Coronavirus disease (COVID-19) – Provisions providing flexibility: Public service pension plan (PSPP)

To: Public service pension plan members, The Government of Canada Pension Centre

The Government of Canada is reminding public service pension plan (PSPP) members that several existing provisions are available to provide flexibility that may be helpful during the coronavirus disease (COVID-19) pandemic. If you are having difficulty meeting your financial obligations or deadlines for pension-related transactions, contact the Government of Canada Pension Centre. The Pension Centre will explain the options that are available to you based on your circumstances.

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Service buyback

Canceling service buyback

If you are an active member you may cancel your service buyback only in unusual circumstances (such as the COVID-19 pandemic), and only if your monthly payment is more than 2% of your monthly salary.

If the cancellation is approved, you may be charged a fee for the insurance costs incurred while the service buyback was in force.

If you cancel a service buyback and later wish to have part or all of the same service recognized by the PSPP, the cost of the second service buyback will be based on your salary at that time.

Reducing service buyback payments

You cannot postpone your service buyback payments. You may only reduce your service buyback instalment amount by making a lump sum payment or transferring funds from a Registered Retirement Savings Plan, which would be applied to the cost of the buyback.

Extension of the deadline for undergoing a medical examination for service buyback

With a few exceptions, you must undergo a medical examination either six months before or one year after the day on which you notify the Pension Centre of your decision to buy back a period of pensionable service. If, for reasons beyond your control, you are unable to undergo the medical examination, you will be given another six months to undergo the examination.  

Leave without pay contributions

Reducing payments for pension contributions and Supplementary Death Benefit (SDB) premiums owed for a period on leave without pay (LWOP)

Active members

If you are experiencing financial difficulty, you may request to pay the outstanding pension contributions and SDB premiums over a period equal to three times the period of LWOP or 15 years, whichever is shorter. By extending the repayment period (which is typically equal to two times the period of LWOP), each payment will be reduced. 

Retired members

If you are experiencing financial difficulty, you may request to have your payments reduced to 15% of your gross monthly pension amount.

Pension transfer agreements

Extension of the deadline for requesting a pension transfer agreement

Requests for pension transfers from another plan into the PSPP must be made within the period mentioned in the specific employer’s agreement (usually one year), or within one year from the date the Pension Transfer Agreement is signed, whichever is later. If for some reason beyond your control you cannot submit the appropriate form to start this process within the prescribed time, the deadline may be extended upon approval by the Pension Centre.

Pension benefit options

Converting a deferred annuity to an annual allowance

Upon retirement, if you are not entitled to receive an immediate annuity, you must choose a pension option within one year of leaving the public service. If you do not submit your choice to the Pension Centre within that time, you will be deemed to have chosen a deferred annuity payable at either age 60 (Group 1) or age 65 (Group 2). However, you may at any time after having reached age 50 (Group 1) or age 55 (Group 2) convert your deferred annuity to an annual allowance.

Pension overpayments

Reducing payments for the recovery of pension overpayments

If you are experiencing financial difficulty, it is possible to have your overpayment recovery payments reduced from 10% to 5% (to a minimum of $10) of your gross monthly pension benefit until the overpayment is paid in full.

Required documentation

Extension of the deadline for submitting proof of age

When buying back pensionable service or terminating employment, the Government of Canada Pension Centre will require you to submit proof of your age (birth certificate or other valid proof). If providing proof of age is not possible due to extenuating circumstances, the deadline to provide acceptable proof may be extended.

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