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Pension Benefit

The following information is intended to provide you, the Employer, with information concerning Pension Benefit activities.

Reference to Compensation Advisor in the following text is the equivalent of an Employer representative.

You may want to know…


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Introduction

The Government of Canada Pension Centre (Pension Centre) is now responsible for providing all the counseling on Retirement/Termination to plan members.

When a plan member advises his employer that he is thinking about retiring or terminating his employment with the public service, the Compensation Advisor will refer him to "Your Public Service Pension and Benefits" Web site or to the Pension Centre contact information. Please provide a copy of the "Contact Us - Your Public Service Pension and Benefits" information sheet for employees without access to the Web.

The Compensation Advisors are responsible for ensuring that the Pension Centre is aware of the plan member's termination of employment, and to input the Struck-Off-Strength (SOS) transaction. Compensation Advisors will also have to complete and forward the Termination/Retirement Information Form PWGSC-TPSGC 2386 as soon as they are notified that the member is terminating their employment.


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Pension Benefit Estimates

When a plan member requests a pension benefit estimate, the Compensation Advisor will refer him to "Your Public Service Pension and Benefits" Web site or to the Pension Centre contact information. Please provide a copy of the "Contact Us - Your Public Service Pension and Benefits" information sheet for employees without access to the Web.

When calling the Pension Centre, the plan member will be given the estimate over the phone by the Pension Expert. Only at the plan member's request will an estimate be provided in writing.

Plan members are also encouraged to use the secure or non-secure pension calculator available on the Web portal to estimate their pension benefit entitlement.


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Benefit Entitlement at Termination

A plan member is considered to have become eligible for a benefit on the date on which he ceases to be employed, whether that benefit is payable immediately upon exercising his option or at a future date.

A benefit entitlement cannot be determined or paid to a plan member until the cessation of employment date has been established and he has ceased to be employed.

When the Pension Centre is advised that a plan member has terminated his employment, or will be terminating in the near future, they will send a termination package directly to the plan member containing the following documents:

  • a pension benefit options statement;
  • a pension benefit estimate statement;
  • a Supplementary Death Benefit (SDB) estimate statement (if eligible);
  • a pension entitlement information document;
  • other required forms.

Note: The Compensation Advisor must inform the plan member to contact the Pension Centre in order to receive the termination package.

The date the employee became a member of the public service pension plan determines when he will be eligible to receive his pension benefit:

Plan Member on or before December 31, 2012

If the employee became a member of the public service pension plan on or before December 31, 2012, he is eligible to receive an unreduced pension benefit at age 60 with at least two years of pensionable service (or age 55 with 30 years of service).

There are two basic types of benefits available to plan members under the public service pension plan:

  1. Plan Member on or Before December 31, 2012 Monthly Benefits;
  2. Plan Member on or Before December 31, 2012 Lump Sum Benefits.

Depending on the plan member's age, length of pensionable service and reason for leaving the public service, he may be entitled to only one benefit or to a choice of benefits. Generally speaking, a plan member must have two years of pensionable service under the public service pension plan in order to be entitled to a choice of benefits.


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Monthly Benefits

The public service pension plan provides a lifetime pension payable until the plan member’s death and a temporary bridge benefit payable until age 65.

Generally, the formula for calculating the plan member’s pension is as follows:

Lifetime pension

The annual lifetime pension is based on the average salary for the five consecutive years of highest paid service and the years of pensionable service, as follows:

1.375%1 X average salary up to the AMPE2 X years of pensionable service (maximum 35 years)

PLUS

2% X average salary in excess of the AMPE2 X years of pensionable service (maximum 35 years)

Note: If the 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

If the plan member retires before age 65, he may also receive a bridge benefit payable until age 65 or until he becomes entitled to CPP or Quebec Pension Plan (QPP) disability benefits, whichever occurs first. The bridge benefit is calculated as follows:

0.625%3 X the average salary up to the AMPE2 X the years of pensionable service (maximum 35 years)

If the plan member is age 65 or older when he retires, the bridge benefit is not paid.

