Executive summary – 2009 Public Service Pension Plan Survey

Perceptions of Pension Plan and Benefits Plans

The pension benefits offered by the federal government are important to most plan members, particularly in terms of their decision to continue working in the federal Public Service. Fully 93% attributed at least moderate importance to the pension plan in terms of their decision to keep working for the government (52% rated this as very important). Significantly fewer (68%) attributed this level of importance to the pension plan as a reason for joining the federal Public Service in the first place.

Almost three-quarters think the federal government pension plan is much better (26%) or better (47%) than plans offered by other employers. Very few (less than 5%) think the federal plan is worse than other plans. Eleven percent think the pension plan is about the same, while 12% are uncertain and did not provide a response.

When the focus shifts to the Public Service benefit plans (i.e. health care, dental care, disability), respondents once again attribute importance. However, the degree of importance is less than that attributed to the pension plan. In total, 86% attributed at least moderate importance to the benefit plans in terms of their decision to continue working in the federal Public Service.

Almost half (47%) think the federal government benefit plans are better than similar plans offered by other employers. Conversely, 17% view the federal benefits plans as worse than other plans.

Awareness and Knowledge

Most plan members (61%) described themselves as at least moderately knowledgeable about their benefits under the Public Service pension plan, although less than one-quarter felt they are definitely (18%) or very (5%) knowledgeable. Conversely, 36% characterized their knowledge as limited or non-existent.

Surveyed plan members exhibited varied levels of familiarity with different issues related to the pension plan. On the one hand, majorities claimed to be at least moderately familiar with four of these nine issues, including how to buy back pensionable service (78%), the maximum number of years of pensionable service (72%), contributions made under the pension plan (58%), and the benefit for survivors and the Supplementary Death Benefit (53%). At the other end of the spectrum, familiarity was significantly lower with respect to how pension assets are invested (11%), the coordination between the pension plan and CPP/QPP (34%), the different between a reduce and unreduced pension (35%), and transferring pension benefits to and from other employers' plan (40%). As well, 45% claimed to be at least moderately familiar with their entitlements should they become disabled.

Respondents were provided with a set of statements about the Public Service pension plan and asked to indicate whether they thought each statement was true or false. There is considerable variability in terms of the number of respondents who answered correctly. Heading the list in terms of items that were correctly answered were the following:

• 86% correctly answered that the pension amount is calculated based on years of pensionable service and salary of best 5 consecutive years.
• 73% correctly answered that the pension amount will increase annually to reflect increase in the CPI.
• 68% correctly answered that members may be able to increase pension benefits by "buying back" eligible prior service from another employer.
• 66% correctly answered that if they leave the Public Service, they may be able to transfer value of pension benefits to another employer's plan through transfer agreement.
• 60% correctly answered that upon reaching 65, pension benefits are reduced due to coordination with CPP/QPP.

Most members (76%) are aware that the basic formula used to calculate the pension of a plan member who works full-time is 2% multiplied by the number of years of pensionable service multiplied by the average salary for the five consecutive years of highest-paid service. Approximately one-quarter are unsure about the basic formula (22%) or provided an incorrect response (2%).

When asked to identify at which point plan members can receive an unreduced pension, 70% answered correctly (multiple responses were accepted). Half of the respondents correctly said that it is when they retire at age 55 with at least 30 years of pensionable service and  20% correctly said that they must be 60 years of age with at least two years of pensionable service. Nearly one-third (32%) incorrectly believe they are entitled to an unreduced pension when their age at retirement and pensionable service add to 85.

Just over half the members (51%) are aware that the maximum number of years a plan member can contribute to the plan is 35 years, while 30% said they did not know about the maximum number of contribution years.

Fully 90% of members are not aware of the eligibility requirements for a transfer value – 69% simply reported that they did not know and 21% provided an incorrect response. Just 10% correctly said that, to be eligible, a member must apply before age 50 and have at least two years of pensionable service.

Only 14% of respondents correctly said that a plan member's pension is reduced immediately if s/he becomes disabled and is entitled to receive Canada Pension Plan or Quebec Pension Plan Disability Benefits. The same proportion (14%) did not think this is the case, while 71% did not know whether these benefits can be coordinated with their pension plan.

Approximately one-third (34%) correctly said that plan members are entitled to a reimbursement of pension plan contributions when leaving the Public Service only when they have accumulated less than two years of pensionable service. Conversely, 45% are unsure about eligibility for this reimbursement, and 21% provided incorrect responses.

Almost half of plan members (48%) know that the protection offered by the Supplementary Death Benefit is two times the plan member's annual salary. Slightly less (43%) are unaware of the value of the Supplementary Death Benefit, while 9% said the value is something different.

