Reserve Pension- Merged
- Thread starter Spr.Earl
- Start date
Hey all,
For the last 2 years i have been in corespondance with the Minister of National Defence, over the inequalities in the RFPP and bias that is shown to Reserve Force members of the CFSA. I am currently on round 4 with the minister, and i'll tell you they do not have a clue or understand it. Someone, when they wrote the regulations went throught a great deal of trouble to make sure that we pay the greatest amount possible for our pension. I know the Minister relies on his staff to research the issues but some of the response i have received are just looney toon. They hearld the pension plan like it is gold plated deal.... it is akin to bragging about giving a starving person a meal, but forgetting that the food they gave him came from the dump and was rotten and rancid.
The 7% compounded interest is not the biggest factor that affects the cost of the prior service buy back, it is the wage index. this ranges from 109% in 2005 to 208 % in 1990 and keeps climibing to 441% in 1980 and onward and onward. This makes my pay in 1997 as a SGT worth more tham my pay now as an MWO and that is what the calculate the contributions on before interest..... A previous poster was correct the only way to effect any change is going to be a concentrated effort thought numerous MP.( the obudsman cannot adress this as it is written in the act and regulations, nor ccan a redress of greivance.)
For the last 2 years i have been in corespondance with the Minister of National Defence, over the inequalities in the RFPP and bias that is shown to Reserve Force members of the CFSA. I am currently on round 4 with the minister, and i'll tell you they do not have a clue or understand it. Someone, when they wrote the regulations went throught a great deal of trouble to make sure that we pay the greatest amount possible for our pension. I know the Minister relies on his staff to research the issues but some of the response i have received are just looney toon. They hearld the pension plan like it is gold plated deal.... it is akin to bragging about giving a starving person a meal, but forgetting that the food they gave him came from the dump and was rotten and rancid.
The 7% compounded interest is not the biggest factor that affects the cost of the prior service buy back, it is the wage index. this ranges from 109% in 2005 to 208 % in 1990 and keeps climibing to 441% in 1980 and onward and onward. This makes my pay in 1997 as a SGT worth more tham my pay now as an MWO and that is what the calculate the contributions on before interest..... A previous poster was correct the only way to effect any change is going to be a concentrated effort thought numerous MP.( the obudsman cannot adress this as it is written in the act and regulations, nor ccan a redress of greivance.)
- Reaction score
- 1,360
- Points
- 1,160
The problem is to get by public servants to get to a cabinet minister. The public servants are part of the problem. I believe Treasury Board make some incorrect assumptions, and DND went along with it. Who went to a lot of trouble to make the Reserves pay and pay? William Mercer Ltd, under contract to DND. DND contracted that pension expert company to develop the RFPP with the aim of making us pay. Can I prove it? I don't think so.
Just to keep us quiet, as the RFPP was enacted by an Order in Council, so the RFPP cannot be Redressed, or acted on by the Ombudsman. They knew what they were doing. Not one senior Reserve General officer who sits at the table has pounded the table on our behalf. And this continues.
Just to keep us quiet, as the RFPP was enacted by an Order in Council, so the RFPP cannot be Redressed, or acted on by the Ombudsman. They knew what they were doing. Not one senior Reserve General officer who sits at the table has pounded the table on our behalf. And this continues.
- Reaction score
- 771
- Points
- 1,240
There is one NCO with more than 20 years full-time service, that I am aware of, who is faced with a buyback cost of more than $800 per month. Choosing to accept the buyback is an additional 27% loss of family income.
I would like to think most people want to buyback their pensionable time, the question is how to make it affordable?
It's lucky the above example is not a service couple with similar pension conditions.
I would like to think most people want to buyback their pensionable time, the question is how to make it affordable?
It's lucky the above example is not a service couple with similar pension conditions.
- Reaction score
- 0
- Points
- 210
Rifleman62 said:
I don't think there was anything sinister about using an OIC to enact the changes made to the CF Superannuation Act. It is, by far, the most expeditious way to make amendments to legal statutes. Typically though, one needs to regularly read the Canada Gazette to learn about when these changes are being made. In this case, the 60 day comment period would not have been sufficient enough to recognize issues surrounding the wage index or the compound interest being used.
The financial issues surrounding the RFPP aren't unique. Anyone else notice that contribution rates are rising faster than our pay rates?
