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Buyback from two separate pension plans

KanD

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I am an active member under both the reservist 1.1 pension plan, and the Canadian Public Service Pension Plan. In total, I have eleven years of pensionable service combined.

I’m interested in undertaking a VOT in the Reg Force and wanted to know if I can legally buy back my pensionable service under both plans.

I tried asking this question to the Pension Centre, but they were unable to provide a response and said I would need to join the CAF Regular Member pension plan before a détermination could be made.

That’s why I’m also reaching out here for any insight.
 

dapaterson

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It's not a situation considered under either act or their associated regulations, and thus would require a lengthy determination.

Your I.1 service would require a top up under part 1. You would get the 1:1 credit for paid service for all class B and C, and 1.4:1 credit for paid service for all class A.

Your total enrolled time in the CAF would count towards pensionable service, that is, all time since enrollment with no pay would count towards your 35 year pensionable service limit, but give no benefits - so you would never be able to get a 70% CAF pension.
 

Weinie

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It's not a situation considered under either act or their associated regulations, and thus would require a lengthy determination.

Your I.1 service would require a top up under part 1. You would get the 1:1 credit for paid service for all class B and C, and 1.4:1 credit for paid service for all class A.

Your total enrolled time in the CAF would count towards pensionable service, that is, all time since enrollment with no pay would count towards your 35 year pensionable service limit, but give no benefits - so you would never be able to get a 70% CAF pension.
What about if he opted for CRA 65?
 

dapaterson

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CRA is irrelevant. Once you each 35 years of pensionable service, subsequent years may increase your average of the best five, but does not increase the amount of paid service. Pensions are based on years of paid service within the years of pensionable service.
 

Weinie

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CRA is irrelevant. Once you each 35 years of pensionable service, subsequent years may increase your average of the best five, but does not increase the amount of paid service. Pensions are based on years of paid service within the years of pensionable service.
But you stated he could never attain 70%. Am I missing something here? If he enrols at 30, and serves til 65, that would equate to 35 years of pensionable service.
 

dapaterson

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His enrollment date will be per the day he entered the Res F - on transfer to the Reg F, the enrolment into the part 1 pension plan is retroactively made to that date.

Therefore the 35 year limit begins on the date of enrollment into the CAF (regardless of component). Benefit on retirement is based on paid days of service with the 35 years of pensionable service. Therefore every unpaid day in the Res F within that 35 years decreases the maximum possible benefit.
 

Weinie

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His enrollment date will be per the day he entered the Res F - on transfer to the Reg F, the enrolment into the part 1 pension plan is retroactively made to that date.

Therefore the 35 year limit begins on the date of enrollment into the CAF (regardless of component). Benefit on retirement is based on paid days of service with the 35 years of pensionable service. Therefore every unpaid day in the Res F within that 35 years decreases the maximum possible benefit.
Got it.
 

dapaterson

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The confounding factor here is retroactive membership in two full time federal plans. That means each elapsed year in two plans counts as two years against the 35 year limit.

So, for example:

Age 17: Enrolled in the Res F and a member, in the CFSA part I.1 plan, for four years (while in University).
Age 21: Joined the federal PS at that point, becoming a member of the PSSA, while continuing in the Res F, for six years.
Age 27: Join the Reg F and automagically retroactively enrolled in the CFSA part I plan, eligible to top up previous part I.1 service to 100% value.

In this instance, if no other actions are taken:

Age 46: Will have original 4 years in Res F (pensionable service) plus 6 years (PSSA) plus 6 years (Res F parallel to PSSA) plus 19 years (Reg F) pensionable service, for a total of 35 Years - 29 under CFSA part I, 6 under PSSA.

The 29 years under CFSA part I will give a benefit of: (21 years Reg F +(days class B and C + (1.4* days class A))/365) * 2% (assuming full buyback of part I.1 service, otherwise that gets pro-rated) of the average of the best 5 years of salary when in the CAF.

The 6 years under PSSA will give a benefit of 6 * 2% = 12% of the average of the best 5 years of salary when in the PS. Note that this means any potential promotions which could have but did not occur will not be considered; any inflationary increases over time will not be considered; and there will be no ability to draw without penalty before age 65 (age 60 for those in the PSSA prior to the last round of changes). In other words - at age 65, pa rates of 40 years before will determine the initial amount (adjusted for indexing subsequently).


It is not permitted to have the same day counted twice under a single plan, so efforts to surrender the PSSA amount to CFSA may be problematic. It's possible that the optimal solution would be to take a transfer value for the PSSA time, as once you take a TV that time "disappears" so to speak from you pensionable service. However, every situation is different; the rules are unfortunately opaque and incomplete; and it is difficult to get a solid advisor on the phone to discuss these issues. When I went to a CAF run lunch and learn about pensions and asked about being a dual contributor to CFSA Part I and PSSA, the (civilian) pension expert from DPSP said "we don't talk about that".


There are other issues that are not resolved (I mean, the legislation was amended in 1999, the current rules largely came into force in 2007, so it's not like there hasn't been time to fix things). For example, a CAF member who wishes to surrender a CFSA part I pension to the PSSA and RCMPSA who, in their paid service has any paid class A service - no regulations in place to permit that transfer.
 

brihard

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For example, a CAF member who wishes to surrender a CFSA part I pension to the PSSA and RCMPSA who, in their paid service has any paid class A service - no regulations in place to permit that transfer.

Mm hm. CFSA I.1 (PRes pension) to any other Fed pension is broken too. Smart money for anyone with a PRes pension who ends up in PSSQ or RCMPSA is to cash out the commuted value from the PRes pension and dump it into RRSPs. Unfortunately that means the years of PRes service are abandoned for pension purposes.
 

rnkelly

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The 29 years under CFSA part I will give a benefit of: (21 years Reg F +(days class B and C + (1.4* days class A))/365) * 2% (assuming full buyback of part I.1 service, otherwise that gets pro-rated) of the average of the best 5 years of salary when in the CAF.
Is this supposed to be 19 years RegF?

Just want to make sure I’m following properly.
 
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