There are other factors to consider before making a decision about your pension:
If you opt to receive a monthly pension benefit, now or in the future, your eligible survivor and children will be entitled to an allowance in the event of your death.
A survivor's allowance is payable to a legal spouse or to a common-law partner with whom you have lived in a relationship of a conjugal nature for at least one year, as long as that relationship began prior to your retirement from the public service and continued without interruption until your death. For children to be eligible for an allowance, they must be under age 18 or a full-time student between 18 and 25 years or age. To be eligible, the child must have been born before retirement.
If you marry after retirement, your survivor would not normally be entitled to an allowance. However, you may choose to provide your survivor with a benefit by taking a reduction in your own pension. You must apply for this coverage within one year from the date of your marriage or one year from the date your pension commences, whichever is later.
Here are some examples to illustrate:
Should you choose a lump sum benefit payment, your survivors will not be entitled to survivor benefits.
Additional information on survivor benefits may be obtained from the When Death Occurs Web page.
If you opt for a monthly pension benefit under the public service pension plan, your pension will consist of 2 parts:
The bridge benefit is only payable for a specified period because the public service pension formula has been adjusted to reflect the requirement to participate under CPP/QPP.
It is important that you complete a Pension Information Release (PWGSC-TPSGC 2265) form to confirm whether or not you are in receipt of a disability benefit from the Canada or Quebec Pension Plan (CPP/QPP) prior to age 65. Until the Pension Centre receives the form indicating that you are not in receipt of a disability benefit, the Centre will assume that you are receiving disability benefits from the CPP/QPP and the bridge benefit amount will not be paid to you from your date of entitlement or date of termination, whichever is later.
For information on the Canada or Quebec Pension Plan, please contact their office. Information about the Canada Pension Plan may be obtained from the Service Canada Web site.
Information about the Quebec Pension Plan may be obtained from the Quebec Pension Plan Web site.
This Government of Canada monthly benefit is payable to all persons aged 65 or more who satisfy certain conditions of residency.
Information about the Old Age Security may be obtained from the Service Canada - Old Age Security Pension Web page.
If you are re-employed in the public service before having made your pension benefit option, you cease to be entitled to exercise an option until you cease employment again.
If you are in receipt of an ongoing pension benefit and choose to become re-employed in the public service as a plan member, your monthly pension, (including indexing if applicable) will cease. You cannot receive a pension under the public service pension plan and accumulate pensionable public service simultaneously. If however, you are re-employed in a position that does not require you to become a plan member of the public service pension plan, you can receive both your pension and the salary from your new position.
You should note that if you become re-employed as a plan member, your pension entitlement may be negatively affected in several ways. First, indexing would be calculated based on your most recent termination date and you would lose any annual cost-of-living increases you may have accumulated. In addition, if you were receiving an annual allowance previously, your future benefit may be reduced, when you cease to be re-employed, to take into consideration the length of time you received the annual allowance.
Due to the potential impact of re-employment on your pension entitlement and the indexing payable on your pension, it is highly recommended that you consult the Pension Centre before becoming re-employed in the federal public service. You should ensure that you understand how your re-employment will affect your pension benefit entitlement. Re-employment may also affect your coverage under the Supplementary Death Benefit Plan, the Public Service Heath Care Plan and the Pensioners' Dental Services Plan.
If you have any prior pensionable service that may be purchased under the public service pension plan, keep in mind that this service must be bought back prior to ceasing your employment in the public service. Service buybacks increase pensionable service time, which may increase the value of your pension benefit or change your pension benefit options.
For additional information, refer to the Service Buyback Package.
If you are currently paying for a service buyback from your salary, this monthly payment will continue from your immediate monthly pension benefit. Otherwise, your monthly payments should be sent directly to the Pension Centre until you become eligible to receive a pension or become re-employed as a plan member.
You may choose to delay payment until your deferred pension becomes payable at age 60. However, it is important to note that if you choose this method, interest of 4% per year is charged on your defaulted payments. This may result in a substantially higher monthly amount to be deducted from your pension when it becomes payable.
You may choose to pay the balance of your service buyback using termination payments payable by your employer. Please advise us if you wish to pursue this payment method, and we can provide you with an estimate of the balance owing on your service buyback. A copy of this information must then be provided to your compensation advisor for recovery action.
You can make a lump sum payment at any time to either pay off your balance owing, decrease your monthly payment amount or shorten your repayment period. You may also increase the amount of your monthly payment at any time to shorten your repayment period.
If you are on leave without pay at date of termination, you have the option of not counting as pensionable service the leave without pay period which extends after the first three months. In order to exercise this option, you must complete an Election Not to Count Leave Without Pay as Pensionable Service (PWGSC-TPSGC 2480) form and forward it to your compensation advisor prior to your official termination date. This choice will not be valid if you sign it after ceasing to be employed.
If you have any public service pension plan and/or Supplementary Death Benefit contributions owing due to a period of leave without pay or for any other reason, these must be paid. If you choose not to count your leave without pay in excess of three months, only the amount of deficiencies for the first three months must be paid. You would have the following repayment options:
Note: The Pension Centre will provide you with an estimate of the amount of contributions owing for public service pension plan and Supplementary Death Benefit. However, if you wish to have the amounts owing recovered from a termination payment payable by your employer, you must advise your compensation advisor.
If your employer informs the Pension Centre that you owe a debt to the Crown, such as overpaid salaries and allowances, these amounts will be recovered from your pension benefit. You will be advised of such recovery in writing.
A direct deposit service is offered to pensioners. This service offers the automatic deposit of monthly pensions to your bank account. The first pension payment will be issued as a paper cheque and direct deposit should commence the following month. At the time of making your option, you will be required to complete paperwork and enclose a void cheque to start your direct deposit service. Your pension cheque will then be deposited to your bank account on the third last banking day of the month.
If you opt for an ongoing pension, income tax (federal and provincial) will be deducted at source based on your province of residence (for non-residents, based on the country of residence). If you wish to claim more than the basic personal amount, you must complete the Personal Tax Credits Return (TD1) form and the applicable provincial or territorial form, which can be found at TD1 forms.
If you already had an existing Canada Savings Bonds deduction from your salary prior to termination, you may choose to continue to have this deducted from your monthly pension. However, Canada Savings Bonds deductions cannot be transferred to a RRSP once you become a pensioner.
If you opt for an ongoing benefit payable immediately (immediate annuity or immediate annual allowance) you may have the remaining deductions pledged as an employee deducted from your monthly pension.
You may also choose to complete your pledge by making payments directly to the Government of Canada Workplace Charitable Campaign. Arrangements can be made by contacting 613-228-6700. More information can be found on the Campaign's Web site.
The Federal Superannuates National Association is a non-profit organization bringing together pensioners from the public service, the Canadian Forces and the Royal Canadian Mounted Police as well as spouses and surviving spouses of these pensioners. The association promotes measures beneficial to its members and ensures that pensioners are kept informed with regard to their rights. More information can be found on their Web site Federal Superannuates National Association or by calling 613-745-2559.