# 2016-224 - Pension Benefits, Possible pension impact that results from the erroneous replacement of an Intermediate Engagement of 20 Years by new Terms of Service., Terms of Service

Case Summary

F&R Date: 2017–02–16

In order to discharge his obligatory service obligations resulting from his admission to subsidized education, the grievor was forced to accept a Continuing Engagement (CE) and prolong his Terms of Service (ToS). Contrary to the policy set out in Assistant Deputy Minister (Human Resources – Military) Instruction 05/05, The New Canadian Forces Regular Force Terms of Service (Instr 05/05), and to what the grievor believed, his acceptance brought to a premature end his Intermediate Engagement of 20 Years (IE20), which was replaced by the CE. This had the effect of making him ineligible under the protection provisions of the Canadian Forces Superannuation Act regarding entitlement to an unreduced immediate pension annuity after completion of 20 years of continuous service in the Canadian Armed Forces (CAF). The grievor maintained that he had not been advised of this ramification, and alleged that a mistake had been made in the calculation of his obligatory service, such that, in his opinion, he could have discharged his obligations without having to prolong his service. The grievor requested that his eligibility for an unreduced immediate pension annuity after completion of 20 years of service be restored.

The Initial Authority (IA) rejected the grievance, determining that the grievor had not suffered an injustice, be it in the administration of the subsidized education, the calculation of the obligatory service or the administration of his ToS. The IA maintained that the grievor had never been eligible for an unreduced immediate pension annuity under the protection clause, regardless of whether or not he had accepted the new ToS offered in relation to his admission to subsidized education. The IA also found that the grievor had not exercised his right set out in DAOD 5049-1 to request a reduction in his obligatory service within 12 months after completion of the course of study. Lastly, the IA found that despite any reduction in the period of obligatory service, it had no impact on the fact that the new terms were necessary for the grievor's admission to subsidized education.

The Committee determined that if the CE had not replaced the IE20, the grievor would have been eligible for an unreduced immediate pension annuity after completion of 20 years of continuous service as per the protection clause in paragraph 16.1(a) of the Canadian Forces Superannuation Regulations. Since his IE20 was prematurely replaced by the CE, the grievor's eligibility for an unreduced immediate pension was going to be either deferred to the age of 60 (nearly 23 years later in the grievor's case) or when he will have completed 25 years of service (9,131 days of paid service), which resulted in an additional 59 months than the current ToS. The Committee found this situation to be excessive and unreasonable, especially since the required prolongation of his ToS in order to discharge the obligatory service resulting from his admission to subsidized education was only 40 days.

The Committee determined that the relevant sections of Instr 05/05 clearly specify that in these circumstances the CE must follow but not replace the IE20, regardless of the date on which the military member signs the ToS form. Furthermore CANFORGEN 031/09 states that a CE is “projected,” in other words, that it may be accepted at any moment, but that it does not begin until completion of the IE20. The Committee therefore found that the way in which the CE was administered contravened the prescribed policy. Lastly, the Committee found that the grievor's request for a reduction in obligatory service was justified and reasonable.

The Committee recommended that the effective date of the CE offered to the grievor be modified to the day after the IE20 is completed, making him eligible under the protection clause. The Committee also recommended that the request for a reduction in obligatory service be granted.

Noting that the grievor may not be the only one in this situation, the Committee's made a recommendation of a systemic nature in this regard.

FA Decision Summary

The CDS agreed with the Committee's findings and recommendations. He stated that the implementation of the post-IE CE prior to the end of the IE was contrary to the CMP Instruction 05/05 and incorrect. The CE as administered was therefore invalid. He then noted that the forecast of the grievor's obligatory service in return for subsidized education had been calculated appropriately before he began his studies and that there was normally a time limit of 12 months after the end of the study program for requesting a recalculation. In this case, however, as this was a key element of the grievance, he found it reasonable to extend the time limit. He noted that the grievor's actual time in subsidized education had been two and a half months shorter than the forecast estimate, requiring five months less of obligatory service. He directed that the obligatory service period be amended to end on the earlier date. This meant that a post-IE CE was no longer necessary for the grievor. He directed that the CE be revoked in its entirety and that the grievor's IE20 be restored.

The CDS fully agreed with the Committee's systemic recommendations: apply CMP Instruction 05/05 and implement new TOS after the end of IE20s, not by cancelling IE20s; inform affected CAF members through a CANFORGEN or other formal correspondence of the implications of accepting new TOS beyond an IE20; and authorize DGMC to settle promptly and administratively all other similar cases involving the replacement of an IE20 by a CE, in the same spirit and with the same intention as the present case.