# 2015-125 - Entitlement to Immediate Annuity on Completion of a Long Term Period of Service, Pension Benefits, Pension Entitlements

Case Summary

F&R Date: 2015–12–30

The grievor had incurred obligatory service and required new Terms of Service (TOS) to ensure he had sufficient years of service remaining. He signed an Intermediate Engagement of 25 years (IE25) ending 14 December 2028. Later, and without his knowledge or consent, TOS staff with the Directorate of Military Careers Administration (DMCA) amended the IE25 end date, shortening the offer by several months so that it reflected exactly 25 years from the grievor's enrolment date.

Because the grievor had several months of leave without pay (LWOP) at the beginning of his career, he then confirmed with a CAF pension expert that the new TOS end date would leave him short of the 9131 total days of paid CAF service required to qualify for an immediate annuity upon completion of an IE25. He then submitted his grievance, seeking a new TOS offer, or a guarantee that in the future he will be granted a TOS with enough paid service for him to qualify for an immediate annuity.

The Initial Authority (IA), the Director General Military Careers, found that it was appropriate for the DMCA TOS expert to correct the error found in the grievor's original IE25 offer, but agreed with the grievor that he should have been advised of the change made. The IA noted that the grievor would remain eligible for further TOS offers in future but stated that no offers would be made at this time as that would be unfair to his peers.

The Committee first commented on the IA's apparent lack of concern regarding the very significant pension issue raised by the grievor.

Next, the Committee explained the background behind some significant changes made to the Canadian Forces Superannuation Act (CFSA) in 2007, one of which changed the manner in which an immediate annuity is earned. In short, every day within ones IE25 must meet the definition of CAF paid service in order to qualify for an immediate annuity on completion of one's IE25. With the exception of LWOP for maternity and parental leave, even a single day of LWOP will cause a member to fall to qualify.

The Committee then found that the original signed IE25 offer was a strong and binding agreement between the CAF and the grievor, and recommended that his IE25 be amended to reflect the original termination date signed by the grievor.

The Committee also raised a Systemic Recommendation for consideration by the CDS, regarding necessary changes to the CAF methodology for making IE25 TOS offers.

FA Decision Summary

The CDS agreed with the Committee's finding and recommendation that the grievor's IE25 be amended to reflect the original termination date signed by him.

The CDS also agreed with the Committee's systemic recommendation regarding necessary changes to the CAF methodology for making IE25 TOS offers. Though the grievance was the first on this matter to reach his attention, the CDS found that if nothing is done, numerous CAF members would find themselves in the same situation at the end of what they believe to be twenty five years of dedicated service. Therefore, the CDS asked CMP to release a CANFORGEN to inform members of the situation - this is particularly important for members who intent is to release at the end of an lE 25, amend the policy so that the IE25 is defined as 25 years of paid service and, set in motion a process to ensure that the personnel management systems reflect 9131 days of paid service as the end date for an IE25.