Canadian Armed Forces pension plan 

There are three different types of monthly pension benefits payable under both the part-time and full-time CAF Pension Plans.

Immediate Annuity; payable immediately at your release or pension membership termination;
Deferred Annuity; payable at age 60; and
Annual Allowance; a reduced pension payable as early as age 50.

Each pension benefit includes a lifetime pension payable until death, and a temporary bridge benefit payable from your date of entitlement until age 65, unless you become entitled to CPP or QPP disability benefits.

For Full-time members, the formula used to calculate your annual CAF pension is equal to 2% of your average salary for five consecutive years of your highest paid pensionable service, multiplied by your number of years and days of pensionable service. For periods of part-time pensionable service, the calculation is adjusted based on the number of actual days worked over a period of 365 days.

For Part-time members, the formula used to calculate your annual CAF pension is equal to 1.5% of your pensionable earnings, which are updated based on wage growth.

There are also 2 types of lump sum benefits payable under both plans:

Return of Contributions; payable to members who are not vested, with less than 2 years of pensionable service; and
Transfer Value; payable to members who are under age 50 at release or pension membership termination.

These benefits are all described in more detail later on in the presentation.

It is important to note for Regular Force members; your pension is triggered upon your release from the Regular Force, and for Reserve members; your pension benefit is triggered when you have completed a period of 12 months without earnings, or you have fully released from the CAF. Transferring from the Primary Reserve to the Supplementary Reserve does not constitute releasing from the CAF.

At what age can I receive an unreduced pension benefit?

For both the Part I and Part I.1 plans, you will be eligible to receive an immediate annuity when you have met one of the following criteria:

You have at least 25 years (9,131 days) of Canadian Forces Service; or
You are age 60 and have at least 2 years of pensionable service; or
You are age 55 and have at least 30 years of pensionable service; or
You are disabled, and:
Are a member of the Part I plan, with at least 10 years of pensionable service; or
Are a member of the Part I.1 plan with at least 2 years of pensionable service and meet the Income Tax Act (ITA) definition of disabled

If you became a Regular Force member on or before 28 February 2007, and you do not qualify for an immediate annuity under the current plan rules, you may be eligible to receive a grandfathered immediate annuity on release from the Regular Force if you have:

Completed at least 10 years of Regular Force pensionable service on March 1, 2007;
Completed an Intermediate Engagement (IE) 20 which began before March 1, 2007; or
Reached retirement age with no less than 10 years of Regular Force pensionable service;

In order to confirm if are eligible, and to obtain an estimate of your grandfathered immediate annuity, please contact the Government of Canada Pension Centre in writing. It is important to note that estimates for grandfathered immediate annuities cannot be obtained through the self-serve member portal.

If when you retire from the CAF, you are not entitled to an immediate annuity, you may be entitled to the Deferred Annuity if you have at least 2 years of pensionable service.

The Deferred Annuity is your entitlement at release or plan termination, but becomes payable at age 60. For example, if you retire at age 40, with 4 years of pensionable service, you are entitled to a deferred annuity, and you would begin receiving payment at age 60.

When entitled to a Deferred Annuity, you can choose receive a different benefit. You have the option to select an annual allowance, which becomes payable at any time after the age of 50, and is subject to a reduction that is determined based on your age and service at the time you make your option. You also have the option to choose a Transfer Value, if you are under age 50 at release, and you must make the option within one year of release or plan termination.

If you become entitled to CPP or QPP disability benefits before you reach age 60, you will be eligible to receive an unreduced pension that is payable immediately.

When the deferred annuity becomes payable, it will also be indexed, and you will be eligible to apply for insurance coverage for you and your family under the Pensioners' Dental Services Plan (PDSP) and the Public Service Health Care Plan (PSHCP).

After retirement, it is very important that you make sure your contact information is up to date with the Government of Canada Pension Centre, so that they are able to reach you when your pension becomes payable.

Annual Allowance

If you have at least two years of pensionable service to your credit when you retire, and you are not entitled to an immediate annuity, you have the option to convert your Deferred Annuity to an Annual Allowance.

You can make this option at any time after your release or plan termination. If you make the option prior to or on your 50th birthday, the Annual Allowance is payable at age 50. If you make the option at any time between the ages of 50 and 60, it is payable immediately.

The Annual Allowance will be reduced, based on your age and your pensionable service. The amount of the reduction depends on the date you make your option, and is approximately 5% for every year that you are under the age of 60, but may be less if you have at least 25 years of pensionable service.

