Reserve Pension- Merged

[charlesm]

The pension people for Ottawa are arriving on the WestCoast and will be giving a briefing to both Reg and Reserves during the week of May 22nd. They sent the powerpoint presentation out first.

Interesting that if you worked 30 years and retired as a CWO working 60 days a year the RFRG changes from old $50,400 to the new $8,900.

Here is a table that the use for pension buyback see what 7% CI does changes to 31% SI in 4 years.

Pensionable earnings in 2003 $53,645
Updated pensionable earnings from 2003 to 2007 $57,044
Rate of contribution in 2007 4.3%
Interest to be added (1.07)4
Difference in contributions (between Part I.1 and Part I) $830
Cost $57,044 X 0.43 X 1.3108 + $830 = $4,045


This is what happens to your pension election from 1999  71% Interest.

Pensionable earnings in 1999 $8,348
Updated pensionable earnings from 1999 to 2007 10,532
Rate of contribution in 2007 4.3%
Interest to be added (1.07)8
Cost $10,532 X 0.43 X 1.7182 = $778



Also why are Class "A" second class again in only getting 1.5% benifet.

Yearly amount is 1.5% of total pensionable earnings updated for wage growth


While full time gets
2 % X pensionable service X best average earnings X adjustment factors

If I was in the federal service I would get

2 per cent X
number of years of part-time pensionable service X
average salary for your 5 consecutive years of highest paid service based on full-time salary rate X
assigned part-time hours / standard full-time hours

 

[Rifleman62]

The part time plan includes a .5 % bridge benefit to age 65, when CPP kicks in. Therefore a total of 2 % until age 65, then the pension is reduced for everybody on receipt of CPP. The new reduction factor will be .625 at age 65. It is currently .700, and reduces annually over the next five years. By the way, I have been informed that if you are in the Public Service ( and probably any government organization that has reciprocal agreements for pensions with Ottawa - I do not know for sure, as I did not ask ), you cannot buy back concurrent Reserve/Public Service - it is one or the other. Assuming that there may be 1000 Federal Public Servants in the Reserves, you will not be able to buy back your Reserve time during the period you were employed by the Public Service. Apparently the pension benefit calculation is not as simple as posted on the web site. What it is they will not disclose for security reasons. The on line buy back calculator now has a blue "benefit" link for both the pension and roll over. My benefit is higher than the 2 % x best five x # of years. Did anyone else try this? Frankly I do not believe it, and will wait the required several months for confirmation of buy back and benefit. Also, once you make your election, the amount you owe if you will be financing your buy back commences the 1st of the month after your election. Consequently, if it takes 2/3 months to work out, you could be faced with a wopping arrears, plus the fact that you will probably be waiting 2/3 months after your retirement for your first cheque, payable end month, while automatically on the 1st of the month the financed repayment is deducted. The very, very small number of staff that are working all this out are helpful as they can be under the circumstances.

 

[George Wallace]

WARNING

For those with previous Reg Force service, and already collecting a Reg Force Pension, be very careful when looking into the Reserve Force Pension and weigh heavily the Pros and Cons of rolling your pension over.  Take a very good look at the benefits or lack of benefits in each plan.  You may be loosing more than you gain.

 

[charlesm]

George,

Former members of the Regular Force who are annuitants will not be able to contribute to Part I.1

It means that you can still work Class B(A) so long as you never go over the 55 months in 5 years, otherwise you join the Part I, which could have a serious impact on your pension/Annuitant. Now it means you have to take that month off every year.

 

[George Wallace]

And if you take a Class 'C' and do a Tour (or more)?

 

[George Wallace]

George,

Former members of the Regular Force who are annuitants will not be able to contribute to Part I.1

It means that you can still work Class B(A) so long as you never go over the 55 months in 5 years, otherwise you join the Part I, which could have a serious impact on your pension/Annuitant. Now it means you have to take that month off every year.

[Edit: Delayed after running into posting problems.]

This is one of the things that I was alluding to, as well as the loss of, or pared down benefits one may face if they made the mistake of buying into the Reserve Pension after becoming an Annuitant.  In most cases, it would not be beneficial at all for an Annuitant to switch over, nor is it possible.

What each individual has to do is follow the advice given previously in this topic, and get professional help in the form of a Financial Adviser or Accountant who are familiar with these types of 'contracts' and 'pensions'.

 

[Rifleman62]

Don't trust the on line calculator, especially the roll over benefits calculation. It is broken. My annual benefit went up $6 k in 6 days with no change in inputs. The more I ask questions and receive answers the more it seems that whoever devised the plan made every effort to make it very unfriendly for the Reserves. Some recent examples: If you make a further lump sum payment (e.g. when you receive your RFRG 16/18 weeks after release), and roll it over to the Reserve Pension, your monthly buyback installments remain the same amt. The buy back period is reduced. If you were in the PSSA, your monthly installments would be reduced, thus giving a retired person a better monthly cash flow. In the PSSA, after retirement your buy back will be taken off at source. Reserve Pension, out of your bank account on the first of the month. Why is this important? Cause you will be waiting at least 3 months for your first pension cheque, concurrently having deductions from your bank account for buy back. It also appears that the regulations were hurriedly put together, with the resulting errors. I bet someone gets a ORMM/MSM for their outstanding work on this project. A previous project director got a CDS Commendation and promoted to Colonel.

