Benefits for Retired Members
June 2011 - Section 8

Re-employment

You may rejoin the federal public service with no effect on your pension benefits if you do not become eligible to contribute under the Public Service Superannuation Act. However, if you again become eligible to contribute under the Act, your pension payments will be suspended.

If you become a part-time employee in the public service, and you are assigned to work an average of 12 hours or more per week, you will automatically begin to contribute under the Act (providing all other eligibility criteria are met).

If you are age 71 or over when you become re-employed in the public service, your pension will be suspended if you meet the eligibility criteria to become a contributor under the Act. Your pension will be suspended even if you cannot actually contribute because of the tax rule preventing anyone age 71 or over from contributing to any pension plan.

If you voluntarily retire prior to age 60 after being re-employed as a contributor for a period of less than two years, the additional service cannot be used in the calculation of your pension. In such a case, the contributions paid during the period of re-employment will be refunded with interest.

You should note that if you become eligible to contribute again, your pension entitlement may be negatively affected in several ways. First, your date of retirement automatically changes and thus you lose any annual indexation (cost-of-living increases) you may have accumulated under Part-III of the Act. In addition, if you were receiving an annual allowance previously, when you cease to be re-employed, your pension will be reduced in relation to the length of time that you received the annual allowance. The amount of the reduction will not exceed the total amount that you received as an annual allowance before you became re-employed. Finally, if you had qualified for a waiver of the early retirement reduction and you become eligible to contribute again, you will not be entitled to a waiver of the reduction when your re-employment ceases unless you qualify again based on the circumstances at that time.

Employment as an independent contractor is not normally considered re-employment for pension purposes. Employment outside the federal public service will not affect your pension, provided you have not retired on grounds of disabled/disability.

Due to the potential impact on your pension, it is vital that you contact the Pension Centre before becoming re-employed in the federal public service, or if you have retired on grounds of disability, before accepting outside employment. You should ensure that you understand how your re-employment will affect your pension entitlement. Re-employment may also affect your coverage under the Supplementary Death Benefit Plan, the Public Service Health Care Plan and the Pensioners' Dental Services Plan.