How your pension plan works

Do you know that you contribute to your pension plan at two different rates?

You can find the answer and much more information by viewing the video below. Useful links are provided below, in case you are interested in obtaining additional or detailed information on the topic.

Transcript of the How your pension plan works

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The public service pension plan is a defined benefit pension plan that provides its members a pension based on salary and years of pensionable service. The plan also provides a pension for survivors in the event of the plan member’s death.

Membership is mandatory for all eligible employees and contributions to the plan are made jointly by plan members and the employer, the Government of Canada.

Because the public service pension plan is coordinated with the Canada and Quebec Pension Plans (CPP and QPP), you contribute to the public service pension plan at two different rates. You contribute at a lower rate on your salary up to the Yearly maximum pensionable earnings (YMPE) and at a higher rate on the portion of your salary that exceeds the YMPE. The YMPE is an amount that is predetermined by the CPP.

The number of years and days of service you can count under the pension plan is known as pensionable service. It includes service paid by current deductions from your salary, service buybacks and service transfers from other pension plans. Some types of service are not included in the calculation of your pensionable service, such as periods of strike, suspension, off-season and unauthorized leave without pay. As well, any service after the year in which you turn age 71 does not count.

The maximum number of years of pensionable service you can accumulate under the public service pension plan is 35 years, including service you purchased or transferred from an outside pension plan or pensionable service with certain other federal government pension plans such as the Canadian Forces and the Royal Canadian Mounted Police. If you work beyond that, you are still required to contribute but at 1% of your salary for indexing purposes.

To learn more about what your pension plan has to offer, please view the complete series of pension videos and take time to visit Your public service pension and benefits web portal at Pension and benefits.

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View the How your pension plan works video.

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