- Reaction score
- 27,197
- Points
- 1,090
begbie said:
I'm the last to be an apologist for the pension folks, but that is incorrect. Pension contribution rates have been increasing by 0.3% of pay, per year, until a steady-state of 6.4% (below YMPE) and 8.4% (above YPME) are met.
The use of OICs to promulgate regulations has the advantage of being easier to change. In this instance, it's Treasury Board acting as the GiC that sets the regulations.
The fundamental problem is the lack of information available. Set rules, provide information and tools to people to let them determine their situation and make an informed choice. The current system fails to do that.
- Reaction score
- 0
- Points
- 210
dapaterson said:
I stand corrected. But the fact that they're rising at all makes me curious. It makes me think that either the pension is underfunded or underperforming and not meeting its growth goals.
On it's current trajectory, it's not hard to imagine I'll be contributing 10% before I retire.
Sorry, that was a bit of a tangent. Just goes to show you that all this stuff can be complicated and we should all be seeking financial advice to figure out if investing in the reserve pension makes sense.
George Wallace
Army.ca Dinosaur
- Reaction score
- 138
- Points
- 710
begbie said:
I suppose, if you don't want to keep up with inflation in your payments, you could be paid a pension in "yesterday's dollars" as opposed to the current rate on your retirement. It is a pension plan that must constantly be managed to ensure there are monies for the large number of pensioners and small number of young contributors.
I still can't see how a pittance of a pension from Reserve Service is worth all this bitterness by some. What do they realistically expect to have as a pension? A couple of dollars a month is no comparison to a couple $K a month. (Spoken by one who is on the $K/month....ie. Annuitant) Unless a Reservist has worked Class B or C for twenty or so years, many are making a fuss over absolutely nothing.
Those longtime Class B and C Reservists who complain should reflect on the rates that a person joining the Regular Force must pay to claim their Reserve time towards a pension. Again, it is calculated at the Rank that the person currently has on application. That is why it is best to buy back that time as a Pte/OCdt, than to wait until they are Sgt/Capt or above. That said, why should a Reservist get any breaks contrary to current policies, to buy into a Reserve Pension? It is not a free ride/welfare.
On the other hand, newly enrolled Reservists have a lot to benifit from this plan and should be encouraged to enrole in it. They are not the ones facing the problems though.
Then again, I have no involvement or interest in this plan.
- Reaction score
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- Points
- 1,090
George:
A few misconceptions in your post.
1. In the old days, a Res -> Reg transfer would buy back time, if elected in their first year in the Reg F, at the rank and IPC where it was earned. This has been changed; instead, old pay is inflated to modern values, modern contribution rates are charged, and then compound interest on top of this - a double hit.
2. The increase in contributions is not inflationary; in theory, 4.6% of pay will grow with inflation as the base pay increases. The increases in contribution rates are to better align employer/employee contributions, to get closer to 60%:40% (right now the employer is paying closer to 66%).
3. Under every piece of federal pension legislation existing, interest accrues at 4%, simple interest on retroactive contributions. The only group to be charged a different rate, a rate set by regulation not law, is members of the Reserve Force - they pay 7% compound interest.
4. DND/CF has failed in their implementation - it took 7 1/2 years from the law to coming into force. Or, looking at it another way, the amount it cost to buy back increased by about 60% due to the delays (vice 28% at the other interest rate)
5. The Government, in the form of a law, gave an order to DND. DND chose to ignore that order for an extended period of time (see point #2). A very bad and very dangerous precedent.
6. WIth the changes to the CFSA, a Reservist buying back pays the same rates as someone joining the Reg F. In fact, they have it worse - it costs more to buy back under the Reserve Pension Plan that under the Reg F Plan (part I.1 vs part I).
7. Despite 7 1/2 years from legislation to implementation, DND still was not (and is not) ready. Records have illegally been destroyed; others have been illegally withheld from members. In my case, a request in 2006 received a reply in 2009 - despite DND having, by law, 30 days to reply. DND has taken official requests filed in accordance with the Privacy Act, transferred them from one desk to another and announced that they are no longer official and that therefore they do not have to obey the law in meeting response times. Think about that - DND has declared itself to be above the law.
