Jean and we had a rep from the CF Ombudsman who was a lawyer. I asked the specific question and yes we are allowed to grieve this in her opionon.

Their is a difference between the French and English version of the NDA. She said go with the French version not the English.


thanks

Note that after you make your election, you pay 4% COMPOUND INTEREST on what you owe. Not 4% Simple Interest. On my outstanding buy back that 4% Compound Intrest translates to 6.36 % from the TD Canada Trust Mortage calculator. I took the amount I owe, repayable over 20 years and it comes out to almost the nickle of what I pay monthly. The rate includes a mortaliy charge.

Posted previously:

Re: Reserve Pension
« Reply #407 on: April 10, 2007, 21:35:39 » 

--------------------------------------------------------------------------------
As stated by others here, you cannot Redress nor complain to the CF Ombudsman re the pension as it was enacted by the Governor in Council in regulations. Confirmed by the following, and verification with both organizations.

NDA Section 29
GRIEVANCES
Right to grieve

29. (1) An officer or non-commissioned member who has been aggrieved by any decision, act or omission in the administration of the affairs of the Canadian Forces for which no other process for redress is provided under this Act is entitled to submit a grievance.

Exceptions
(2) There is no right to grieve in respect of
(a) a decision of a court martial or the Court Martial Appeal Court;
(b) a decision of a board, commission, court or tribunal established other than under this Act; or
(c) a matter or case prescribed by the Governor in Council in regulations.

The Ombudsman’s Office does not have jurisdiction over issues relating to the Pension Benefits Division Act or the Canadian Forces Superannuation Act. These are pieces of federal legislation, which are amended through Parliament.

 

[geo]

charlesm...
Problem with that compound interest is that it is mandated / directed by the treasury board..... not a decision of made under the NDA...
When you grieve, you grieve a decision taken against you.... the interest.
Who would be the Initial Authority (IA) in a position to reverse the decision... It's not your CO, not your area commander, not your element commander & I would venture to say that it isn't even the CDS...

So - not sure exactly were that ombudsman leagal eagle was going on about but, I wouldn't count on a favorable decision

 

[charlesm]

Geo,

    The question I asked was why I could not grieve the Reserve Pension because it was done through an Governor in Council and I wouldn't be able to grieve.

When she read Section 29 of the NDA in french it has a slightly different interprutation than the english side. When she explained this two other lawyers inlcuding one from the grievence board agreed with her that the french was different than the english.

It did seem to make the Captain from the Grievence Board a little nervous.

Now my french is poor at least, but if we have someone who is very bilingual and able to read both the french and english version of NDA Section 29
GRIEVANCES Right to grieve, it would be interesting to see if she was right.

IA should be CMP. They are the ones implementing the plan??


I am not saying you would win. But I am saying is we should have the right to Grieve it.

charlesm...
Problem with that compound interest is that it is mandated / directed by the treasury board..... not a decision of made under the NDA...
When you grieve, you grieve a decision taken against you.... the interest.
Who would be the Initial Authority (IA) in a position to reverse the decision... It's not your CO, not your area commander, not your element commander & I would venture to say that it isn't even the CDS...

So - not sure exactly were that ombudsman leagal eagle was going on about but, I wouldn't count on a favorable decision

 

[dapaterson]

Interesting.  The french edition of the NDA (http://laws.justice.gc.ca/fr/ShowFullDoc/cs/N-5///fr) states the following:

Droit de déposer des griefs

29. (1) Tout officier ou militaire du rang qui s’estime lésé par une décision, un acte ou une omission dans les affaires des Forces canadiennes a le droit de déposer un grief dans le cas où aucun autre recours de réparation ne lui est ouvert sous le régime de la présente loi.

Exceptions

(2) Ne peuvent toutefois faire l’objet d’un grief :
a) les décisions d’une cour martiale ou de la Cour d’appel de la cour martiale;

b) les décisions d’un tribunal, office ou organisme créé en vertu d’une autre loi;

c) les questions ou les cas exclus par règlement du gouverneur en conseil.

Modalités de présentation

(3) Les griefs sont déposés selon les modalités et conditions fixées par règlement du gouverneur en conseil.
Aucune sanction

(4) Le dépôt d’un grief ne doit entraîner aucune sanction contre le plaignant.
Correction d’erreur

(5) Par dérogation au paragraphe (4), toute erreur qui est découverte à la suite d’une enquête sur un grief peut être corrigée, même si la mesure corrective peut avoir un effet défavorable sur le plaignant.

Key phrase there is 29(2)(c) "les questions ou les cas exclus par règlement du gouverneur en conseil." - which I would translate as "questions or cases excluded by regulations from the Governor-in-Council"; different from the English version of the NDA which states "a matter or case prescribed by the Governor in Council in regulations."

 

[geo]

precisely DAP..... 29(2)(C) in it's french form points to decisions made by "government in council" as not being grievable.

At present, the decisions made concering compound interest were not made at the CDS' level - therefore, he cannot decide against it.  To me it sounds like you'll have to tilt at windmills with a legal challenge .... not a grievance.