It is important to note that the reduction is permanent, however, if you become entitled to CPP or QPP disability benefits, your Annual Allowance will be converted to an unreduced immediate pension, which will be adjusted for the amount of the Annual Allowance you have already received.

When the deferred annuity becomes payable:

The annual allowance will also be indexed at age 60, and you will be eligible to apply for insurance coverage for you and your family under the Pensioners' Dental Services Plan (PDSP) and the Public Service Health Care Plan (PSHCP).

All CAF members, including those serving in Quebec, contribute to the Canada Pension Plan (CPP).  Like most pension plans, contributions and pension benefits under the Canadian Forces Superannuation Act (CFSA) are coordinated with those under the CPP and QPP.

As a result of this coordination, pensions under the CFSA include a lifetime pension payable until death as well as a temporary bridge benefit payable until you reach age 65.

The bridge benefit is intended to supplement your pension income until you start receiving your CPP or QPP, normally at age 65.

The bridge benefit ends on the first of the month following your 65th birthday, or earlier if you start receiving CPP or QPP disability benefits before age 65.  If you become entitled to disability benefits under CPP or QPP, you must notify the Government of Canada Pension Centre immediately. Failure to do so will result in an overpayment of the bridge benefit that will need to be recovered.

It is important to remember that the calculation of benefits under the CPP or QPP is different from your CAF Pension Plan. The amount you will receive from the CPP or QPP may be different from the amount of the bridge benefit.

The diagram shown in this slide

Transfer value is:

Approximately nine(9 )times the annual pension payable at age 65 (plus applicable indexing); and
Any portion exceeding that limit is paid in cash or to an RRSP if you have sufficient room available.

The transfer value is a one-time lump sum payment representing the present value of your future pension benefit, which is determined using an actuarial calculation based on your deferred annuity that would have been payable at age 60.

If you are entitled to a Deferred Annuity, as you have at least two years of pensionable service to your credit, you have the option to convert your Deferred Annuity to Transfer Value. You must be under age 50, and you must make this option within one year of your release or plan termination.

The Income Tax Act places certain limits on the amount of the Transfer Value which can be transferred to a registered retirement vehicle without tax taken at source. The amount of the transfer value within the tax limit has to be transferred to a locked-in retirement savings vehicle, such as:
A Registered Pension Plan
A locked-in RRSP or Life Income Fund
An life annuity purchased through an authorized financial institution such as an insurance company

The portion of the Transfer Value payment that is outside the tax limit is paid to you in cash and is taxed at source. If you have available RRSP room, all or a portion of the outside amount may be transferred to your personal RRSP.

When you choose the Transfer Value:  It is important to note that there are no other benefits payable to you and your survivors. As well, you would no longer be eligible for coverage under the Public Service Health Care Plan (PSHCP) and the Pensioners' Dental Services Plan (PDSP).

If you are thinking of this option, we strongly encourage that you obtain counseling from a financial institution or a financial planner as you are responsible for any risks associated with your investments.

Who is entitled to pension indexing and how do I qualify?

All pensions, including survivor benefits, payable under the CAF Pension Plan are Protected from inflation. Your pension will only increase according to the cost-of-living, which is based on the Consumer Price Index as determined by Statistics Canada.

The first indexing adjustment will take place on 01 January immediately following the year in which you become eligible. The first adjustment will be pro-rated to reflect the number of full months remaining in the year after the month in which the first pension payment commenced, which is in addition to the applicable amount of indexing for the number of full years, not months, remaining up to the end of the year prior to the year of entitlement.  For example, if you were released in October 2014, and you are entitled to indexing in July 2018, you would receive two-twelfths of the cost of living for 2014 (for November and December 2014) plus the indexing for the complete calendar years of 2015 to 2017. Afterwards, the indexing will be added to your pension every January.

As indexing is directly related to the amount of pension you receive under the CAF pension plan, any adjustment to your pension will result in a corresponding adjustment in the indexing amount. For example, when the bridge benefit portion of your pension ends, the amount of indexing will be lowered as it will be based on the lifetime pension only.

If you become re-enrolled in the CAF your pension indexing may also be affected.

To qualify for pension indexing, you must be:

- A pensioner who is age 60 or more;
- A pensioner who is disabled;
- A pensioner who is between the age of 55 & 59 and your age and full years of service equal 85; or 
- A person receiving a survivor or child’s allowance.