8. Staff in the pension office are overwhelmed and making many, many mistakes. In my case, it was 23 months from when I submitted my paperwork until they replied. Then they mis-counted days worked and provided incorrect data to me about the cost of the buyback; by the time they caught and corrected their error I had to take remedial action that cost me additional money to fix. They then gave incorrect information for the transfer of funds, having my bank cancel and re-issue the payment (fingers crossed, RBC hasn't come back to me for more money because of that yet). And then when working with the Canada Revenue Agency, they made errors in their filings, leading to CRA sending me incorrect data and once again forcing me to spend additional time and money to correct their errors.
In short: DND has not covered themselves in glory on this one. Ignoring legislation directing them to offer benefits to Reservists; breaking the law with respect to disclosure of pay records to members; processes unable to handle the influx of new members of the pension plan (under 30% of those eligible have eleceted to buy back, or so I've heard); charging higher interest rates... A litany of failure.
Oh, and what of those Reservists killed in Afghanistan prior to 01 March 2007? In 1999 the Government said "We want reservists to have pensions". Do you think the staff have done anything for the survivors, to get them benefits? I was nearly kicked out of an info session for asking that question - and after much prodding getting the answer "No, we're not doing anything for them."
A few misconceptions in your post.
1. In the old days, a Res -> Reg transfer would buy back time, if elected in their first year in the Reg F, at the rank and IPC where it was earned. This has been changed; instead, old pay is inflated to modern values, modern contribution rates are charged, and then compound interest on top of this - a double hit.
2. The increase in contributions is not inflationary; in theory, 4.6% of pay will grow with inflation as the base pay increases. The increases in contribution rates are to better align employer/employee contributions, to get closer to 60%:40% (right now the employer is paying closer to 66%).
3. Under every piece of federal pension legislation existing, interest accrues at 4%, simple interest on retroactive contributions. The only group to be charged a different rate, a rate set by regulation not law, is members of the Reserve Force - they pay 7% compound interest.
4. DND/CF has failed in their implementation - it took 7 1/2 years from the law to coming into force. Or, looking at it another way, the amount it cost to buy back increased by about 60% due to the delays (vice 28% at the other interest rate)
5. The Government, in the form of a law, gave an order to DND. DND chose to ignore that order for an extended period of time (see point #2). A very bad and very dangerous precedent.
6. WIth the changes to the CFSA, a Reservist buying back pays the same rates as someone joining the Reg F. In fact, they have it worse - it costs more to buy back under the Reserve Pension Plan that under the Reg F Plan (part I.1 vs part I).
7. Despite 7 1/2 years from legislation to implementation, DND still was not (and is not) ready. Records have illegally been destroyed; others have been illegally withheld from members. In my case, a request in 2006 received a reply in 2009 - despite DND having, by law, 30 days to reply. DND has taken official requests filed in accordance with the Privacy Act, transferred them from one desk to another and announced that they are no longer official and that therefore they do not have to obey the law in meeting response times. Think about that - DND has declared itself to be above the law.
8. Staff in the pension office are overwhelmed and making many, many mistakes. In my case, it was 23 months from when I submitted my paperwork until they replied. Then they mis-counted days worked and provided incorrect data to me about the cost of the buyback; by the time they caught and corrected their error I had to take remedial action that cost me additional money to fix. They then gave incorrect information for the transfer of funds, having my bank cancel and re-issue the payment (fingers crossed, RBC hasn't come back to me for more money because of that yet). And then when working with the Canada Revenue Agency, they made errors in their filings, leading to CRA sending me incorrect data and once again forcing me to spend additional time and money to correct their errors.
In short: DND has not covered themselves in glory on this one. Ignoring legislation directing them to offer benefits to Reservists; breaking the law with respect to disclosure of pay records to members; processes unable to handle the influx of new members of the pension plan (under 30% of those eligible have eleceted to buy back, or so I've heard); charging higher interest rates... A litany of failure.
Oh, and what of those Reservists killed in Afghanistan prior to 01 March 2007? In 1999 the Government said "We want reservists to have pensions". Do you think the staff have done anything for the survivors, to get them benefits? I was nearly kicked out of an info session for asking that question - and after much prodding getting the answer "No, we're not doing anything for them."
