Your public service pension—Benefits for survivors
Table of contents
- Section 1: Government of Canada Pension Centre—Contact information
- Section 2: Your pension
- Section 3: Other benefits
- Section 4: Indexation
- Section 5: Public Service Health Care Plan
- Section 6: Pensioners' Dental Services Plan
- Section 7: Minimum benefit
This booklet is your guide to the benefits payable to you and your children under the Public Service Superannuation Act. Inside are details about your pension payment, annual increases to help offset rises in the cost of living, and other important pension topics. Please read this booklet carefully and retain it with your personal papers. From time to time, you will receive information bulletins and notices which will provide you with additional details; they should be kept with this booklet for future reference.
You and your children can turn to the Government of Canada Pension Centre (Pension Centre) for help with your questions about public service pension benefits and related matters.
This booklet is a general guide; should there appear to be any discrepancy between it and the relevant legislation, the legislation shall govern.
- Average annual salary
- Total salary received by the plan member during the highest-paid five consecutive years divided by five. Any salary revisions and lump sum payments which apply to periods of service before the best five-year period, are not included. In addition, overtime and certain other allowances are not considered as part of the average salary. Normally the average salary period is the last five years of employment. If the plan member retired before June 17, 1999, the average salary is calculated over a six-year period.
- Canada Pension Plan / Quebec Pension Plan
- Introduced January 1, 1966, to provide pensions for all Canadian workers and their dependants, including federal public servants who were employed after that date and contributed to either Plan.
- A natural child, a stepchild, or an adopted child who at the time of death was dependent on the plan member for support.
- Date of retirement
- The date on which the employee has most recently ceased to be employed, which is normally the day after the last day for which the plan member received salary. If on leave without pay, the retirement date is the date specified by the plan member or the date notification of the retirement from the employing department is received by the Pension Centre, whichever is later. If the plan member died while still employed, the date of retirement for purposes of calculating indexation is considered to be the day after the date of death.
- Pension Benefits Division Act
- An act to provide for division of the pension benefits of employees in the federal public sector following breakdown of a marriage or common-law relationship, where there is an agreement or court order that provides for the benefit to be divided between the member and the spouse, former spouse or former partner.
- Pensionable service credit
- The total elapsed time from the date the plan member started contributing under the Public Service Superannuation Act until the date of retirement, including any prior service which the plan member purchased and service credited by a transfer from another plan. The pensionable service credit can include periods of free war service but does not include periods of strike, suspension or unauthorized leave. Pensionable service cannot exceed 35 years in combination with other federal public sector service, such as service with the Canadian Forces or the Royal Canadian Mounted Police.
- Public Service Superannuation Act
- An act to provide pension benefits to eligible federal public servants and their dependants.
- Retirement Compensation Arrangement
- A plan which provides benefits that exceed the allowable limits for a registered pension plan under the Income Tax Act.
- Return of contributions
- Return of the total monies paid under the Public Service Superannuation Act by the plan member together with interest compounded quarterly.
Section 1: Government of Canada Pension Centre—Contact information
The Pension Centre can be reached by telephone, facsimile or mail. When contacting the Pension Centre, always include your pension number (which is found on your payment statement or correspondence), your full name, address and telephone number, including area code. We can often answer letters or facsimiles via a telephone call.
The Pension Centre will also handle your change of address requests. To ensure that you get your monthly pension benefit, payment statement, information packages and tax information slips without delay, we must receive your change of address or bank account details prior to the first of the month for which you wish the change to be made. When changing banking arrangements, the old account should not be closed until a payment is deposited in the new one. Change of address or bank account details may be done in writing, by facsimile or by telephone.
If you move to another province or another country, please consult with the Pension Centre as this change may affect your medical insurance coverage.
Section 2: Your pension
Calculating your pension
The survivor's pension which you are receiving is approximately one-half of the pension the plan member was entitled to receive, without any adjustment for early retirement or for the integration with the Canada or the Quebec Pension Plan. The formula for calculating your monthly pension is one percent for each year of pensionable service credit, to a maximum of 35 years, multiplied by the plan member's average annual salary during the best five consecutive years, divided by 12. The average salary is calculated over a six-year period if the plan member retired before June 17, 1999.