Total Pension

The plan member’s total pension (lifetime pension and bridge benefit) will be equal to 2 per cent of his average salary.

An Immediate Annuity (IA) is a full pension payable from the date the plan member ceases to be employed in the public service. A plan member is entitled to an IA at age 60 or over with at least two years of pensionable service or between ages 55 and 60 with at least 30 years of pensionable service.

A plan member who ceases to be employed under age 60 because of disability and has at least two years of pensionable service is also entitled to an IA.

An Annual Allowance (AA) is a reduced pension payable to a plan member who is between 50 and 60 years of age with at least two years of pensionable service. The reduction is to take into account early receipt of the benefit and is calculated according to age and/or service. An AA is payable from the later of the date of option, the date of termination or the plan member's 50th birthday. It is important to note that a plan member who is 50 years of age or over and wishes to receive an annual allowance at date of retirement must opt for the annual allowance prior to his retirement date.

There are provisions in place that allow for this reduction in pension to be "waived" or set aside. To be eligible for a Waiver (unreduced pension benefit), certain requirements need to be met:

  1. the employee's position must be declared "surplus";
  2. the employee must be entitled to an AA;
  3. the employee must be between age 55 and 59 (up to age 60);
  4. the employee must have at least 10 years of employment in the public service.


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The Pension Centre requires the original completed Pension Reduction Waiver Request form PWGSC-TPSGC 2429 to certify the eligibility of employees for whom Treasury Board is the employer or the Pension Reduction Waiver Request form PWGSC-TPSGC 2429-1 to certify the eligibility of employees for whom Treasury Board is not the employer. The form must be authorized by the Deputy Head or the delegated authority for the employing department to process an Annual Allowance with a waiver of the reduction.

If the Pension Centre is advised by a plan member that he is terminating due to work force adjustment and the Pension Centre has not received the PWGSC-TPSGC 2429 or PWGSC-TPSGC 2429-1, the Pension Expert will provide an option statement with the reduction and a second pension estimate based on an unreduced pension, in the event the request for the pension waiver is approved.

A Deferred Annuity (DA) is a full pension payable at age 60 when a plan member retires prior to age 60 and has at least two years of pensionable service.


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Lump Sum Benefits

A Return of Contributions (ROC) is a refund of the contributions paid by the plan member plus interest. An ROC is available to plan members with less than two years of pensionable service.

Note: If an employee is re-employed as a member of the public service pension plan after having received a return of contributions he would be covered under the post-2013 plan terms where the normal retirement age is 65. To learn more, visit the Information concerning changes to the public sector pension plans page of the Treasury Board Secretariat’s Web site.

A Transfer Value (TV) is a lump sum amount representing the present value of the plan member's future pension entitlement. A TV is available to plan members with at least two years of pensionable service who cease to be employed prior to age 50.

Note: If an employee is re-employed as a member of the public service pension plan after having received a transfer value, he would be covered under the post-2013 plan terms where the normal retirement age is 65. To learn more, visit the Information concerning changes to the public sector pension plans page of the Treasury Board of Canada Secretariat’s Web site.

A Cash Termination Allowance (CTA) is a lump sum payment based on the plan member's final monthly salary and length of service, minus the amount of Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) contributions. It is available to plan members who cease to be employed under certain exceptional situations.

A Capitalized Value is a lump sum that can be paid where the basic amount of the pension (i.e. excluding indexing) is less than 2% of the Yearly Maximum Pensionable Earnings (YMPE).


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Plan member on or after January 1, 2013

If the employee became a member of the public service pension plan on or after January 1, 2013, he is eligible to receive an unreduced pension benefit at age 65 with at least two years of pensionable service (or age 60 with 30 years of service).

There are two basic types of benefits available to plan members under the public service pension plan:

  1. Plan Member on or Before January 1, 2013 Monthly benefits;
  2. Plan Member on or Before January 1, 2013 Lump sum payments.

Depending on the plan member's age, length of pensionable service and reason for leaving the public service, he may be entitled to only one benefit or to a choice of benefits. Generally speaking, a plan member must have two years of pensionable service under the public service pension plan in order to be entitled to a choice of benefits.