George Wallace
Army.ca Dinosaur
- Reaction score
- 138
- Points
- 710
Thanks dapaterson
As I said, I am really a disinterested party in this. Prior to the Reserve Pension being "approved/passed" I was hearing from some, more financially and legally inclined than I, that the "whole deal" was illegal. It really does not fall under the Rules. It in essence is giving a Pension to "Partime" employees. Correct me if I am wrong, but that means it doesn't fall under any Pension Act. This whole Reserve Pension is an anomaly.
As I said, I am really a disinterested party in this. Prior to the Reserve Pension being "approved/passed" I was hearing from some, more financially and legally inclined than I, that the "whole deal" was illegal. It really does not fall under the Rules. It in essence is giving a Pension to "Partime" employees. Correct me if I am wrong, but that means it doesn't fall under any Pension Act. This whole Reserve Pension is an anomaly.
- Reaction score
- 27,197
- Points
- 1,090
Federal public servants working part-time or on other than permanent full-time status do contribute to ther PSSA. Thus the CFSA offering an RPP is not entirely anomolous.
The Reserve pension plan, part I.1 of the Canadian Forces Superannuation Act, is entirely a creature of Regulation, vice legislation. In part, that's due to a realization that Regulation is easier to change than Legislation.
Given my lengthy stint as a full-time Reservist, I'm in the Part I of the CFSA - the Reg F plan.
The design and thought processes leading to the design of the RPP were not as detailed as one might hope. There are still problems, and related plans need some amendment of their rules to better interface with the CFSA and its two parts (particularly the Public Service Superannuation Act).
From what I've seen. the folks who worked on the development ofthe RPP and amendments to the existing CF plan were not the best and brightest...
The Reserve pension plan, part I.1 of the Canadian Forces Superannuation Act, is entirely a creature of Regulation, vice legislation. In part, that's due to a realization that Regulation is easier to change than Legislation.
Given my lengthy stint as a full-time Reservist, I'm in the Part I of the CFSA - the Reg F plan.
The design and thought processes leading to the design of the RPP were not as detailed as one might hope. There are still problems, and related plans need some amendment of their rules to better interface with the CFSA and its two parts (particularly the Public Service Superannuation Act).
From what I've seen. the folks who worked on the development ofthe RPP and amendments to the existing CF plan were not the best and brightest...
George Wallace
Army.ca Dinosaur
- Reaction score
- 138
- Points
- 710
As with the problems of Reservists and their civilian employers giving them time for training and courses we find that DND/CF is the worse offender. It also looks like DND/CF are the worse offenders under Sections 32, 33 and 34 of the FAA that covers all Government Depts (Federal).
Perhaps it is time that the Minister and Deputy Minister were called to task on these matters.
Perhaps it is time that the Minister and Deputy Minister were called to task on these matters.
- Reaction score
- 27,197
- Points
- 1,090
Re: The FAA.
DND may have a larger volume of 32/34 errors (33 is heavily centralized and better controlled) than other departments, but DND also dwarfs all other federal departments, both in personnel and in funding. DND has some delegated authorities that other Departments can only dream about, due in part to their reasonably good internal controls.
Not to say that some DMs have not been called to task; while no one every gets fired at the top levels of any government organization in Canada (the head of eHealth Ontario perhaps being the exception that proves the rule), there have been instances where people have unexpectedly retired, or a reshuffle has occured where someone was left without a chair ("He will consult at the school of the public service" is always a good clue that things have just come to a grinding halt).
But much of the internal "discipline" at the top levels of the public service is quiet reshuffling to hide mistakes, with the knowledge that the person you're hiding today could be your boss tomorrow. Much like CF career management. ("Let's see, we've given unit X two of our biggest mistakes, so we'll also give them one of the best to try to average it out.")
DND may have a larger volume of 32/34 errors (33 is heavily centralized and better controlled) than other departments, but DND also dwarfs all other federal departments, both in personnel and in funding. DND has some delegated authorities that other Departments can only dream about, due in part to their reasonably good internal controls.
Not to say that some DMs have not been called to task; while no one every gets fired at the top levels of any government organization in Canada (the head of eHealth Ontario perhaps being the exception that proves the rule), there have been instances where people have unexpectedly retired, or a reshuffle has occured where someone was left without a chair ("He will consult at the school of the public service" is always a good clue that things have just come to a grinding halt).
