Reserve Pension- Merged

[dapaterson]

Once submitted your request is vetted left, right and centre; understating things merely would mean you'll get a surprise when they get back to you and tell you it's tens of thousands more than you thought.

If you want, you can PM me start and end dates for your class Bs and I'll try to determine whether you'd be enrolled in the full-time plan yet.

 

[justmyalias]

Once a reservist has this pension...what happens if:

a) release from the military entirely?

Return of Benefits:
What are the cash-out rules?  (Do you simply pay income tax on it, or is there some 'cash-grab' admin fee where you only get 50% of your booty?
Can you transfer the entire amount to RRSPs?

b)COMP Trans to REGs?

 

[dapaterson]

Once a reservist has this pension...what happens if:

a) release from the military entirely?

Return of Benefits:
What are the cash-out rules?  (Do you simply pay income tax on it, or is there some 'cash-grab' admin fee where you only get 50% of your booty?
Can you transfer the entire amount to RRSPs?

The act and regulations spell it out - depending on why you release and how long you've served, you could get a deferred pension, an immediate pension, or receive a transfer to a locked-in RRSP.  You don't get a cheque in your hands.

b)COMP Trans to REGs?

You roll over into the full-time plan, and continue to contribute.

 

[CountDC]

ok I have to ask  - do you read??  the answers to the questions you are asking are there, all you have to do is read.  It is appearing to me at least that you simply do not want to put any real effort in, you want people to feed you all the answers - basically you want others to do all the work for you.

 

[justmyalias]

ok I have to ask  - do you read??  the answers to the questions you are asking are there...

Couple points.

army.ca uses a database engine that is foreign to me, compared to the industry standard vBulletin., with which I'm quite familiar in how to perform keyword searches and such.

This forum, I'm still always a little lost how to nagivate.  I just realize how to 'subscribe' to new thread creations to sub-forums .  If you're suggesting the answer to my question is in this thread itself?  or you're saying 'the answers....are there'...where is 'there'??  Cyberspace???

Ex:  in vB, you can 'search within a thread'.  I still have no clue if I can do this on this site.  To suggest to me that you want me to manually sift through 953 posts is well...a little challenging for a thread of this size.

I'm curbing my quick response because others have been helpful thus far, and you're the only one (who I haven't had the good pleasure I'm sure to be on the receiving end of some contributed help) rather just quick to insult., so I'll just take it as a random pissy-Wednesday-moody-chap .

While I do appreciate being helped 'where' and 'how' to figure some questions out, it would certainly be nice to learn how to get those answers myself...I just don't know how or where to start.

There is another point to all this.  Certain Online Forums have an interest base because they are known to have SME's who are willing to help and give the direction on subjects that they know in and out.  The kinds of answers that would take a SME a minute to spit out, compared to someone who's oblivious and would need a week to get to step 1 in finding the answer.  Personally, I have my own subjects which I'm proficient in and love to spoon-feed to others who ask questions and are in my position with Military Admin related issues-simply because I can sympathize with the feeling of helplessness, and feel privileged to be able to help them out of said predicament.

May I ask, is it not clear to you that I'm asking because I simply don't know where to go for the answer other than asking here?  Would anyone prefer to expose themselves to insults like yours instead of doing the work themselves?  I certainly hope (and my experience has proven otherwise in fact) that your response is not one you'd usually give, but rather an off-moment you had.  Everybody else on this forum has been quite helpful.

Ex:  as above .

The act and regulations spell it out - depending on why you release and how long you've served, you could get a deferred pension, an immediate pension, or receive a transfer to a locked-in RRSP.  You don't get a cheque in your hands.

I wish I knew instantly where to look when you say 'the act and regulation'  :-\.

 

[dapaterson]

http://laws.justice.gc.ca

Canadian Forces Superannuation Act
Canadian Forces Superannuation Regulations
Reserve Force Pension Pan Regulations

 

[justmyalias]

Awesome!, I'm on it!

So to be clear, you're saying it'll say clearly in there what the cash-out rule is for return of benefits? and what the min/max rule is to be eligible for that?  I was hinted that there's some time-line to that.  If you're below you don't get return of benefits...or something of that nature.

 

[begbie]

Awesome!, I'm on it!

So to be clear, you're saying it'll say clearly in there what the cash-out rule is for return of benefits? and what the min/max rule is to be eligible for that?  I was hinted that there's some time-line to that.  If you're below you don't get return of benefits...or something of that nature.