 

[dapaterson]

I've managed to remove the protection from the spreadsheet posted to the DND website; if you want to see its internal calculations, here it is in all its glory.  You can see much more detail in its inner workings this way.  I'd emphasize the disclaimer they post on the first page; I suspect there are a number of errors inside it...

(For anyone interested, I loaded it into OpenOffice, saved the file in OpenOffice format, unprotected the sheets, unhid the hidden rows and columns, and re-saved it in Excel format.)

 

[Spr.Earl]

Yup screw the Reservist again!!!!!!!!!!!!!!

 

[Long in the tooth]

Recruiters for the RegF are standing by.....

 

[begbie]

The part time plan includes a .5 % bridge benefit to age 65, when CPP kicks in. Therefore a total of 2 % until age 65, then the pension is reduced for everybody on receipt of CPP. The new reduction factor will be .625 at age 65. It is currently .700, and reduces annually over the next five years. By the way, I have been informed that if you are in the Public Service ( and probably any government organization that has reciprocal agreements for pensions with Ottawa - I do not know for sure, as I did not ask ), you cannot buy back concurrent Reserve/Public Service - it is one or the other. Assuming that there may be 1000 Federal Public Servants in the Reserves, you will not be able to buy back your Reserve time during the period you were employed by the Public Service. Apparently the pension benefit calculation is not as simple as posted on the web site. What it is they will not disclose for security reasons. The on line buy back calculator now has a blue "benefit" link for both the pension and roll over. My benefit is higher than the 2 % x best five x # of years. Did anyone else try this? Frankly I do not believe it, and will wait the required several months for confirmation of buy back and benefit. Also, once you make your election, the amount you owe if you will be financing your buy back commences the 1st of the month after your election. Consequently, if it takes 2/3 months to work out, you could be faced with a wopping arrears, plus the fact that you will probably be waiting 2/3 months after your retirement for your first cheque, payable end month, while automatically on the 1st of the month the financed repayment is deducted. The very, very small number of staff that are working all this out are helpful as they can be under the circumstances.

This is very interesting indeed.  I am a federal public servant and while I was wondering if I would be able to transfer my reserve pension to my other federal pension, I had never heard of this.  And since I have some federal time to buy back along with reserve time, this concerns me.  Now on top of my decision on whether to buy back reserve time, I have to consider this also.

To me, this seems unnecessarily restrictive.  I am now contributing to two federal pensions so theoretically, I should be able to buy back time for both of them.  Has anyone seen this in the regs anywhere?

 

 

[Rifleman62]

At the pension briefing yesterday it was stated you can be a member of both the full time PSSA as a contributor and the Res F Pension Plan as a Cl A contributor.  But, for some reason you cannot be a part time contributor to the PSSA and a part time contributor to the Res F Pension Plan. Sorry if I led anyone astray.

 

[charlesm]

Another great story in Administration.

When you try and print out your Earnings Capture report from the Buy Back Calculator Website, which is one of the things you must due for an election, you cannot use Windows XP. It will not work, it seems the programmers only made it work with Windows 2000. I have verified this after being told this from the help desk. Took 3 days to answer a Voice Mail and I haven't heard back from my email yet!!

They will accept a printout of your benefits buyback page and printouts of Capture earnings page instead.

Since the clock keeps ticking and the interest keeps piling up the sooner you can do this the better off you are.

At this time the interest is about $2 per day I wait on a $13,500 Buyback

 

[54/102 CEF]

So far - they`re not covering themselves in Glory.

In my case I elected on 7 May - and have since sent in my best estimate of earnings back to Oct 1972. Then they coached me on sending in the request for pay records that may exist - Good.

With no formal calculations or agreements I`ve been approached to start paying the buyback I'll need at full rate. That suggests a lack of process or - if they talk to enough people the office starts paying its way???

Even at that - I was told you may not get your calculation for a year. Sooner or later one has to get serious about the buyback but I'd say if you get approached better to see an advisor and plan a long term approach and then start paying.

Oh - and one last comment as Colombo would say - since the full timers are deemed to be in the Regular Force for Pension purposes - I  would be curious to know your thoughts if this isn't a glaring conflict of interest on the CF's part. That is - if you're a regular contributor does it follow that you should be paid as regular? I've already established in a separate redress that pay on full time is set by none other than the CDS's discretion.