But much of the internal "discipline" at the top levels of the public service is quiet reshuffling to hide mistakes, with the knowledge that the person you're hiding today could be your boss tomorrow. Much like CF career management. ("Let's see, we've given unit X two of our biggest mistakes, so we'll also give them one of the best to try to average it out.")
Data person, Sounds like you and I are in the same boat, I almost have my 9131 days of full time service and I am also a member of part 1, did you realize how much the rules differe for reg and reservists members of the same plane despite having served the same amount of actual days??? I think the regulations grew by 20 pages to ensure that there was a distinction. As I said earlier I have been in correspondence with the MND over the pension and some of the answers he has signed his name to are completely ridiculous. If he had any clue he would have the errors corrected. For Mr Wallace, please before you minimize something please ensure you know all the facts. let me put somethinginto perspective for you. Pensions are based on the wage you earned.... Had I been able to contribute to the pension plans since my enrollment as a regular force individual was able to, I would have paid $30K +/- in contributions for my pension. With the RFPP and the "new" buyback rules my pension will cost me 168K +/- by the time it is all said and done.... can you explain to me how that is even remotely fair???
To really add insult to injury the Pension fund is now sitting at a surplus of 4.3 BILLION dollars over what it has to pay and what it expects to pay in the future.
Dataperson, are you sure about the buyback interest for all the other federal pension plans???? If so then that is more ammo for my next Salvo at the minister.
To really add insult to injury the Pension fund is now sitting at a surplus of 4.3 BILLION dollars over what it has to pay and what it expects to pay in the future.
Dataperson, are you sure about the buyback interest for all the other federal pension plans???? If so then that is more ammo for my next Salvo at the minister.
- Reaction score
- 27,197
- Points
- 1,090
It's been a while, but last time I reviewed the RCMPSA and PSSA both set interest at 4% simple interest.
- Reaction score
- 1,360
- Points
- 1,160
logmore, did you get the personal message (PM) I sent you? I could use the info to complete my project which has a deadline of 3 Jul
Clause 7(2) of the CFSA reads as followslogmore said:
'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. (italics is for highlighting purposes only)
Both the PSSA and RCMPSA have a clause 7(2) that is virtually identical to this. The CFSA Regs (RegF), PSSA Regs and RCMP SA Regs are all silent on interest so the 4% rate is in effect for the RegF, PS and RCMP. Clause 15(2) of the RFPP Regs however specifies a 7% compounded interest rate so under the "unless otherwise specified" provision of CFSA 7(2) the Reserve plan is the only one with the higher interest rate.
I have queried several times why the RFPP is set out for this special and in my opinion punitive treatment. The answer I received each time is that this is what Treasury Board and DND agreed to. This of course doesn't really answer the question since it states who did it to us not why it was done to us. When I pointed this out all I got in reply was silence.
RLD
George Wallace
Army.ca Dinosaur
- Reaction score
- 138
- Points
- 710
This looks like a long, drawn out, frustrating haul. No doubt some senior bureaucrat figured (s)he could save several billion by doing this now, not realizing that should an appeal be made and won by complaintants, several times that will have to be coughed up by the Government. (S)He will have had several large bonus cheques and a promotion by the end of it. :
For those awaiting verification from pension services they have posted timelines for processing applications on their website at
http://www.admfincs.forces.gc.ca/dcf-dsp/rfp-rpf/pspt-etrp-eng.asp.
It should be noted that the timelines only apply from the date your release message is received.
Note 4 of the page reads as follows:
"Note 4. High priority is given to released members' files. Buy Back for serving reservists are only processed when all priority files have been completed. There is no typical timeline for non-released members."
For added insult if you are hoping to use your RFRG payment to offset some of the buyback cost it could take over a year to have this processed (62 weeks).
RLD
http://www.admfincs.forces.gc.ca/dcf-dsp/rfp-rpf/pspt-etrp-eng.asp.
It should be noted that the timelines only apply from the date your release message is received.
Note 4 of the page reads as follows:
"Note 4. High priority is given to released members' files. Buy Back for serving reservists are only processed when all priority files have been completed. There is no typical timeline for non-released members."
For added insult if you are hoping to use your RFRG payment to offset some of the buyback cost it could take over a year to have this processed (62 weeks).
RLD