If I understand your question correctly, my answer is that you need to be fully vested into the Pension to receive its full benefit.  In the case of Part 1.I, the time period to become fully vested in the Pension is 2 years.  So, if you release before you reach the 2 year, fully-vested, milestone, you will receive a return of contributions.  If you release after you become fully vested, you will be given 3 options (the actual pension benefit) as dapaterson said upon release.  I can confirm exactly what he/she said. 

What follows is almost verbatim from the letter I received from Pension Services upon my release last year:

"As you have two or more years of pensionable service, you are entitled to one of the following pension benefits:

• a deferred annuity payable at age 60 of approximately $xxxx.xx;
• an annual allowance payable as early as age 50; or
• a transfer value, with a total value of approximately $xxxxx.xx (maximum locked-in transferable amount of $xxxxx.xx)

It's up to the member, if fully vested, to make a decision as to what they would like to do with their pension.

 

[dapaterson]

The Office of the Supervisor of Financial Institutions has released their actuarial validation of the Reserve Force Pension Plan for 07/08.

http://www.osfi-bsif.gc.ca/app/DocRepository/1/eng/reports/oca/cfsa_res_2008_e.pdf

Quote of the day for me:

It is assumed that there will be approximately 5,500 elections for prior service by the end of March 2010. There is currently a backlog of cases that have not yet been processed. Taking into consideration the additional resources expected to be added during plan year 2011, it is assumed that the backlog will be processed by the end of plan year 2013.

So, if all goes well, delays of up to four years are expected to process elections.

Or, in other words, it will be 14 years from  Royal Assent to resolving the backlog.

 

[justmyalias]

OUCH.

2013....So I'm among the last of this backlog, well-at least I'm in it!  :nod:.

 

[Bruce Monkhouse]

Just some info from another plan.

My Union [OPSEU} is doing a buyback program also, so I checked to see how much it would cost me to buy back my 10 years of military time.
Just slightly over $200, 000 to earn an extra 600 a month, so by the time one throws interest on that loan I would need to live more than 30 years past retirement [anytime I choose after 60] just to break even.

Much as I'm an optimist.......

 

[GAP]

Well......worse have lived longer...... ;D

 

[Future Pensioner]

Just some info from another plan.

My Union [OPSEU} is doing a buyback program also, so I checked to see how much it would cost me to buy back my 10 years of military time.
Just slightly over $200, 000 to earn an extra 600 a month, so by the time one throws interest on that loan I would need to live more than 30 years past retirement [anytime I choose after 60] just to break even.

Much as I'm an optimist.......

Bruce:

Is this something that you were just "comparing figures" or will OPSEU Pension actually let you buyback military time?  Just wondering as I am in a similar "provincial government" pension plan and they have always informed me that they will not allow a "buy back" of military time.

Thanks in advance.

 

[Bruce Monkhouse]

To be truthful I did not 'officially' ask but it sure sounds like it. [and once I did the calculation, that was enough for me]

"OPSEU and the Government of Ontario have approved a change to the Plan’s rules"

"for service with other registered public sector pension plans"

http://www.optrust.com/Employers/EmployersUpdates/empu36_jan2010.asp

 

[dapaterson]

Just some info from another plan.

My Union [OPSEU} is doing a buyback program also, so I checked to see how much it would cost me to buy back my 10 years of military time.
Just slightly over $200, 000 to earn an extra 600 a month, so by the time one throws interest on that loan I would need to live more than 30 years past retirement [anytime I choose after 60] just to break even.

Much as I'm an optimist.......

However, what's the time frame you can spread out payments on that $200K?  What would those payments be?  If it's $200/month (for example), part of which may be tax-deductible, that means you get an extra $400/month on retirement (before taxes) - for paying an extra $200/month from now until you retire.  That may be the better way to look at it - how much out of pocket before retirement, and how much (net) in pocket after retirement.

 

[dapaterson]

Two new CANFORGENs on this topic have been released, announcing an extension of the buy-back period to 28 Feb 2011, together with a change that ceases contributions at age 69 vice 71.