Monthly Benefits

The public service pension plan provides a lifetime pension payable until the plan member’s death and a temporary bridge benefit payable until age 65.

Generally, the formula for calculating the plan member’s pension is as follows:

Lifetime pension

The annual lifetime pension is based on the average salary for the five consecutive years of highest paid service and the years of pensionable service, as follows:

1.375%1 X average salary up to the AMPE2 X years of pensionable service (maximum 35 years)

PLUS

2% X average salary in excess of the AMPE2 X years of pensionable service (maximum 35 years)

Note: If the 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

If the plan member retires before age 65, he may also receive a bridge benefit payable until age 65 or until he becomes entitled to CPP or Quebec Pension Plan (QPP) disability benefits, whichever occurs first. The bridge benefit is calculated as follows:

0.625%3 X the average salary up to the AMPE2 X the years of pensionable service (maximum 35 years)

If the plan member is age 65 or older when he retires, the bridge benefit is not paid.

Total Pension

The plan member’s total pension (lifetime pension and bridge benefit) will be equal to 2 per cent of his average salary.

An Immediate Annuity (IA) is a full pension payable from the date the plan member ceases to be employed in the public service. A plan member is entitled to an IA at age 65 or over with at least two years of pensionable service or between ages 60 and 65 with at least 30 years of pensionable service.

A plan member who ceases to be employed under age 65 because of disability and has at least two years of pensionable service is also entitled to an IA.

An Annual Allowance (AA) is a reduced pension payable to a plan member who is between 55 and 65 years of age with at least two years of pensionable service. The reduction is to take into account early receipt of the benefit and is calculated according to age and/or service. An AA is payable from the later of the date of option, the date of termination or the plan member's 55th birthday. It is important to note that a plan member who is 55 years of age or over and wishes to receive an annual allowance at date of retirement must opt for the annual allowance prior to their retirement date.

There are provisions in place that allow for this reduction in pension to be "waived" or set aside. To be eligible for a Waiver (unreduced pension benefit), certain requirements need to be met:

  1. the employee's position must be declared "surplus";
  2. the employee must be entitled to an AA;
  3. the employee must be between age 60 and 64 (up to age 65);
  4. the employee must have at least 10 years of employment in the public service.

The Pension Centre requires the original completed Pension Reduction Waiver Request form PWGSC-TPSGC 2429 to certify the eligibility of employees for whom Treasury Board is the employer or the Pension Reduction Waiver Request form PWGSC-TPSGC 2429-1 to certify the eligibility of employees for whom Treasury Board is not the employer. The form must be authorized by the Deputy Head or the delegated authority for the employing department to process an Annual Allowance with a waiver of the reduction.

If the Pension Centre is advised by a plan member that he is terminating due to work force adjustment and the Pension Centre has not received the PWGSC-TPSGC 2429 or PWGSC-TPSGC 2429-1, the Pension Expert will provide an option statement with the reduction and a second pension estimate based on an unreduced pension, in the event the request for the pension waiver is approved.

A Deferred Annuity (DA) is a full pension payable at age 65 when a plan member retires prior to age 65 and has at least two years of pensionable service.

Lump Sum Benefits

A Return of Contributions (ROC) is a refund of the contributions paid by the plan member plus interest. An ROC is available to plan members with less than two years of pensionable service.

A Transfer Value (TV) is a lump sum amount representing the present value of the plan member's future pension entitlement. A TV is available to plan members with at least two years of pensionable service who cease to be employed prior to age 55.

A Cash Termination Allowance (CTA) is a lump sum payment based on the plan member's final monthly salary and length of service, minus the amount of Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) contributions. It is available to plan members who cease to be employed under certain exceptional situations.

A Capitalized Value is a lump sum that can be paid where the basic amount of the pension (i.e. excluding indexing) is less than 2% of the Yearly Maximum Pensionable Earnings (YMPE).

Date Employment Ceases

The effective date of ceasing to be employed in the public service or the Struck-Off-Strength (SOS) date is the day following the last day for which the employee receives remuneration.

