Pension Benefit

Information: GCintranet disclaimer

This information is only accessible from inside the Government of Canada network.

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…

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 or her employer that he or she is thinking about retiring or terminating his employment within the public service, the Compensation Advisor will refer him or her to the "Your Public Service Pension and Benefits" website 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 - This site is only accessible to federal government employees, and only to federal departments and agencies. as soon as they are notified that the member is terminating their employment.

Pension Benefit Estimates

When a plan member requests a pension benefit estimate, the Compensation Advisor will refer him or her to "Your Public Service Pension and Benefits" website 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.

Benefit Entitlement at Termination

A plan member is considered to have become eligible for a benefit on the date on which he or she ceases to be employed, whether that benefit is payable immediately upon exercising his option or not until some 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 or she 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;
  • an Supplementary Death Benefit (SDB) estimate statement (if eligible);
  • a pension entitlement information document;
  • other required forms.

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

  1. Monthly benefits;
  2. Lump sum payments.

Depending on the plan member's age, length of pensionable service and reason for leaving the public service, he or she 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 basic formula for calculating the public service pension is:

2 % X Total Pensionable Service X Highest Average Salary (based on the best five consecutive years)

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 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.

There are provisions in place that allow for this reduction to be "waived" or set aside. To be eligible for a Waiver (unreduced 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.

The Pension Centre requires the original completed Pension Reduction Waiver Request form PWGSC-TPSGC 2429 - This site is only accessible to federal government employees, and only to federal departments and agencies. to certify the eligibility of employees for whom Treasury Board is the employer or the Pension Reduction Waiver Request form PWGSC-TPSGC 2429-1 - This site is only accessible to federal government employees, and only to federal departments and agencies. 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 or she is terminating due to work force adjustment and the Pension Centre has not received the PWGSC-TPSGC 2429, 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.

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 50.

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.

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.

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 or she 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 - This site is only accessible to federal government employees, and only to federal departments and agencies.. 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 or she ceases to be employed.

Example

  • Last day of pay is Friday February 19, 2010 (end of day or noon)
    SOS date is Saturday February 20, 2010
  • Last day of pay is Sunday April 18, 2010 (rotational employee - normal days of rest are Monday and Tuesday)
    SOS date is Monday April 19, 2010

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

This table describes the various 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

Form PWGSC-TPSGC 2386 - This site is only accessible to federal government employees, and only to federal departments and agencies.: Termination/Retirement Information

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

For Phoenix Organizations, please refer to the User Productivity Kit (UPK) for more information on how to complete Form PWGSC-TPSGC 2386.

For Non-Phoenix Organizations, please refer to the new SACCO 2017-001 for more information on how to complete Form PWGSC-TPSGC 2386.

Form - PWGSC-TPSGC 2020: Confirmation of Salary and Service - This site is only accessible to federal government employees, and only to federal departments and agencies.

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

Regional accounts (RPS):

If there is missing or conflicting data in the pension system, the Pension Centre may request certification on the Form - PWGSC-TPSGC 2020: Confirmation of Salary and Service - This site is only accessible to federal government employees, and only to federal departments and agencies..

Non-regional accounts (non-RPS):

The Pension Centre will request the salary and LWOP certification on the PWGSC-TPSGC 2020 for terminations requiring salary certification prior to the implementation of Release 2.0 of the Modernization project. The Pension Centre may also request salary and LWOP certification if there is a discrepancy after the implementation of Release 2.0 of the Modernization project.

This table is a description on how to fill out form PWGSC-TPSGC 2386

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 (Personnel Pay-Input Manual) PPIM 9-5-2 - This site is only accessible to federal government employees, and only to federal departments and agencies.
    • for non-RPS employers, refer to Data Capture Tool (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 - This site is only accessible to federal government employees, and only to federal departments and agencies.
    • 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 - This site is only accessible to federal government employees, and only to federal departments and agencies.
    • 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 - This site is only accessible to federal government employees, and only to federal departments and agencies.
    • 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.

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:

  1. Age 50 or over with at least 25 years of operational service - Immediate annuity
  2. Age 45 or over with at least 20 years of operational service - Annual Allowance