CANFORGEN 105/10 DGRC 013/10 051838Z MAY 10
PENSION PLAN CHANGES
UNCLASSIFIED


REF: CANFORGEN 007/10 CMP 003/10 081524Z JAN 10



THE TREASURY BOARD HAS AGREED TO EXTEND THE DEADLINE FOR CANADIAN FORCES PERSONNEL TO ELECT TO BUY BACK ALL OR SOME OF THEIR PREVIOUS RESERVE FORCE SERVICE FOR THEIR PENSIONS. THE NORMAL ELECTION PERIOD IS ONE YEAR FROM DATE OF NOTIFICATION. THE NEW DEADLINE IS 28 FEB 2011 AND IS AN EXTENSION FROM THE PREVIOUS DEADLINE OF 28 FEB 2010, ORIGINALLY PUT IN PLACE TO ACCOMMODATE THE LARGE NUMBERS OF PERSONNEL WISHING TO ELECT AT THE SAME TIME


IF YOU HAVE NOT YET CONSIDERED THE OPTION TO POSSIBLY IMPROVE YOUR PENSION ENTITLEMENT, I URGE YOU TO DO SO. SHOULD YOU WISH TO TAKE ADVANTAGE OF THIS EXTENDED DEADLINE TO BUY BACK PRIOR SERVICE, YOU SHOULD BE WELL INFORMED ABOUT THE PROS AND CONS OF YOUR DECISION. DETAILS OF THE BUY BACK PROCESS CAN BE FOUND AT HTTP://WWW.ADMFINCS.FORCES.GC.CA/DCF-DSP/RFP-RPF/INDEX-ENG.ASP


DIRECTOR CANADIAN FORCES PENSIONS SERVICES (DCFPS) HAS BEEN WORKING DILIGENTLY TO PROCESS THE THOUSANDS OF FILES IN ITS POSSESSION. THERE HAVE BEEN FRUSTRATIONS AMONGST RESERVISTS WAITING FOR THEIR FILES TO BE FINALIZED, BUT PHONE CALLS BY RESERVISTS DIRECT TO DCFPS TO DETERMINE THE STATUS OF THEIR FILES IN THE QUEUE ARE COUNTER-PRODUCTIVE. THESE CALLS CONTRIBUTE TO THE DELAY IN PROCESSING REQUESTS


FILES ARE ADDRESSED IN ORDER OF PRIORITY, WITH RETIRED AND RETIRING PERSONNEL AT THE TOP OF THE LIST. AS MORE AND MORE FILES ARE PROCESSED, THE EFFICIENCY OF DCFPS IS INCREASING. I ASK ALL RESERVISTS TO BE PATIENT AND EXERCISE RESTRAINT WHILE THE BACKLOG OF FILES IS BEING CLEARED


I BELIEVE THAT THE RESERVE FORCE PENSION WILL BE OF GREAT BENEFIT TO THE RESERVE FORCE, AND I WANT RESERVISTS TO SHARE IN THAT HOPE. TAKE ADVANTAGE OF THE EXTENDED DEADLINE TO INVESTIGATE ALL OF YOUR FINANCIAL OPTIONS. MAKE AN INFORMED DECISION AS THERE WILL BE NO FURTHER EXTENSION REQUESTED OR GRANTED



CANFORGEN 106/10 CMP 048/10 271436Z MAY 10
PENSION PLAN CHANGES
UNCLASSIFIED


REF: CANFORGEN 007/10 CMP 003/10 081524Z JAN 10



THE AIM OF THIS CANFORGEN IS TO ADVISE OF THE FOL TWO RECENTLY APPROVED AMENDMENTS TO CF PENSION REGULATIONS:


FIRSTLY, THE TIME LIMITS FOR MAKING AN ELECTION TO BUYBACK PRIOR RESERVE FORCE SERVICE HAVE BEEN AMENDED. THE NORMAL TIME LIMIT FOR THESE ELECTIONS IS ONE YEAR FROM THE DATE THAT THE MEMBER IS NOTIFIED THAT THEY CAN ELECT FOR THE SERVICE. HOWEVER, WHEN THE PENSION COVERAGE FOR RESERVISTS WAS INTRODUCED, THERE WAS A MINIMUM ONE-TIME THREE-YEAR WINDOW FOR BUYING BACK RESERVE FORCE SERVICE. MEMBERS WHO CAME UNDER THE NEW PENSION ARRANGEMENTS ON 1 MARCH 2007 HAD UNTIL 28 FEBRUARY 2010 TO ELECT TO BUY BACK SERVICE. TB HAS RECENTLY AMENDED THIS DEADLINE TO 28 FEBRUARY 2011. CF PERSONNEL ARE ENCOURAGED TO VISIT THE NEW CANADIAN FORCES PENSION WEBSITE FOR GENERAL INFORMATION ON THEIR PENSION PLAN AT HTTP://WWW.CMP-CPM.FORCES.GC.CA/DGCB-DGRAS/PS/PEN/INDEX-ENG.ASP. TO OBTAIN INFORMATION ON THE PROCESS OF MAKING AN ELECTION, PLEASE SEE THE PENSION SERVICES WEBSITE AT HTTP://WWW.ADMFINCS.FORCES.GC.CA/DCF-DSP/RFP-RPF/INDEX-ENG.ASP


