Amendments to the public service pension plan regulations effective June 23, 2016
In 2012, the Government of Canada amended the Public Service Superannuation Act to further align the public service pension plan with pension plans in the private and public sectors.
Consequently, the regulations under the Public Service Superannuation Act were amended. These amendments, which came into force on , will not affect the payment or calculation of your public service pension in any way.
These changes will be of particular interest if you have received a transfer value or transferred your pension to an outside employer’s pension plan, were then rehired and are continuing to work, or are thinking of rejoining the federal public service.
Cost to reinstate transfer value service
A transfer value is the calculated lump-sum value of your accumulated pension benefit that would be payable in the future. When you leave the public service, you may choose to receive a transfer value instead of a future monthly pension provided that:
- you have at least two years of pensionable service; and
- you became a plan member on or before , and are eligible to receive an unreduced pension benefit if you leave the public service at age 60, and are under age 50; or
- you became a plan member on or after , and are eligible to draw an unreduced pension benefit if you leave the public service at age 65, and are under age 55.
If you have received a transfer value and have become re-employed in the public service, you may be able to reinstate the pensionable service for which you received the transfer value.
In order to fairly incorporate the cost implications of the different retirement ages, the cost to reinstate a period of transfer value service is now based on the actuarial value of the additional service. This value is an immediate lump sum estimated to be equal in value to your additional future pension payments following the buyback. It may be lesser or greater than the amount of the original payment you received when you transferred your pensionable service out of the public service pension plan. The savings or additional costs will vary depending on your own circumstances, including your salary and the length of pensionable service that is being bought back.
The new methodology has been implemented to better reflect the cost of pensionable service bought back. Previously, you would repay the amount that was paid out for the transfer value, plus interest to the date of the service buyback, in order to reinstate a period of transfer value service.
Cost to reinstate pension transfer agreement service
A pension transfer agreement service is the period of service that a plan member has transferred from the public service pension plan to an employer outside of the public service who had an agreement in place with the Government of Canada to allow for this service.
The same costing method to reinstate periods of transfer value service now applies to members who choose to reinstate their pension transfer agreement service.
Extending the time period to make payments for reinstated transfer value or pension transfer agreement service
Starting in 2016, plan members who are notified by the Government of Canada Pension Centre of the certification of the past service pension adjustment will have 90 days from the notification date to make payments for the reinstated pensionable service. Previously, plan members had no later than 90 days to pay for the reinstated period of transfer value service after the request was received by the Government of Canada Pension Centre.
Time limitation to elect to reinstate a period of pensionable service
If you want to reinstate pensionable service for which you received a transfer value, you must make the election no later than one year after the Notification of Plan Membership (PWGSC-TPSGC 2018) was issued.
To reinstate a period of pensionable service that you transferred to an outside employer’s pension plan, you must make the election no later than one year after the Notification of Plan Membership (PWGSC-TPSGC 2018) was issued, if it is after .
To learn more about these types of service buybacks, visit the Public service pensionable service section on the Canada.ca website.
Extending the time period to undergo a medical examination for service buybacks
With a few exceptions, if you buy back a period of pensionable service, you will have to undergo a medical examination. As part of the regulation amendments, the time period to undertake a medical examination has been extended to six months before and one year after the date of election.
To learn more about the changes, please contact the Government of Canada Pension Centre.
Frequently Asked Questions – Changes to the public sector pension plans provides an overview of changes to the plans.
More information about the public service pension plan is available on Canada.ca/pension-benefits.
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