In the event of your death, your spouse and your children may be entitled to monthly benefits, regardless of whether your death occurs while you are a member of the CAF or as an annuitant in receipt of a CAF Pension.

For a spouse to be eligible for this benefit, the marriage or common law relationship must have started prior to your 60th birthday.

The survivor's pension and children allowances are indexed.

For Full-Time members, the pension payable to your spouse will be for their lifetime and equals 50% of your unreduced pension. The survivor's benefit, or pension, will not be affected by the loss of the bridge benefit or any reduction that was applied to your pension as a result of an early retirement.

For Part Time members, the pension payable to your spouse will be for their lifetime and will equal 1% of your updated pensionable earnings. Children and students are entitled to survivor benefits. The survivor's pension and children allowances are also indexed to the cost of living.

As a Full-Time member, if you marry after age 60, your spouse is not entitled to a survivor's pension. However, you may choose to opt for the Optional Survivor Benefit. By reducing your own pension, this option will entitle your spouse to a survivor's pension. Upon your death, it is payable for the lifetime of your spouse and is indexed to the cost of living.

Your child may be entitled to a Child’s allowance if they are less than 18 years of age and children between the ages of 18 and 25 may also receive allowances if they are a full-time student

For Full-Time members, a child's allowance is equal to one fifth of the survivor benefit to a maximum combined amount of four fifths of the survivor benefit. If there are more than four children, the maximum combined amount payable may be divided among all eligible children. 

For Part-Time members a child's allowance is equal to 1/4 of the survivor benefit to a maximum combined amount of 1/2 of the survivor benefit. If there are more than three children, the maximum combined amount payable may be divided among all the eligible children.

If you marry after your 60th birthday, you may opt for the Optional Survivor Benefit.

There are three different types of monthly pension benefits payable under both the part-time and full-time CAF Pension Plans.

Immediate Annuity; payable immediately at your release or pension membership termination;
Deferred Annuity; payable at age 60; and
Annual Allowance; a reduced pension payable as early as age 50.

Each pension benefit includes a lifetime pension payable until death, and a temporary bridge benefit payable from your date of entitlement until age 65, unless you become entitled to CPP or QPP disability benefits.

For Full-time members, the formula used to calculate your annual CAF pension is equal to 2% of your average salary for five consecutive years of your highest paid pensionable service, multiplied by your number of years and days of pensionable service. For periods of part-time pensionable service, the calculation is adjusted based on the number of actual days worked over a period of 365 days.

For Part-time members, the formula used to calculate your annual CAF pension is equal to 1.5% of your pensionable earnings, which are updated based on wage growth.

There are also 2 types of lump sum benefits payable under both plans:

Return of Contributions; payable to members who are not vested, with less than 2 years of pensionable service; and
Transfer Value; payable to members who are under age 50 at release or pension membership termination.

These benefits are all described in more detail later on in the presentation.

It is important to note for Regular Force members; your pension is triggered upon your release from the Regular Force, and for Reserve members; your pension benefit is triggered when you have completed a period of 12 months without earnings, or you have fully released from the CAF. Transferring from the Primary Reserve to the Supplementary Reserve does not constitute releasing from the CAF.

At what age can I receive an unreduced pension benefit?

For both the Part I and Part I.1 plans, you will be eligible to receive an immediate annuity when you have met one of the following criteria:

You have at least 25 years (9,131 days) of Canadian Forces Service; or
You are age 60 and have at least 2 years of pensionable service; or
You are age 55 and have at least 30 years of pensionable service; or
You are disabled, and:
Are a member of the Part I plan, with at least 10 years of pensionable service; or
Are a member of the Part I.1 plan with at least 2 years of pensionable service and meet the Income Tax Act (ITA) definition of disabled

If you became a Regular Force member on or before 28 February 2007, and you do not qualify for an immediate annuity under the current plan rules, you may be eligible to receive a grandfathered immediate annuity on release from the Regular Force if you have:

Completed at least 10 years of Regular Force pensionable service on March 1, 2007;
Completed an Intermediate Engagement (IE) 20 which began before March 1, 2007; or
Reached retirement age with no less than 10 years of Regular Force pensionable service;

In order to confirm if are eligible, and to obtain an estimate of your grandfathered immediate annuity, please contact the Government of Canada Pension Centre in writing. It is important to note that estimates for grandfathered immediate annuities cannot be obtained through the self-serve member portal.