SECONDLY, TO ENSURE THAT THE RESERVE FORCE PENSION PLAN MEETS THE REQUIREMENTS OF THE INCOME TAX ACT, THE REGULATIONS NOW PROVIDE THAT AN INDIVIDUAL CANNOT ACCUMULATE PENSION CREDITS FOR ANY SERVICE AFTER THE END OF THE CALENDAR YEAR IN WHICH THEY TURN 71, WHICH DIFFERS FROM THE PREVIOUSLY ESTABLISHED YEAR THAT THEY TURNED AGE 69


SIGNED BY MGEN SEMIANIW, CMP

 

[MARS]

Sweet.  Thanks Dapaterson.  I heard about this back in Feb, but have been waiting for the official announcement before posting
RUMINT.

 

[justmyalias]

Can someone explain what these two things are? (or if the answer is already in this post somewhere, can someone say what post it is?...searching is a pita here hehe).

pensionable years and qualifying years?

Maybe the wording is different, but when you do the bbcalculator it spits those two items out.

 

[Nfld Sapper]

Search of the Reserve Pension Site brings up the following:

Pensionable Service

CF service during which the member pays into the Reserve Force Pension Plan, the Canadian Forces Superannuation Act (CFSA) Part I or has elected to purchase past earnings. One day of qualifying service in a calendar year is considered one year of pensionable service.

Qualifying Service

each day of CF service for which a member receives pay is equal to one day of qualifying service.

 

[Stoker]

Found this e mail kicking around, interesting.

1.        "It is assumed that there will be approximately 5,500 elections for prior service by the end of March 2010. There is currently a backlog of cases that have not yet been processed. Taking into consideration the additional resources expected to be added during plan year 2011, it is assumed that the backlog will be processed by the end of plan year 2013." [Emphasis is mine]

2.      Total Actuarial Assets = $66.4 M
        Total Actuarial Liability = $55.7 M
        Actuarial Surplus = $10.7 M (19.2 % of Liability)

This sounds good - as if the PSPIB had very good investment returns. Unfortunately that was not the case as the fund had an investment loss of 1.5% to 2008. So where did the surplus come from? From my reading of the report the only other source of revenue to the fund is money paid in by the participants and by the employer. Since there was a negative return on investment the large surplus suggests these payments have been too large. Since the employer contributions are based on the participant contributions this suggests the participant contributions are too high, i.e. confirmation that the 7% compound interest rate charged for reserve buyback (versus 4% simple interest for CFSA/Reg Force and other federal plans) is excessive.

What happens to the surplus? Up to 20% above the total liability can be held in the pension fund although the employer can reduce their contributions to eliminate the surplus if desired. Above 20% it is a non-permitted actuarial surplus and the employer gets the choice of reducing contributions or transfering the non-permitted surplus to the consolidated revenue fund i.e. it becomes government revenue. If investments had actually made any money the Reserve Pension Fund would have been in this position and much of the 7% interest charged to participants would have filtered through the pension fund to either subsidize employer contributions or to general revenue as indirect taxation. It still could be. Esentially if the contribution or interest rates are too high the government gets a break while the participants continue to pay through the nose. While this would be palatable if the surplus was a case of good plan management (e.g. good return on investment) rather than excessive contributions by particpants that is not currently the case.

The management report for 2009 should be out next month and it will be interesting to see what sort of spin they put on it this year.

For the full actuarial report see: http://www.osfi-bsif.gc.ca/app/DocRepository/1/eng/reports/oca/cfsa_res_2008_e.pdf .