Public service pension options

The benefits you will be entitled to when you leave the public service depend on your age and the number of years of pensionable service you have accumulated.

You may be eligible to receive a public service pension benefit after you have been a member of the pension plan (have pensionable service) for an uninterrupted period of two years. This means that you will receive the value of your own contributions plus those of your employer, along with the investment returns earned on both contributions. If you have been employed with the public service for less than two years, have been contributing to the public service pension plan and resign voluntarily, you are only entitled to a return of your contributions with interest.

For eligibility purposes, a year of part-time service counts as one year of pensionable service. Pension benefits are adjusted to reflect the assigned part-time hours.

Table of Contents

Pension Options

Retirement Age

The date when you became a member under the public service pension plan determines when you will be eligible to receive an unreduced pension benefit:

  • If you become a member on or before , you are eligible for an unreduced pension at age 60 with at least two years of pensionable service (or age 55 with 30 years of service); or,
  • If you become a member on or after , you are eligible for an unreduced pension at age 65 with at least two years of pensionable service (or age 60 with 30 years of service).
Figure 1: Pension eligibility at age 60 – Types of pension benefits
If you are the following age when you leave the public service… And you leave the public service with the following years of pensionable service You will be entitled to these benefits
Age 60 or over At least 2 years An immediate annuity: your accrued pension calculated according to the pension formula, payable immediately
Age 55 or over At least 30 years An immediate annuity
Age 50 up to 60 At least 2 years

A deferred annuity: your accrued pension calculated according to the pension formula, payable at age 60

or

An annual allowance: a permanently reduced pension, payable as early as age 50.

Under age 50 At least 2 years

A deferred annuity payable at age 60

or

A transfer value: the value of your pension benefits, payable in a lump sum. This amount must be transferred to another registered pension plan or to a locked-in retirement savings vehicle

Any age Less than 2 years The return of contributions with interest
Figure 2: Pension eligibility at age 65 – Types of pension benefits
If you are the following age when you leave the public service… And you leave the public service with the following years of pensionable service You will be entitled to these benefits
Age 65 or over At least 2 years An immediate annuity: your accrued pension calculated according to the pension formula, payable immediately
Age 60 or over At least 30 years An immediate annuity
Age 55 up to 65 At least 2 years

A deferred annuity: your accrued pension calculated according to the pension formula, payable at age 65

or

An annual allowance: a permanently reduced pension, payable as early as age 55.

Under age 55 At least 2 years

A deferred annuity payable at age 65

or

A transfer value: the value of your pension benefits, payable in a lump sum. This amount must be transferred to another registered pension plan or to a locked-in retirement savings vehicle

Any age Less than 2 years The return of contributions with interest

If you are a Correctional Service Canada employee, some other Operational Service Provisions may apply.

Lay Off

If you have involuntarily ceased to be employed in the public service (under a work force adjustment (WFA) situation or layoff) before you are eligible to receive an unreduced pension benefit, and have completed 2 years of pensionable service, you will have the following options:

Employees who terminate involuntarily (i.e., layoff, WFA) who are eligible to receive an annual allowance benefit upon termination with at least 2 years of pensionable service and have been employed in the public service for a period or periods totaling at least 10 years, may be eligible to receive a pension waiver.

A pension waiver is the removal of the normal reduction to an annual allowance (reduced pension) that is applied because the individual, at termination, did not meet the age and service thresholds to receive an immediate annuity. (i.e., age 60 with at least two years of pensionable service or at least age 55 with at least 30 years of pensionable service).

For more information, refer to the following pages.

If you became a member of the public service pension plan on or before , refer to:

If you became a member to the public service pension plan as of , refer to:

A Deferred Annuity, an Annual Allowance or a Transfer Value … How to Choose

Depending on when you leave the public service, you may be entitled to more than one type of benefit. Before making a choice about your pension, make sure you evaluate the pros and cons of each option. Here are a few considerations you may want to take into account:

  • If you are interested in a deferred annuity, which is payable at a later prescribed date, you should estimate the long-term value of such benefit and compare it to an annual allowance, which is a reduced amount but payable immediately.
  • An annuity is less advantageous than a transfer value in the event of death at an early age. If you leave the public service before and choose the transfer value, you bear the investment risks once the money is transferred out of the plan.
  • In the likelihood that you would come back to the public service, it usually costs less to reinstate your pension than to buy back your service.

These are just a few considerations you may want to evaluate. Since the choice of pension benefit is an important decision, you may want to consult your financial advisor before making a decision.

Understanding Financial Needs

Estimating your future pension in order to compare your options is a key step in choosing the benefits that are right for you. Using your Pension and Insurance Benefit Statement and the Pension Calculator within the Compensation Web Applications, calculate your future pension with different years of pensionable service and different average salaries.

For example, if you are interested in an annuity, you should estimate the long-term value of a deferred annuity and compare it to an annual allowance, which is reduced but payable immediately. Depending on your situation, you could gain by choosing an annual allowance.

You must choose a pension option within one year of leaving the public service. If you do not make a choice within that time limit, you are deemed to have opted for a deferred annuity.

To ensure that you are making an informed decision, you may also want to consult the following:

  • The Government of Canada Pension Centre. A pension expert can provide you with information and assistance.
  • The Canada Revenue Agency. The tax consequences that apply to pensions are a major consideration in your retirement planning.
  • Your personal financial advisor.

Things to Consider...

Most likely, your public service salary is currently your main source of income. Your budget consists of your employment income minus your total expenses. Those expenses include work-related expenses (transportation, clothing, lunch, etc.), fixed expenses (home, insurance, rent, food, etc.) and other expenses (professional fees, health care, recreation, unforeseen expenses, etc.).

In order to make the right choice of option when you retire, it may be useful for you to estimate your financial requirements after you leave the public service. You first need to decide what you plan on doing when you retire. Are you going to participate in activities such as travelling, sports, school, etc.? Are you going to work? Will you work full-time, part-time or just occasionally?

When you have an idea of what your lifestyle will be, you will be able to estimate a provisional retirement budget and determine whether your future income–public service pension plan, Canada Pension Plan or Quebec Pension Plan, registered retirement savings plan, Old Age Security, savings, etc.–will be enough to cover your future expenses.

When you calculate your benefits, remember that:

  • Retirement benefits are taxable;
  • The bridge benefit portion of your public service pension will stop at age 65; and
  • Your needs will change with age.

You might also want to consider your life expectancy when determining how long you will need your pension income. Refer to the life expectancy table below as an indicator, but remember that these figures represent approximate averages that do not take into account your personal situation such as your state of health, your heredity, your lifestyle and your activities.

Figure 3: Life expectancy in Canada (Source: Statistics Canada–2012)
Life expectancy Male Female
at birth 78.5 yrs 83.1 yrs
at age 65 83.3 yrs 86.5 yrs
Report a problem or mistake on this page
Please select all that apply:

Thank you for your help!

You will not receive a reply. For enquiries, contact us.

Date modified: