Reaching age 65 – Retired members - Pension

You may want to know…

• Why are the contribution rates under the public service pension plan co-ordinated with those under the Canada Pension Plan (CPP) or Quebec Pension Plan (QPP)?

  Your public service pension plan is coordinated with the Canada Pension Plan (CPP) or Quebec Pension Plan (QPP). When CPP and QPP were introduced on January 1, 1966, the federal government, like most Canadian employers offering a pension plan for their employees, decided to coordinate the new CPP and QPP with the public service pension plan so that its employees would not have to set aside a greater proportion of their salary for retirement savings. Since contributions were coordinated, pension benefits also had to be coordinated.

  As a result, your public service pension consists of the following:

  A lifetime pension

  – the permanent portion of your pension payable from the date your pension begins until your death; and

  A bridge benefit

  – a temporary amount payable from the date your pension begins until age 65 (earlier if you start receiving CPP or QPP disability benefits).

  Consult the Canada Pension Plan/Quebec Pension Plan Coordination for more information.

• When will your bridge benefit cease?

  If you retire before age 65, you will receive a bridge benefit payable until age 65. The bridge benefit will stop on the first of the month following your 65th birthday.

  However, if you begin receiving a Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) disability pension before age 65, your bridge benefit under the public service pension plan will cease immediately on the date that you become entitled to a CPP or QPP disability pension. It is your responsibility to inform the Government of Canada Pension Centre if you start to receive a disability pension under the CPP or QPP. If you omit to inform the Government of Canada Pension Centre, you will be required to repay any overpayments.

  If you retire after age 65 or are receiving CPP or QPP disability benefits, the bridge benefit is not applicable.

• What happens if I take my CPP/QPP before age 65?

  The bridge benefit will continue to be paid until age 65 even if you choose to receive an early CPP or QPP retirement benefit, before age 65. If you choose to receive the CPP or QPP pension before age 65, you will receive a reduced CPP or QPP pension. This means that you would receive a higher total pension income before age 65, because you would be receiving both a CPP or QPP benefit and a bridge benefit at the same time. At age 65, you would then notice a decrease in your total pension when your bridge benefit ends, because you are in receipt of an early (reduced) CPP or QPP benefit.^{Footnote 1}

• What happens if I take my CPP/QPP after age 65?

  The bridge benefit will continue to be paid until age 65 even if you choose to receive a late CPP or QPP retirement benefit, after age 65. If you choose to delay receipt of the CPP or QPP pension until after age 65, you will likely receive a reduced total pension income starting at age 65, when the bridge benefit ends, until you start receiving the CPP or QPP pension.

• Is my lifetime public service pension benefit impacted in any way if I choose to take my CPP/QPP before or after age 65?

  Aside from indexation, your lifetime public service pension benefit remains unchanged whether you choose to receive your CPP or QPP pension earlier or later than age 65.

• What is the formula for calculating your lifetime pension and bridge benefit under the public service pension plan?

  The public service pension plan provides for the payment of a lifetime pension payable until your death and a temporary bridge benefit payable until age 65 (earlier if you start receiving Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) disability benefits).

  Lifetime pension

  At retirement, you receive a lifetime pension. Your annual lifetime pension is based on your average salary of your five consecutive years of highest paid service and your years of pensionable service, as follows:

  1.375%^{Footnote 1} × Your average salary up to the AMPE^{Footnote 2} × Your years of pensionable service (maximum 35 years)

  plus

  2% × Your average salary in excess of the AMPE^{Footnote 2} × Your years of pensionable service (maximum 35 years)

  Note: If your pension includes part-time service, the benefits are adjusted to reflect the part-time assigned hours of work compared to the full-time hours of the position.

  Bridge benefit

  Note: Plan members who retire after age 65 or are already receiving CPP or QPP disability benefits do not receive the bridge benefit.

  0.625%^{Footnote 3} × Your average salary up to the AMPE^{Footnote 2} × Your years of pensionable service (maximum 35 years)

  Additional information and examples can be found in Pension Formula: Lifetime Pension and Bridge Benefit.

• Is the indexing payable on your pension affected when the bridge benefit ceases at age 65?

  The indexation (cost of living pension increases) payable on your public service pension before age 65 is directly related to the total amount of the public service pension you receive, that is, your lifetime pension plus the bridge benefit. When your bridge benefit ceases, whether at age 65 or if you start receiving Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) disability benefits, the indexing is calculated on your lifetime pension amount only, resulting in a reduction in the indexing payable.

• Is the survivor benefit payable to your survivors affected at age 65, when the bridge benefit normally ends?

  The survivor benefit is normally equal to half of your lifetime pension and bridge benefit. The survivor benefit is calculated at this rate even after the bridge benefit ceases which is normally at age 65. Your survivor can receive survivor benefits under the Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) and also receive a full survivor benefit under the public service pension plan.

• I have other questions about my pension and retirement income.

  Your income in retirement will come from many sources, such as your public service pension and your CPP or QPP benefit. It is recommended that you seek independent financial advice regarding your retirement income. For questions about your public service pension, you may contact the Government of Canada Pension Centre.