For example, if the plan member had 25 years of pensionable service credit and an average annual salary of $36,000 the monthly pension would be:
(1% × 25 years × $36,000) ÷ 12 months = $750 per month
If any of the service was part-time, the benefit for that period will be reduced to reflect the difference between the assigned hours versus the full-time hours for that position. Also, if you qualify for a survivor's allowance but had received a payment under the Pension Benefits Division Act, the service on which the division payment was based will be excluded from this calculation.
If you were married after the plan member retired or you are the widower of an employee who retired before December 20, 1975, your spouse had to elect to receive a reduced pension to provide survivor benefits. Your pension was calculated at that time using actuarial assumptions.
Your pension is payable in monthly installments, during your lifetime, and will be deposited directly into your bank account by the third last banking day of the month.
Contact the Pension Centre if the payment amount has not been credited to your account by the third last banking day of the month.
Your pension cannot be garnished or assigned, except to satisfy a debt due to the Crown, such as income tax arrears. Survivor benefits cannot be diverted to pay maintenance or support.
Deductions from your pension payment
You can ensure that the proper deductions are being made by reviewing your Annual pensioners’ statement and your Direct deposit statement. Both statements show your pension number, your gross monthly pension and the amounts being deducted. You will receive an Annual pensioners’ statement each January and a Direct deposit statement in any month in which your net pension changes by more than two dollars.
Questions regarding the amount of income tax you should pay, quarterly tax payments, non-resident taxes and special exemptions must be addressed to the Canada Revenue Agency (CRA) or to Revenu Quebec (whichever is appropriate). Their telephone numbers are listed in the blue pages of your telephone book.
Questions regarding Canada Pension Plan, Quebec Pension Plan or Old Age Security should be directed to Service Canada. The telephone number is in the blue pages of your telephone book.
Retain your pension payment statements that you receive so that you can verify the information on your income tax statement (T4A, Relevé 1, Relevé 2 or NR4) which is forwarded to you annually, usually in February. If you are receiving benefits from the Retirement Compensation Arrangement you will also receive a T4A-RCA statement.
If you wish to increase the amount of income tax deducted from your pension, contact the Pension Centre specifying the exact monthly amount.
If you intend to reside outside of Canada, you may obtain information about your tax situation from the booklet "Non-Residents and Income Tax", available from the CRA.
Section 3: Other benefits
Your entitlement to a survivor's pension under the Public Service Superannuation Act is not affected by other employment or pension income. If you are employed in the federal public service or elsewhere and/or are receiving a pension under the Canada Pension Plan or Quebec Pension Plan, it does not affect your survivor benefit.
Waiver of entitlement
You are permitted to waive your entitlement to a survivor's allowance if doing so will result in the payment of a minimum benefit or increase a child or student allowance. A waiver must be submitted to the Pension Centre no later than three months after receiving notice of entitlement to the allowance. The minimum benefit is explained in Section 7.
Children who are less than 18 years old are usually eligible for a monthly allowance. This allowance is payable on the child's behalf, most often to you. Where the child is not living with you, or should you die while the child is still eligible for an allowance, payment is made on the child's behalf to the person having custody and control of the child. This person does not have to be the legal guardian.
Each eligible child is entitled to an allowance amounting to one-fifth of your pension. You will, of course, still receive your full pension. The maximum allowance payable on behalf of all children cannot exceed four-fifths of your pension. If there are more than four children, the maximum allowance will be apportioned among all the eligible children.
If you were to die while your children are still eligible, their allowances would be paid at twice the rate described above for each child, up to a maximum of eight-fifths of your pension for four or more eligible children. If both parents were plan members and both have died, the children may be entitled to an allowance in respect of each parent's participation in the plan.
A student's allowance may be paid to a plan member's child who is between the ages of 18 and 25, and enrolled in an accredited full-time educational program since attaining age 18 or since the date of the plan member's death, whichever is later. A student's allowance is paid directly to the student and is subject to the same conditions as a child's allowance.