Exceptions

  • Death in service

    If a plan member dies while still actively employed, the SOS is the day following the date of death.

  • While on authorized or unauthorized leave without pay (LWOP)

    The SOS date for a plan member who is on authorized or unauthorized LWOP is the day following the date the employer notifies the Pension Centre that the plan member has ceased employment. Where the Pension Centre is advised in advance, the termination is effective on the date of termination reported by the employer.

  • While on suspension

    The SOS for an employee who is on suspension is the effective date specified to the Pension Centre, in writing, by the Deputy Head of the department or agency.

  • Seasonal employment

    If an employee does not report for duty within ten days of the date of the start of the new season, the SOS is the first day of the new season.


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Since salary is paid on a compensatory day basis, an employee whose normal work week is from Monday to Friday cannot cease to be employed on a Sunday or a Monday. If an employee's work week is other than from Monday to Friday, (e.g. rotational employee) he must have been required to work the day prior to his SOS date and his usual days of rest should be indicated on the Form PWGSC-TPSGC 2386. If the employee works up to the end of the work day on a Friday, or until noon, then Saturday is the effective date on which he ceases to be employed.

Example

  • Last day of pay is Friday February 15, 2013 (end of day or noon)
    SOS date is Saturday February 16, 2013
  • Last day of pay is Sunday April 21, 2013 (rotational employee - normal days of rest are Monday and Tuesday)
    SOS date is Monday April 22, 2013


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Struck-Off-Strength (SOS) Transaction

The Compensation Advisors are responsible for ensuring that the Pension Centre is aware of the plan member's termination of employment by completing the SOS transaction in the Regional Pay System (RPS) or the Data Capture Tool (DCT). The plan member's termination date and reason have to be reported using the proper codes.

SOS date is entered as YYYY/MM/DD with AM/PM Indicator (1 for AM and 2 for PM).

SOS Reasons Used for Termination/Retirement

SOS Reason Code Description DCT RPS
01 Resignation - outside employment X X
02 Resignation - return to school X X
03 Resignation - personal reasons X X
04 Resignation under the Work Force Adjustment Program X X
05 Discharge for misconduct X X
06 Release for incompetence or incapacity X X
07 Cessation of employment Subsection 30(4) of the Public Service - Employment Act (PSEA)   X
08 Dismissed by Governor-in-Council   X
09 Rejected during probation X X
10 End of specified term X X
11 Laid off X X
12 Abandonment of Position X X
13 Retirement Illness X X
15 Retirement Age 50 and Over with 2 Years of Pensionable Service X X
16 Revocation of Appointment X X
17 Death X X
18 Cessation of Order-in-Council, Change of Ministry   X
19 Employee of a department where Treasury Board is the Employer hired by an organization other than Public Service Staff Relations Act (PSSRA) 1.1 where Treasury Board is not the Employer   X
20 House of Commons employee released by a Member of Parliament or House of Commons Management   X
21 House of Commons employee whose employment is terminated at management's request   X
22 Dismissal X X
25 House of Commons employee whose employment is terminated because a Member of Parliament is not seeking re-election   X
26 House of Commons employee whose employment is terminated because of a defeated Member of Parliament   X
32 Type "X" Employee who was Taken On Strength (TOS) followed by SOS, solely for the purpose of paying a retroactive pay adjustment   X
40 Early Retirement Incentive (ERI) - Employee is between the age of 50 and 54 inclusive X X
41 ERI - Employee is between the age of 55 and 59 inclusive X X
44 Resignation under the executive employment transition program   X
45 Resignation under the early departure incentive/civilian reduction program   X
46 Layoff, End of unpaid surplus status   X
47 Alternate Delivery Initiative (ADI) Termination - accept or refuse a type 1 job arrangement   X
48 ADI Termination - Accept or refuse a type 2 job arrangement   X
49 ADI Termination - Accept or refuse a type 3 job arrangement   X
50 Transferred to another Pay system or pay office Not within PWGSC Pay System   X
51 Privatization or devolution with severance pay X X


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Form PWGSC-TPSGC 2386: Termination/Retirement Information

This form is required for each termination/retirement case. It is a two-part form which must be completed and forwarded to the Pension Centre within 5 business days of a termination of employment transaction or within 5 business days of a request from the Pension Centre.