 

[Rifleman62]

They are very, very short of staff. It seems (based on my dealings, I have not asked specifically), 1 or 2 pers to do the calculations when they get your records, 1 supervisor, and 1 policy person.  They are training additional staff. I do not think the regulations were written clearly. Several regulations for the Reserve Pension are different from the CFSA and PSSA, and certainly not to the benefit of a Reservist. One example is that when you FINALLY get your RFRG (under the NEW system direct to NDHQ from the CBG, buy passing LFA, it takes 16/18 weeks), you cannot apply the RFRG as a lump sum to reduce your monthly buy back payments unless you are in "default". The regulations state a further lump sum can only be used to reduce the term of age 65 or 20 years, whatever is later. I am challenging that. As a pensioner, I would rather have more monthly cash flow especially if I am paying 5 figures annually for buy back after paying 6 figures as an initial lump sum. Additionally as the staff are doing individual calculations, I think they are finding that policy or legal clarifications are required.

The staff I have been dealing with have been extremely cooperative, responsive and helpful. I CRA on 5 Aug. Made my election in Apr. Do not know yet exactly how much I owe, how much I will receive, and when I will start receiving the pension (other than an estimate of probably 3 months). The online calculator only gives an approximate amount, and the roll over has been broken/inaccurate since it came on line (now with warning)

P.S. Interesting, that ex Reg F apparantly buy back their return of contributions at 4% SI, repayable to age 99, and their Reserve time at 7% CI, repayable 20 years or age 65 whatever is later. As I was informed by a reserve person working in the Dept.

 

[54/102 CEF]

If you want to make sure your comment is potentially visible to "the powers that be" I suggest the following approach

Search engines may pick up certain keywords as we all know

So

Rick Hillier may have a problem on his hands - or he may not, we send him best wishes to solve the big problems and the not so big problems.

I suggested to the Pension briefing teams to set up a rumour control section on the Pension site - rumours bring doubt and dis-satisfaction. I'll follow up to see if they take this suggestion.

I think we can all reasonably agree that pension buy back rates and processes should be same for all.

 

[Rifleman62]

Background: A member buying back the required all or nothing Reserve service has concurrent  prior full time Public Service. A ruling is required as there are provisions to buy back Public Service/RCMP/Reg F time in addition to Reserve service.The regulations state that a past earnings election is for "all" of the past Reserve service earnings [see RFPP Reg 11(3)].

From: Directorate of Canadian Forces Pension Services (DCFPS) - As per a previous DPSP "ruling", a member cannot be credited twice for the same day. We can process one type of service (Reserve or Public Service) for a particular period, not both because you would pay twice but only get credited once.

Decision from CMP// DPSP:  A  CFSA Part I contributor, who makes an election which involves overlapping prior Reserve and PSSA service, can have the PSSA service count as pensionable in place of the reserve service.

This means all Classes of service which are concurrent with your full time Public Service employment cannot be counted for the Reserve Pension if your are considered to be in the Part I category. Note once you are in the Part I category, you are always in, even if the remaining service is all Cl A and some Cl B for courses , concentrations etc.

If you are employed full time or part time with the federal government, and are Cl A you should email  Priorpensionableservicearrears@forces.gc.ca to get a ruling if you are electing to buy back. This also raises the question of what happens when you reach the earnings threshold and are considered a contributor. If you cannot count the time , why should you contribute?

 

[Long in the tooth]

This remains a serious problem.  The RegF/ResF interface seems once again to have been made as difficult as possible.  The answer in the near future is to morph this into a defined contribution plan (vice defined benefit one) with DND contributions as a percentage of members based on years of employment, which should be 2% per year.  A maximum member's contribution could be 12% of gross pay.  This would be fair and transparent, and not trip the penalties/benefits such as 20 year, 24 and a day or even 3B release.  A pension after 21 years would not be incredibly different from after 19 years, as it is today.

We've had experts on this for years.  What in god's world is the problem????

 

[meni0n]

This is all very confusing. Can someone please explain clearly how exactly the reserve pension works? If let's say from year 2008 to 2028 you work class b, how much will the pension be?

 

[dapaterson]

This is all very confusing. Can someone please explain clearly how exactly the reserve pension works? If let's say from year 2008 to 2028 you work class b, how much will the pension be?

It depends.  What's your rank on retirement?  What full-time service did you have prior to working full time from '08 to '28?  What's your age on retirement?  When did you enrol?  Do you have former Reg F service?  Former public service time? Former RCMP time?  All of these can impact on your benefits.

Let's make some assumptions:

You enrolled in 1998.  From '98-2007, you served part-time for the equivalent of 3 years full time.

You serve 20 more years full-time (class B), and release after 30 years of service (part and full-time combined).

You are therefore eligible for an immediate annuity, at 46% of the average of your best five years of salary.  So, if in 2028 you were making $50,000 per year, and had done so for the past five years, your annuity would be $23,000 per year.  (This is the same as the Reg F plan)


Since your situation will be different from this, I have no idea of what benefits you would receive.  Read the information that has been published and then ask informed questions.