Information Needs

The majority of surveyed plan members (62%) said they recalled receiving an annual statement with information on their pension plan and benefits within the past 12 months. Conversely, 29% did not recall receiving their annual statement (9% were uncertain). Most plan members who recalled receiving their annual statement (79%) feel that it has at least some of the information they need. Among the rest, 6% said that they do not consult their annual statement, and 5% that they do not understand the information on the statement.

Respondents were provided with a set of statements about the Public Service pension plan and asked to identify the extent to which they agreed or disagreed with each one. Overall, the picture that emerges is of a membership that values information about the pension plan and is interested in knowing more. In general, surveyed members would like more information about the plan, tend to trust the information they receive, do not think they have all of the information they need, but generally know where to go to get more information.

Focusing on the results in more detail, the level of agreement was highest for three issues – wanting to know more about the pension plan (82% agreed), trusting the information they receive about the pension plan (67%), and knowing where to get information about the plan (66%).

Somewhat fewer think they are able to easily find information on the plan (43%), get the information they need to understand the pension plan (39%), and understand the information they receive about the plan (38%). Just over one-third (36%) agreed that, as someone who joined the Public Service in mid-career, the plan addresses their needs.  Smaller proportions said they are aware of the retirement options available (28%), were informed about where they could get plan information when they joined the Public Service (25%), and felt they received all the information they needed about the plan when they joined (17%). Approximately half (48-53%), however, disagreed with each of these statements. Approximately three-quarters disagreed with the following statements: I choose not to inform myself about my plan at this point in my career (75%) and At this point in my career, I don't need to know about my plan (74%).

Communications Products

Respondents were asked to rate the usefulness of a number of products or individuals in terms of helping them understand the pension plan. Heading the list in terms of perceived utility was the Annual Pension and Benefits Statement and Guide: 61% identified this as being at least moderately useful (18% said it helped a great deal). Following this, almost half attributed a least moderate usefulness to the Your Pension Plan booklet (47%), and to colleagues (47%).  Somewhat fewer said the following were at least moderately useful to them – the Public Service Pension and Benefits Web Portal (44%), and information sessions (42%). Less than one-third attributed this level of usefulness to the other information resources, including their compensation advisor (30%), an independent financial advisor (28%), messages from their human resources sector or group (18%), and their manager or supervisor (12%).

When asked to identify their main source of information when they need to know something about the pension plan, 46% pointed to colleagues/friends. Almost as many, 42%, identified the Public Service Pension and Benefits Web Portal, while somewhat fewer cited human resources personnel in their organization (35%). Other sources of information identified with some frequency included the TBS website (18%), the PWGSC website (13%), their organization's intranet site (12%), and the PSP centre in Shediac, New Brunswick (12%). A further 5% identified the Government of Canada website. As well, 11% indicated that they have never sought information on the pension plan.

Fully 89% of surveyed plan members said it would be useful if more information about the pension plan were sent to them periodically. Respondents who indicated a desire for additional information were provided with a list of topics, and asked to identify the type of information they would like to receive. The vast majority (95%) expressed interest in receiving information about retirement benefits. Following this, 85% were interested in information about survivor benefits, while four in five would like information on the supplementary death benefits (80%) and disability benefits (79%). Also identified with considerable frequency were information about how the plan is managed (76%), contributions (73%), and protection from inflation (66%). The topics that generated the least interest were how to buy back pensionable service (51%) and transferring their pension to and from other employers (51%). In terms of how they would like to receive this information, two-thirds identified their annual statement. This was followed by information sessions (58%), through a website (50%), and meeting with an Human Resources/ compensation advisor (46%).

Perceptions of Pension Plan and Benefits Plans

Similar to the results for active members, the federal pension benefits are important to most retired plan members. Once again, however, this is much more likely to be the case in terms of their decision to continue working in the federal Public Service, and less relevant to their decision to join the federal Public Service. In total, 71% attributed at least moderate importance to the pension plan in terms of their continued working for the federal government (25% viewed this as very important), while 52% attributed this degree of importance to the plan as a reason for joining the Public Service in the first place.

Almost three-quarters (74%) think the federal Public Service pension plan is better than those offered by other employers (32% said much better). Less than 5% characterized the pension plan as worse than plans provided by other employers.

The results were similar with respect to post-retirement Public Service benefit plans (i.e. health care, dental care). Almost three-quarters (73%) said this was at least a moderately important factor in their decision to continue working in the federal Public Service, while significantly fewer (54%) attributed this level of importance to the plans in terms of their decision to join the Public Service.  