The student must apply for the allowance. Application forms are available from the Pension Centre. Once the student's initial entitlement is established, application forms to reconfirm entitlement for subsequent years will be forwarded annually. Students should complete the form only after they have enrolled for the academic year for which the form is being completed.
Regular scholastic vacations or short periods of illness will not adversely affect payment of student allowances. If there is an absence for any other reason, or if the student withdraws from school, the student should contact the Pension Centre to determine whether he will still be eligible for an allowance. In certain circumstances, a student absent for periods of less than two academic years may qualify for an allowance if he resumes full time study.
Under no circumstances will entitlement to an allowance be established or reinstated:
- where a break in attendance commences during an academic year and extends beyond the end of the following academic year; or
- where a break in attendance commences after the completion of an academic year and extends beyond the end of the two following academic years
Section 4: Indexation
Under Part III of the Public Service Superannuation Act, your pension is indexed every January 1st, to help offset increases in the cost of living.
Your cost of living increases are calculated from the plan member's date of retirement. If the plan member had not yet retired at the time of his death, the day after the date of death is considered the retirement date.
If the plan member had not retired or retired in the same year in which he died, the first cost-of-living adjustment the following January 1st is prorated to take into account only the number of full calendar months for the balance of the previous year, as illustrated in the following example:
Date of retirement: November 16
Number of full months after retirement date and before January 1st of the year following the year of retirement: one month
Indexing payable: 1/12 of the full increase authorized for January 1st
Subsequent increases will become payable each January thereafter and will be equal to the full increase authorized for that year.
If the plan member had retired prior to the year in which he died, indexing will be included as soon as your pension becomes payable. The amount will be based on the increase in the cost of living from the date of retirement to January 1st of the year in which your pension commences. Subsequent increases each January will be equal to the full increase authorized for that year.
You will be officially notified each time an adjustment is made to your indexing.
Section 5: Public Service Health Care Plan
An application to retain medical insurance coverage must be made by the pensioner's survivors, if they wish to remain insured.
If the pensioner was a member of the Public Service Health Care Plan (PSHCP) and had family coverage, membership will be continued provided an application to join the plan is made within 60 days of the member's date of death.
If the pensioner was not a member or did not have family coverage, a three-month waiting period will apply from the date an application to join the PSHCP is made.
The PSHCP booklet provides general information concerning eligibility, application procedures, the coverage which is available, and claims procedures.
If you wish to obtain a copy of the booklet or if you have any general questions about the Plan, contact the Pension Centre. Specific coverage questions should be addressed to the underwriter, whose address and telephone number are found in the PSHCP booklet.
When contacting the Pension Centre, please provide your pension number and PSHCP identification number to assist us in handling your inquiry. For information about provincial health insurance plans, please contact the province's local representatives.
Section 6: Pensioners' Dental Services Plan
The Pensioners' Dental Services Plan (PDSP) offers dental services coverage to survivors of former public service pensioners who are eligible for this coverage. If you are entitled to a public service survivor's pension and are eligible for the PDSP, the Pension Centre will provide you with an information booklet and enrollment form. To have immediate coverage, you must enroll within 60 days from the date you are notified of your pension entitlement. Otherwise, coverage will be effective on the first day of the second month following the date the application is received at the Pension Centre. For more information, contact the Pension Centre.
Section 7: Minimum benefit
Under the Public Service Superannuation Act, the total of all benefits is guaranteed to be normally not less than five times the plan member's annual unreduced annuity entitlement.
After the plan member has died, and where there is no longer any survivor or child eligible for an allowance, the total of all pensions and allowances paid, excluding indexation, is compared to the minimum guaranteed amount. If there is a balance owing, it is paid in a lump sum to the beneficiary designated for the Supplementary Death Benefit or, if no beneficiary was designated or the beneficiary died before the plan member, to the plan member's estate.
If the plan member retired before December 20, 1975, the minimum benefit is equal to the return of contributions plus interest, minus the total of all benefits, excluding indexation, paid to the plan member, survivor and children.
In the case of a minimum benefit payment, it may be advisable to seek income tax and related advice before the payment is made.
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