If when you retire from the CAF, you are not entitled to an immediate annuity, you may be entitled to the Deferred Annuity if you have at least 2 years of pensionable service.

The Deferred Annuity is your entitlement at release or plan termination, but becomes payable at age 60. For example, if you retire at age 40, with 4 years of pensionable service, you are entitled to a deferred annuity, and you would begin receiving payment at age 60.

When entitled to a Deferred Annuity, you can choose receive a different benefit. You have the option to select an annual allowance, which becomes payable at any time after the age of 50, and is subject to a reduction that is determined based on your age and service at the time you make your option. You also have the option to choose a Transfer Value, if you are under age 50 at release, and you must make the option within one year of release or plan termination.

If you become entitled to CPP or QPP disability benefits before you reach age 60, you will be eligible to receive an unreduced pension that is payable immediately.

When the deferred annuity becomes payable, it will also be indexed, and you will be eligible to apply for insurance coverage for you and your family under the Pensioners' Dental Services Plan (PDSP) and the Public Service Health Care Plan (PSHCP).

After retirement, it is very important that you make sure your contact information is up to date with the Government of Canada Pension Centre, so that they are able to reach you when your pension becomes payable.

Annual Allowance

If you have at least two years of pensionable service to your credit when you retire, and you are not entitled to an immediate annuity, you have the option to convert your Deferred Annuity to an Annual Allowance.

You can make this option at any time after your release or plan termination. If you make the option prior to or on your 50th birthday, the Annual Allowance is payable at age 50. If you make the option at any time between the ages of 50 and 60, it is payable immediately.

The Annual Allowance will be reduced, based on your age and your pensionable service. The amount of the reduction depends on the date you make your option, and is approximately 5% for every year that you are under the age of 60, but may be less if you have at least 25 years of pensionable service.

It is important to note that the reduction is permanent, however, if you become entitled to CPP or QPP disability benefits, your Annual Allowance will be converted to an unreduced immediate pension, which will be adjusted for the amount of the Annual Allowance you have already received.

When the deferred annuity becomes payable:

The annual allowance will also be indexed at age 60, and you will be eligible to apply for insurance coverage for you and your family under the Pensioners' Dental Services Plan (PDSP) and the Public Service Health Care Plan (PSHCP).

All CAF members, including those serving in Quebec, contribute to the Canada Pension Plan (CPP).  Like most pension plans, contributions and pension benefits under the Canadian Forces Superannuation Act (CFSA) are coordinated with those under the CPP and QPP.

As a result of this coordination, pensions under the CFSA include a lifetime pension payable until death as well as a temporary bridge benefit payable until you reach age 65.

The bridge benefit is intended to supplement your pension income until you start receiving your CPP or QPP, normally at age 65.

The bridge benefit ends on the first of the month following your 65th birthday, or earlier if you start receiving CPP or QPP disability benefits before age 65.  If you become entitled to disability benefits under CPP or QPP, you must notify the Government of Canada Pension Centre immediately. Failure to do so will result in an overpayment of the bridge benefit that will need to be recovered.

It is important to remember that the calculation of benefits under the CPP or QPP is different from your CAF Pension Plan. The amount you will receive from the CPP or QPP may be different from the amount of the bridge benefit.

The diagram shown in this slide

Transfer value is:

Approximately nine(9 )times the annual pension payable at age 65 (plus applicable indexing); and
Any portion exceeding that limit is paid in cash or to an RRSP if you have sufficient room available.

The transfer value is a one-time lump sum payment representing the present value of your future pension benefit, which is determined using an actuarial calculation based on your deferred annuity that would have been payable at age 60.

If you are entitled to a Deferred Annuity, as you have at least two years of pensionable service to your credit, you have the option to convert your Deferred Annuity to Transfer Value. You must be under age 50, and you must make this option within one year of your release or plan termination.

The Income Tax Act places certain limits on the amount of the Transfer Value which can be transferred to a registered retirement vehicle without tax taken at source. The amount of the transfer value within the tax limit has to be transferred to a locked-in retirement savings vehicle, such as:
A Registered Pension Plan
A locked-in RRSP or Life Income Fund
An life annuity purchased through an authorized financial institution such as an insurance company

The portion of the Transfer Value payment that is outside the tax limit is paid to you in cash and is taxed at source. If you have available RRSP room, all or a portion of the outside amount may be transferred to your personal RRSP.