Slightly less than two-thirds (62%) think the federal benefit plans are better than those offered by other employers; almost 8% think the Public Service benefit plans are worse.

Awareness and Knowledge

Fully 89% of retired plan members view themselves as at least moderately knowledgeable about their entitlements under the Public Service pension plan (13% said very knowledgeable). Conversely, 10% rated their knowledge as limited or totally lacking.

Surveyed plan members exhibited varied levels of familiarity with the different issues related to the pension plan. Majorities claimed to be at least moderately familiar with three of these five issues, including benefits for survivors and the Supplementary Death Benefit (77%), eligible survivor and child benefits (73%), and coordination between the pension plan and CPP/QPP (64%). Familiarity was much lower with respect to the impact on pension entitlements should a plan member become disabled (40%), and lower still regarding the mandate of the Public Sector Pension Investment Board (21%).

As with active members, retired members were provided with a set of statements about the pension plan and asked to indicate whether they thought each statement was true or false. Once again, there is considerable variability in terms of the number of respondents who answered correctly. Heading the list in terms of items that were correctly answered were the following:

• 96% correctly answered that the pension benefit is indexed to reflect changes in the cost of living.
• 88% correctly answered that upon reaching 65, benefits are reduced due to the coordination with the CPP or QPP.
• 63% correctly answered that the Supplementary Death Benefit starts to decrease at age 66 by 10% per year to a minimum of $10,000 by age 75.
• 62% correctly answered that the federal government pension will not be reduced immediately if they choose to take an early CPP or QPP pension.

Respondents were presented with two hypothetical situations involving a plan member named Leslie. Slightly more than half (53%) correctly identified that if Leslie, a plan member, died at 55 years of age, Leslie's spouse would be eligible to receive 50% of his unreduced basic pension. However, 38% were uncertain about the amount the spouse would receive, while 9% offered incorrect responses.

Information Needs

Respondents were provided with a set of statements about the Public Service pension plan and asked to identify the extent to which they agreed or disagreed with each one. Similar to the situation with active members, the picture that emerges is of a membership that values information about the pension plan and is interested in knowing more. In general, retired members trust the information they receive about the plan, take the time to inform themselves about it, know where to go to get more information, understand the information they receive about the plan, and would like more information about it.

More specifically, the level of agreement was highest (three-quarters or more) for four issues – trusting the information they receive about the pension plan (85% agreed), the Public Service pension providing the majority of their retirement income (82%), knowing where to get information about the plan (77%), and understanding the information they receive about the plan (77%). Approximately two-thirds expressed agreement with each of the following issues: receiving all the information they needed about retirement before leaving the Public Service (66%), being able to easily find information on the plan (65%), wanting to know more about it (64%), and acknowledging that they get the information they need to understand the pension plan (63%). For all of these issues, the levels of disagreement were relatively low, ranging from 4% to 17%. As well, 78% disagreed with the premise that they choose not to inform themselves about the pension plan.

Communications Products

When asked to identify their main source of information when they need to know something about the pension plan, 54% said they contact the Public Service Pension Centre by phone. Somewhat fewer, 45%, identified websites of government departments, while 17% said they contact government departments by phone (presumably the department they worked for before retirement).  In total, 17% said they have never sought out information on the pension plan.

Retired plan members were asked about their awareness of a number of communications tools and products. Knowledge was highest (72%) for the newsletter, Your Pension and Benefits Liaison. As well, 63% said they know where to find the Public Service Pension and Benefits Web portal. Less than half said they knew that retired plan members can contact the Public Service Pension Centre by email (47%), or that they could change their address, beneficiary and other personal account information using online forms that can be downloaded and printed from the Public Service Pension and Benefits Web portal (43%).

Almost three-quarters (72%) expressed interest in receiving additional information about the Public Service pension plan. Only 28% were not interested in more information. Retired plan members who expressed interest in receiving more information about the pension plan were asked to identify the type of information that they would like to receive (n = 1,149). Topping the list were information about survivor benefits (83%) and the Supplementary Death benefit (76%). Also identified frequently were information about retirement benefits (58%), disability benefits (54%), inflation protection (52%), and how their plan is managed (49%). Smaller numbers were interested in information about contributions (20%), how to buy back pensionable service (15%), and transferring a pension to or from another employer (14%).

Retired plan members who expressed interest in receiving more information about the pension plan were also asked to identify their preferred method to receive the information. An annual newsletter in paper format was selected most often, identified by 40%.  However, 28% would prefer to receive the newsletter electronically. One-third (32%) said they would like to receive the information in both ways.