Part 1 has to be completed by the Compensation Advisor and sent to the Pension Centre. Once the account is finalized by the Compensation Advisor (i.e. termination payments, recoveries and overpayments are actioned), the Compensation Advisor sends a copy of the form to the Pay Office to complete/certify Part 2 of the form.

Field Description
Plan Member's Personal Information Enter the member's personal information.
Part 1
(To be completed by the Compensation Advisor)
Enter the department, the pay office, the pay list and SOS date.

Check the appropriate box if employee is required to work on weekends.

Check the "Initial Form" box and forward the initial form to the Pension Centre.

Once account is finalized, check the "Account Finalized" box, input the date sent to Pay Office and forward the copy to the Pay Office.

Part 1A
Final Salary / Pensionable Allowances
Report the plan member's final salary, classification, authority for final salary (i.e. collective agreement), date of authority and any applicable pensionable allowance.
Part 1B
Debt to the Crown
If there is a possibility that a debt to the Crown will need to be recovered from a pension payment, it must be reported in this section.
Part 1C
Deduction
Report the amount, month of last deduction and policy number of all applicable deductions taken from the employee's pay.
Part 1D
Compensation Advisor Certification
Indicate your name, e-mail address, telephone and fax numbers and then sign and date the form certifying that the information is correct.
Part 2
(To be completed by the Pay Office)
Part 2 must only be completed once the account has been finalized by the Compensation Advisor.
Part 2A
Service Buyback(s)
Report service buyback monthly deductions.

Regional pay office must only report deductions for Fund 1/Fund 2 service buybacks and only up to September 30, 2003. Non-regional pay offices must report deductions until the implementation of Release 2.0 of the Modernization Project.

If service buyback payments were recovered from a retiring allowance, indicate the amount and date of recovery.

Part 2B
Debt to the Crown
If a debt to the Crown exists, report the recovered amount and amount still owing.
Part 2C
Pension Adjustment (PA) Amounts
Report the PA amount for the year of termination only.
Part 2D
Periods of LWOP and Outstanding Pension Contribution Deficiencies
If applicable, report periods of LWOP and indicate the contribution amount that was recovered (full or partial payment).

Report the amounts of any outstanding LWOP deficiencies.

Part 2E
Outstanding SDB Deficiencies
If applicable, report any outstanding SDB deficiencies and indicate if full or partial payment was received.
Part 2F Pay Office Certification Indicate your name, e-mail address, telephone and fax numbers and then sign and date the form certifying that the information is correct.


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Form - PWGSC-TPSGC 2020: Confirmation of Salary and Service

The PWGSC-TPSGC 2020 form Confirmation of Salary and Service must be completed by employing organizations upon request by the Pension Centre to certify salary, service and LWOP.

The form will only be requested under special circumstances and all transactions must be reported via the Regional Pay System (RPS) or the Data Capture Tool (DCT - non-RPS).

