Reserve Pension- Merged

[geo]

There is always the grievance route to contest the additional interest
The problems with the Pension office are within their control & we should not be made to pay for it... esp if lump sum

 

[dimsum]

A little off-topic, but WRT pension buybacks after a CT, how long does it normally take for the paperwork to go through (ie:  You know how much you're actually buying back?)  I CT'd in Apr 07 and did the paperwork in St. Jean, but so far nothing's come of it.

 

[dapaterson]

There are no set standards for performance for buy-back.  And, when you ask, you'll be told that you'll be told when you're told, but that they're busy, and don't have enough staff, and that they're working on files based on priority, and... the list goes on and on.

My file was submitted 15 Mar 07 and I still have no idea when I'll know how much I owe or what it will buy back for me.  Utterly unprofessional, utterly unacceptable... and utterly unaccountable for their lack of performance.

 

[CountDC]

A little off-topic, but WRT pension buybacks after a CT, how long does it normally take for the paperwork to go through (ie:  You know how much you're actually buying back?)  I CT'd in Apr 07 and did the paperwork in St. Jean, but so far nothing's come of it.

Took me 13 months to get mine and that was before they added the reserve pension to the mix.  Your's has already taken 16 months - do you at least have confirmation that they received it? I would at least get that much out of them - we had a member just 2 months ago find out that their paperwork never made it there and was not on their pers file so they had to complete it again.

 

[George Wallace]

Took me 13 months to get mine and that was before they added the reserve pension to the mix.  Your's has already taken 16 months - do you at least have confirmation that they received it? I would at least get that much out of them - we had a member just 2 months ago find out that their paperwork never made it there and was not on their pers file so they had to complete it again.

A very good point and a good hint to stop by your OR and double check.  If you let it go for too long, the window of oportunity to apply will have closed.

 

[dimsum]

Actually, just did that today and the forms are on my pers file.  I've apparently also been deducting $ since Apr 07, but the system still has blanks for the grand total of the buyback and my days in. 

CountDC:  The above info was what you were referring to, right?  I'm just assuming they *have* to action the whole process before they start deducting $, but I've been wrong before in assuming things... :

 

[CountDC]

Actually, just did that today and the forms are on my pers file.  I've apparently also been deducting $ since Apr 07, but the system still has blanks for the grand total of the buyback and my days in. 

CountDC:  The above info was what you were referring to, right?  I'm just assuming they *have* to action the whole process before they start deducting $, but I've been wrong before in assuming things... :

looks like your clerk took good care of you. The $ that have been deducted would be an estimate that your clerk calculated to cover you for when they finally complete your file.  This is because they will calculate how much you should have paid from the date of your application to the date they finally complete things and take one lump sum out of your pay.  Can't remember what my full amount was but it was over $1.5k. The only other step would be to contact pensions to confirm they have received and it is in their magical box for processing sometime. Although your clerk mailed it, the mail does go astray sometimes.

 

[begbie]

begbie,  I would like to know more about your remark that, "4% SI is added from the date you elect to the date that you make your lump sum payment."  That is disturbing.  In my case I put my election in in June 2007 and am still awaiting "auditing" of my election.  I am going to pay it all in a lump sum.  Why should I have to pay interest on anywhere from 12-18 months that they have been sitting on my application.  After all, I was ready to give them the money last year.  It's not my fault they weren't ready to take it!
     
   The reason I decided to go with a lump sum is because I figured out that it would cost me almost $12,000 per $20,000 over 20 years.  That's major money.  I talked to my bank about investment returns vs lump sum and they did some figures and said it would be well nigh impossible to make that kind of interest  If I just kept the money and paid my own pension it would be all gone in 10 years.  Rifleman had some very good comments about the advantages of trying to buy the maximum pension in the least amount of time.

  Enough to give a person a major ulcer.  By the time they are done with me I will be ready to go after a medical pension as well!!

FoldedWings: I do not know for a fact which, if any, type of interest is applied over the time period between election and the actual commencement of the buyback as I am still waiting to actually buyback my pensionable time.  I thought it was 4% SI and Rifleman62 said it was 4% CI.  I believe that he has actually completed the process from start to finish.  So go with the 4% CI.  IMO, neither type is acceptable.  For me, whether it's 4% SI or 4% CI, it only adds up to a couple extra hundred dollars.  For others, I expect it to be so much more.  I could overlook this if took 30 - 60 days to finalize the buyback.  But at this point, I am 13 months and counting.  I am of the view that I shouldn't have to carry the burden of those extra costs it due to poor administration.

 

[CountDC]

FoldedWings: I do not know for a fact which, if any, type of interest is applied over the time period between election and the actual commencement of the buyback as I am still waiting to actually buyback my pensionable time.  I thought it was 4% SI and Rifleman62 said it was 4% CI.  I believe that he has actually completed the process from start to finish.  So go with the 4% CI.  IMO, neither type is acceptable.  For me, whether it's 4% SI or 4% CI, it only adds up to a couple extra hundred dollars.  For others, I expect it to be so much more.  I could overlook this if took 30 - 60 days to finalize the buyback.  But at this point, I am 13 months and counting.  I am of the view that I shouldn't have to carry the burden of those extra costs it due to poor administration.