When you choose the Transfer Value:  It is important to note that there are no other benefits payable to you and your survivors. As well, you would no longer be eligible for coverage under the Public Service Health Care Plan (PSHCP) and the Pensioners' Dental Services Plan (PDSP).

If you are thinking of this option, we strongly encourage that you obtain counseling from a financial institution or a financial planner as you are responsible for any risks associated with your investments.

When you retire from the CAF, you and your dependents may be entitled to health and dental group insurance benefits.

The Public Service Health Care Plan (PSHCP) coverage is available to annuitants who are receiving a pension based on no less than 6 years of pensionable service.

PSHCP coverage is available for your eligible dependents including survivors who are receiving an ongoing pension. The coverage and services offered to retired members residing in Canada are the same as the benefits for active members. If you are planning to reside outside of Canada, please contact the Government of Canada Pension Centre.

Annuitants are required to pay contributions for health coverage. Contributions will vary depending on whether you have single or family coverage, your level of hospital coverage and residency.

During your release process, you can choose to continue your existing coverage or change your level of coverage. Waiting periods may apply depending on when you make your request. 

Coverage from the Pensioners’ Dental Services Plan (PDSP) is also available to eligible annuitants and their eligible dependents including survivors who are receiving an ongoing pension. The coverage and services offered are similar to those offered to active members.

As an annuitant, you will be required to pay contributions for dental coverage and contribution rates may vary depending on the number of dependents. As a member of the PDSP, you and your eligible family members can coordinate dental benefits if they are a member of another dental plan. However, two members of the PDSP cannot coordinate benefits because one cannot be covered as both a member and as an eligible dependent.

It is important to note that if you become a member of the PDSP, you must remain a member for at least 3 complete calendar years before cancelling your coverage. The decision to cancel your coverage is irrevocable and you will not be permitted to rejoin the Plan if you change your mind at a later date.

You can enroll in both the PSHCP and PDSP at any time. If you do not apply within 60 days of your date of release or of becoming a survivor, a waiting period will apply.

For more information on enrollment, eligibility and contributions please contact the Government of Canada Pension Centre and for inquiries on benefits and claims, contact your insurance provider.

Pension Administration is carried out by the Public Services and Procurement Canada at the Government of Canada Pension Centre.  They provide pension administration services to all CAF members, pensioners and their survivors/dependants. 

In order to prevent delays in receiving your pension benefit, you should take the following steps:

Step 1: Plan Ahead.  Select a proposed release date and request a pension estimate from the Pension Centre. Confirm your leave entitlements at your unit orderly room and decide whether you will take your retirement leave or cash-out value. 

Step 2: Request your release date 6 months ahead. It is also important that your personal information is up to date, because the Pension Centre relies on the information in the military pay system. This includes your address and your language preference, so that the pension package you will receive will be correct.

Step 3: Complete your Initial Release Interview. One month prior to your last day at work, schedule your release interview. Bring your pension estimate with you and start your out-clearance.

Step 4: Request and Submit your Pension Forms.  You can request your pension package within 30 days prior to your release.  When you receive the package, complete all forms that are applicable to you and send them back to the Pension Centre within the 30 days.  If you don’t request the pension package prior to your release, the Pension Centre will automatically send it to you within 10 days after your release.  If you do not receive your package within 10 days after your date of release, contact the Pension Centre to follow up.

Step 5: Confirm your forms were received. About 10-15 days prior to your date of release, contact the Pension Centre to confirm that your pension forms were received.  Do this prior to your final interview and date of release.

Step 6: Complete your final interview. Attend your final release interview on your last day on duty and finalize your out-clearance. If you are taking retirement leave, your final release interview will be your last day in uniform. In this case, your date of release will be after your retirement leave has ended. 

Step 7: Receive your pension payment.  You should receive your first payment within 45 days of your date of release, that is if all of the required documentation is received by the Pension Centre.  If all necessary documentation has not been received, you will receive your first payment within 30 days from the day the Pension Centre has been provided with all required documentation.

You are invited to contact the Pension Centre by using your preferred means of communication:

As a reminder, you are encouraged to visit the CAF pension website where you can find more information and tools to help you plan for your retirement from the CAF.

The Government of Canada Pension Centre should be your first point of contact to address all your pension needs.

If you are experiencing issues that are causing delays in accessing your pension benefits, or information related to your pension plan, the Pension Liaison team can assist you

Our Pension Liaison team will review your case and liaise with the Pension Centre to ensure that your case is addressed and to prevent further delays with your pension.