Field Description
Plan Member's Personal Information Enter the member's personal information.
Department Information
  • Enter the department or Crown Corporation's information.
  • If this is an amendment to the form, enter the date the previous PWGSC-TPSGC 2020 was sent.
Salary Data
  • Enter the applicable Entitlement/Deduction/Salary Adjustment (E/D/A) Code.
    • for RPS employers, refer to listing in PPIM 9-5-2
    • for non-RPS employers, refer to DCT User Guide.
  • Enter the "From" and "To" dates for each period of pensionable entitlement.
  • Insert the rate at which the authorized salary is paid.
    • for RPS employers, refer to table in PPIM 18-6-2
    • for non-RPS employers, refer to DCT User Guide.
  • Insert the rate-amount: the authorized pensionable salary or allowance amount for the period.
  • Enter the Pay Office and the Department codes.
  • DR: indicate if period is a dual remuneration case ("0" for no and "1" for yes).
  • Enter the SWW and AWW for the period.
  • Non-SWW: indicate whether or not the employee is working a non-standard work week ("1" for yes, "2" for no and "3" for a SWW non-regular Monday to Friday)
  • Insert the pension type (PT) code.
    • for RPS employers, refer to field 39 in PPIM 3-5-3
    • for non-RPS employers, refer to DCT User Guide.
  • When reporting non-revised salary data, provide the date of the collective agreement applicable to the salary rate.
LWOP Data
  • Enter leave without pay (LWOP) periods - "From" and "To" dates and number of hours.
  • Indicate LWOP reason code.
    • for RPS employers, refer to Table of codes in Remark 7 of PPIM 4-4-13
    • for non-RPS employers, refer to DCT User Guide.
  • Enter the Pay Office and the Department codes.
  • Enter the period for which the data was provided.
Certification Indicate your name, telephone and fax numbers and then sign and date the form certifying that the information is correct.


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Operational Service (Correctional Service of Canada)

Some plan members who work or worked in operational service (e.g. Guards at Correctional Service institutions) may be subject to a special Correctional Service Canada (CSC) plan. Plan members who meet the operational service requirements are required to pay extra contributions. However, the age/service thresholds and entitlements allow these plan members to retire earlier than regular plan members. The department (CSC) must certify operational service, deemed operational service, and operational service absences so that the Pension Centre can verify eligibility.

The age/service thresholds and entitlements for the CSC plan are determined based on the date of termination as follows:

Termination of employment prior to May 30, 2006 (no distinction made between actual and deemed operational service)

  1. Age 504 or over with at least 25 years of operational service - Immediate Annuity
  2. Age 454 or over with at least 20 years of operational service - Annual Allowance

Termination of employment on or after May 30, 2006 (a distinction is made between actual and deemed operational service)

Actual operational service only:

  • At least 25 years of actual operational service (regardless of age): Immediate Annuity
  • At least 20 years but less than 25 years of actual operational service (regardless of age): Annual Allowance5

Combination of actual and deemed operational service:

  • Age 504 or over and
    • at least 25 years of actual and deemed operational service combined: Immediate Annuity
    • at least 20 but less than 25 years of actual and deemed operational service combined: Annual Allowance5
  • At least age 454 but less than age 504 and:
    • at least 20 years total operational service, including at least 10 but less than 20 years actual operational service, plus some deemed operational service: Annual Allowance5
    • at least 20 years but less than 25 years actual operational service, plus some deemed operational service: Annual Allowance5
    • at least 25 years actual operational service, plus some deemed operational service: split operational benefits (an Immediate Annuity based on the actual operational service only, plus an Annual Allowance5 based on the deemed operational service only)

NOTE: CSC employees that become new plan members on or after January 1, 2013 and employed in actual operational service will contribute the same rates as those plan members who joined pre-2013. In addition, new plan members who become employed in deemed operational service continue to contribute the additional premium of 0.62%. Therefore, plan members in operational service at CSC are not affected by these changes to the pension contribution rates.


  1. This percentage applies if the plan member will reach age 65 in 2012 or later, i.e. he was born in 1947 or later. The percentages if the plan member was born before 1947 are indicated below:
    • Before 1943: 1.3%
    • 1943: 1.315%
    • 1944: 1.330%
    • 1945: 1.345%
    • 1946: 1.360%
  2. This value, set by the Canada Pension Plan (CPP), is the average maximum pensionable earnings (AMPE) for the year of retirement.
  3. This percentage applies if the plan member will reach age 65 in 2012 or later, i.e. he was born in 1947 or later. If the plan member was born before 1947, the applicable percentages are indicated below:
    • Before 1943: 0.700%
    • 1943: 0.685%
    • 1944: 0.670%
    • 1945: 0.655%
    • 1946: 0.640%
  4. The age threshold for an operational benefit is the age upon ceasing operational service.
  5. Operational Annual Allowances are reduced according to the applicable formula.