I agree that there should be no extra expenses to the mbr but the 4% CI should be charged on any outstanding balance from election date. Thus if the mbr indicated that they wanted to pay off the full amount in a lump sum no matter how long the admin took they would not pay any additional interest.  If the mbr opted to pay half by lump sum and the other half pay monthly installments then they would pay the 4% only on the monthly installment portion.  If they opted to pay all by monthly installments then they would have to pay the 4% on all of it. This is the way the Reg F one works and the res one should work the same.  There should also be something in place whereby a mbr that opted for monthly payments would not get the lump shock when the pension gods finally finish after 2 years and say now you owe us 24 months payment so we are taking it all out of your pay in one shot (happens to the regs).  For regs we do a guesstimate of how much the mbr has to pay and deduct that from their monthly pay as if the pension gods have finished - works great, when mine was done after 13 months I actually had a small credit left over. Can't remember for sure but I think we were using $20 for each year estimated credit.

 

[dapaterson]

There are tremendous knock-on effects of the slow pace of information from the Pension office for those of us electing to buy-back service.  Lacking information about the Pension Adjustment for years from 1990 onwards makes it very difficult to work out RRSP contributions, as a portion of unused RRSP room may be required for the buyback - but lacking the necessary information from DND makes it impossible to work out optimal strategies for saving for retirement.

It's been 8 years, 11 months (less a day) since Royal Assent was given to Bill C-78 which authorised the creation of the Reserve pension plan.  That the basic administrative processes are not yet functional is a pretty damning indictment.

 

[dimsum]

Just FYI, if you email eligibilitycc@forces they can check on the status of the request (which, more often than not is "we don't know b/c of a backlog".)  But, at least you'll know if they received the paperwork or not.

 

[dapaterson]

They have my file; I've been told months ago that I was nearing the final step; they are just unable to give a time when they will be done.

Lack of professionalism; lack of courtesy; lack of respect to the members.

 

[Pampers]

Wow.

I am trying to get through this and sort out what I owe for my buyback, and I am getting "Calculus forehead".

Does anyone know how to explain this to me so I can get all this rolling?

I have my pay statements and I have my logon to the calculator that looks like to 8th graders built it.

That is about as far as I get.

What do I do now?

 

[dimsum]

First go to your Orderly Room and tell them you want to buy back your pension...they'll give you a few forms to fill out.  As we're noticing here, it takes quite a while to figure out exactly *how* much you're owed, but you can elect to put in x amount per paycheck into buying back. 

 

[CountDC]

Just to add to all the fun here - found this little tidbit on the DGCB site while looking up info on pension:

The monthly payments you make to pay to count past service/earnings, which include:
the cost to purchase the service/earnings;
a mortality charge—the cost of life insurance; and
interest on the unpaid balance.
In the event of your death, your survivors or estate have no more payments.

 

[geo]

In the event of your death, your survivors or estate have no more payments..

Of course not, cause you've been paying that mortality charge.

 

[FoldedWings]

Hi,
  This is in reply to begbie and all those who were discussing the interest due after election to buy back prior service with a lump sum payment.  Just asked the question today and had an answer within the hour.  I'm impressed!!!  Here is the real duff,

  "The rules regarding buying back prior service when it comes to Lump Sum Payments is the same for the both the Regular Force and the Reserve Force.
If you choose to make a lump sum payment the further interest of 4% does not accumulate. But if you decide to change your payment method to monthly installments the 4% would apply as well as an insurance for mortality, again the same as the Regular Force.
Hope this answers your concerns"

I think this at least shows that when they can answer a question they will do so.  Questions about the status of our files is probably something they have no answer for...it happens when it happens...for them and for us.  Hang in there.

 

[begbie]

"The rules regarding buying back prior service when it comes to Lump Sum Payments is the same for the both the Regular Force and the Reserve Force.
If you choose to make a lump sum payment the further interest of 4% does not accumulate. But if you decide to change your payment method to monthly installments the 4% would apply as well as an insurance for mortality, again the same as the Regular Force.
Hope this answers your concerns"

Thanks!  That just saved me a few hundred bucks.

 

[Rifleman62]

Of course   "The rules regarding buying back prior service when it comes to Lump Sum Payments is the same for the both the Regular Force and the Reserve Force".
That is the DND spin. As stated here hundreds of times, WHO would buy back pension time? Not civilians joining up with no prior service to buy back. Only Reserves staying in the Reserves, Reserves who CT to the Reg F (so now they are considered Reg F), and ex Reg F who are buying back return of contributions when rejoining the Reserves or Reg F. So they are correct saying  "both the Regular Force and the Reserve Force" , but think about it. WHO?

Yes if you " If you choose to make a lump sum payment the further interest of 4% does not accumulate. But if you decide to change your payment method to monthly installments the 4% would apply as well as an insurance for mortality, again the same as the Regular Force. ". But depending on how many years etc you are buying back, they make it so expensive to you with the 7% CI you have to make monthly payments. In my buy back 4% SI would have cost me $44.5 K, BUT I paid 7% CI on my buy back which cost me $148K. That is INTEREST ONLY.

So maybe you have $100 K /$200 K or more kicking around to buy back the principal and interest of the pension. But when the interest rate is jumped up $103.5 K due to CI, guess what, you end up making monthly payments at 4% CI (FoldedWings: the reply you got and quoted stated " further interest of 4% : but did not state CI or SI did it??) So I ended up owing just under $100K (remember the $103.5 K in extra interest???) after all my lump sum payments which ends up costing me an additional $74K in interest and morality charges over 20 years of monthly payments.

Total interest for my buy back was $148K + $74 K = $222,000. Is that not loan sharking???

Consider your best five years would be your last five years (possible promotion in that 5 years, pay raises, incentive increases). My best five years was 1988 to 92, and I CRA in Aug 07. That's because of the 7% CI.

In simple terms, they are streching the truth. The DND spin.

 

[Ed]

Rifleman, did you get my msg?