 

[FoldedWings]

  Well, it looks like I may have been a little premature to break out the champagne.  While I did get a final figure from Pension Services on the cost of my pension buyback, I have been less than successful in finding out exactly what THEY are going to give ME as a result of my paying them an awful lot of money.  First I asked them when I would get an official statement of exactly what my benefit would be.  I was told,  "After you pay us the money!"  My reaction to that was , "Not likely!"  They then gave me an estimate.  So I asked them, "But how much is my bridge benefit going to be?"  The response was that the bridge benefit is already INCLUDED in the amount you get when you calculate your benefit with the online calculator.  So the amount you see is not what you will get annually FOR LIFE.  It is the amount you will get for 5 years...age 60 to 65.  Then approximately 25% of that will be removed. Whoa!  That was a bit of a shock.  So I asked about the CPP payments that would become payable to me as a result of buying back my Reserve pension.  After all isn't that why I'm paying 7% COMPOUND INTEREST?  "Oh no," I was told, "there are NO CPP benefits attached to this pension buyback!"  So there you have it.  Summary, the figure you think you are getting for life when you do your online calculations, is only for 5 years.  And any increase in CPP benefits?  Forget it!  I have spoken to just about everyone at Pension Services in the past 2 weeks and that is the answer I get.  They have agreed to send my file to the Policy people for confirmation but I was told today that the answer will not change. 
  So now I wait again.  I have asked them again for a final statement of exactly what my benefit will be.  I will be 61 tomorrow.  One year since retirement and 19 months since I began this whole process.  I am getting afraid to ask any more questions because every time I do so I lose money.  When does this end?

 

[begbie]

One year since retirement and 19 months since I began this whole process.  I am getting afraid to ask any more questions because every time I do so I lose money.  When does this end?

Sorry to hear it... the way I explain federal pensions to my friends is that your final defined benefit includes all federal sources (excluding OAS).  And even then, I think, OAS is reduced depending on how much retirement income you take home.  So I am not surprised to hear that you will have your CPP payments clawed-back when you reach the age of 65.

But... they should tell you what your final benefit will be before you fork over big bucks.  I view this as a really important investment decision.  I want to know what the final benefit will be so I can work out my own personal cost-benefit calculations and make a decision from there.

 

[dapaterson]

It's not a claw-back of CPP/QPP; rather, it's elimiantion of a bridge benefit.

Federal public pensions (CFSA, PSSA, RCMPSA) consist of two parts:  the core annuity, plus a bridge benefit.  The bridge benefit is payable to age 65; at that point, it ends.  It is intended to "bridge" you over until you can draw CPP/QPP benefits.

Your paymetns are structured that way - note that you pay a lesser amount of contributions until you reach the CPP/QPP max for the year.  To eliminate that bridge benefit and roll it into the core annuity your contributions would go up on amounts up to and including the CPP/QPP max.

Nothing precludes you from drawing your CPP/QPP early, except that there is a reduction in benefits when you elect to draw it early.  On the other hand, you can increase your CPP/QPP benefits by delaying drawing them until after your 65th birthday.

 

[begbie]

It's not a claw-back of CPP/QPP; rather, it's elimiantion of a bridge benefit.

Shouldn't have called it a claw-back.  I just re-read that section in my pension benefits guide.  The guide refers to it as a 'coordination of benefits.'

 

[geo]

Ummm.... isn't that what the "bridge" is all about... to carry you over until you reach 65 ???

 

[FoldedWings]

I guess I should explain myself a little better.  The Reserve Pension Project page states the following, "Bridge benefit - is paid at any time during the period after the commencement of retirement until the member reaches age 65. The intent of the bridge benefit is to provide replacement income approximating CPP benefits that become payable at age 65."  Also from the Pension Modernization page regarding the RFPP, "The monthly amount payable to a retired member under the RFPP includes both a basic lifetime pension and a temporary additional component (the “bridge benefit”).  The objective of this bridge benefit is the same as under the Regular Force plan, namely to stabilize retirement income from the time the member retires until they become entitled to a normal retirement or a disability pension under the C/QPP. At that point in time, retirement income will come from both the RFPP and the C/QPP".

According to the Reserve Pension Board people that I spoke to the above statements are NOT TRUE.  You are not purchasing any additional CPP benefits with your Reserve Pension Buyback.  The "Bridge Benefit" is in effect, a bridge to nowhere!  Any CPP benefits they refer to are assumed to come from either qualifying "B" class time or civilian jobs.  I asked them how they could, "approximate the CPP benefits that I would receive at age 65" if they had no knowledge of my work history outside of the Reserve and they had no answer for me.  That is the question I have had them forward to the Policy Department.  I have asked for a copy of that email but nothing as yet.

I pointed out to them that of ALL the information I have gleaned from their website and presentations about 9/10ths of it deals with how much money I have to give them.  Less than 1/10th deals with how I figure out how much I am getting.  I have told them that they need to get the answer to these questions because although I may be the first person to ask these questions (hard to believe), I definitely won't be the last.  I encourage all of you to bury them under questions until you get the answers you feel you need to get an accurate picture of your benefits.  And when you get the answer, question the validity of the source.  I leave you with one final quote from an email I received from Pension Services,  "After reviewing your file we noticed that the person dealing with your case was requesting a Benefits Estimate for your pension.  This individual works for the Reserve Force Pension Buyback team and was trying to relay the information for your pension estimate from the benefits section to prevent you from having to be passed around.  All the numbers that were provided in the email were based on an estimate not the final numbers."  That's how they cover their @#$%$#**s

 

[Harris]

I hope no one was planning on doing their buyback before Feb as the calculator is down as per http://www.admfincs.forces.gc.ca/dcf-dsp/notice-avis-eng.asp.  Sigh.

"The calculator you are attempting to access is temporarily unavailable. It is anticipated the calculator will be available mid to end January 2009. Unless your situation is urgent, please do not contact DCFPS as the calculator will be made available before your request is processed."

 

[PuckChaser]

I wonder if that means the interest won't get bumped up to (4.7%??) until the calculator was back up? Doubt that'll happen, but its nice to dream!