Bridge Benefit—Canadian Armed Forces pensions
This page provides information about the bridge benefit in the form of questions and answers, specific to the following audiences:
- Regular force members who enrolled before March 1, 2007
- Regular force members who enrolled on or after March 1, 2007
- Reserve force members in the Reserve force (part-time) pension plan (Part I.1)
- Reserve force members who have qualified for the Regular force (full-time) pension plan (Part I)
Please note that questions 1 to 12 deal with the bridge benefit payable under Part I of the Canadian Forces Superannuation Act (CFSA), i.e., the pension arrangements that apply to members of the regular force and reserve force members in the regular force pension plan. Questions 13 to 15 deal with the bridge benefit payable under the Reserve Force Pension Plan Regulations (RFPPR).
You may want to know
What is the bridge benefit?
It is a monthly amount payable to Canadian Armed Forces (CAF) annuitants in addition to the normal monthly benefit payable under the Canadian Forces Superannuation Act (CFSA). This additional component exists to ensure a stable retirement income is paid from the time the annuity or annual allowance commences and continues until the annuitant reaches age 65, dies or becomes entitled to a disability pension under the Canada Pension Plan (CPP)/Quebec Pension Plan (QPP).
How did the bridge benefit come about?
When the Canada Pension Plan (CPP) was introduced in 1966, the decision was made to co-ordinate the new universal plan with the plans offered to the federal public sector work force. The integrated arrangements took the form of a "two-step" contribution rate and consequently a "two-step" benefit, plus a time limited bridge benefit. By integrating the Canadian Forces Superannuation Act (CFSA) and the CPP, pension plan members did not have to make additional contributions toward their retirement income. Virtually all other employer-sponsored pension plans in Canada, including the provincial public sector pension plans, made the same decision. If a stacked approach had been adopted, pension benefits would have been greater, but the cost of the plan would be higher which would have increased either or both contributions payable by the members and the government (i.e. taxpayer).
What happens to the Canadian Forces Superannuation Act pension when the annuitant turns 65?
The bridge benefit ceases being paid at the end of the month following the month of the annuitant's 65th birthday.
How is the bridge benefit calculated?
The bridge benefit amount is determined at retirement by first calculating 2% of the member's average annual Canada Pension Plan (CPP) earnings (to a yearly maximum - see note below), multiplied by the member's years of pensionable service from January 1, 1966 to retirement (not exceeding 35 years). This amount is then multiplied by a percentage that depends on the year of the member's birth. For members born before 1943 the percentage is 35, while for those born after 1946 the percentage is 31.25. For those born between these years the percentage varies on a sliding scale.
Note: The maximum average annual CPP earnings are calculated each year on the basis of average wages in Canada.
For example, if a member born before 1943 retired from the Canadian Armed Forces (CAF) in 2002 with 25 years 11 days pensionable service (25.03014 years) and earnings exceed the CPP ceiling ($37,860 in 2002), the bridge benefit would be calculated as follows:
0.02 x 25.03014 x $37,860.00 x 35% = $6,633.49 per year or $552.79 per month
Thus, the bridge benefit portion of this former member's pension, payable to age 65 or the commencement of a CPP disability benefit would be $552.79 per month.
What does the integration of contributions under the Canadian Forces Superannuation Act and Canada Pension Plan mean as far as contributions to be paid by the member?
It means the contribution rate under the pension plan set out in the Canadian Forces Superannuation Act (CFSA) Part I is two-tiered. Members pay contributions at a lower rate on their salary amount that is covered by the Canada Pension Plan (CPP) than the contributions payable on salary above that amount.
Can I choose not to pay for the bridge benefit?
No. The bridge benefit and the portion of your pension contributions that relates to it are an integral part of your Canadian Armed Forces (CAF) pension arrangements.
Will I be reminded about the bridge benefit once I become an annuitant?
Definitely, you will receive regular reminders. Canadian Armed Forces (CAF) members about to retire receive a briefing during which the details of the bridge are explained to them. Furthermore, the annual information letter sent to annuitants contains information about the terms of payment of the bridge benefit.
Once I reach age 65, do I need to inform someone at the Government of Canada Pension Centre to stop my bridge benefit payments?
No. The system will automatically know when an annuitant reaches age 65. However, in the unlikely event that the bridge benefit does not cease, annuitants are encouraged to contact the Government of Canada Pension Centre as soon as possible to avoid having to pay back pension benefits.
What happens if I start receiving Canada Pension Plan disability benefits? Do I need to let someone know?
If you start receiving a Canada Pension Plan or Quebec Pension Plan (CPP or QPP) disability benefit, your bridge benefit entitlement ceases. You should advise the Government of Canada Pension Centre as soon as possible and provide them with a copy of the CPP form "1808 Notice of Entitlement" or QPP "Notice of Acceptance". These documents are included with your first CPP/QPP disability pension cheque. This minimizes the risk that your bridge benefit will not stop as quickly as the law requires, creating an overpayment of pension, which must be recovered.
I am the survivor of a Canadian Armed Forces annuitant whose bridge benefit has stopped being paid. Will my survivor's allowance be based on the pension before or after the bridge benefit stopped?
The survivor's allowance is based on the member's basic annuity plus the bridge benefit. The survivor's allowance is not affected by any entitlement that person has under the CPP or QPP.
Will cessation of the bridge benefit affect the indexing of the pension payable under the Canadian Forces Superannuation Act to a retired Canadian Armed Forces member?
The bridge benefit portion of a retired member's benefits is indexed in the same way and at the same time as the rest of the member's pension. Once the bridge benefit stops, so does the portion of the monthly payment that reflected the indexation of the original bridge benefit amount. The indexation of the remaining portion of the benefit is not affected in any way.
Do Canadian Armed Forces members contribute to the Quebec Pension Plan or Canada Pension Plan?
Canadian Armed Forces (CAF) members contribute to the Canada Pension Plan (CPP). Earnings in the CAF are subject to the CPP regardless of the member's location. Although a member served in Quebec, the member was contributing to the CPP rather than the Quebec Pension Plan (QPP).
I contributed to the Quebec Pension Plan with an employer before I joined the Canadian Armed Forces. Am I entitled to Quebec Pension Plan?
If you contributed to the Quebec Pension Plan (QPP) at any time during your working years and reside in Quebec at the time your pension is to start, you should apply to the QPP. In any case, the retirement pension will be calculated on your full CPP and QPP contributory earnings. For further information on the CPP, you should contact Service Canada. For further information on the QPP, you should contact the Régime des Rentes du Québec.
Is there a bridge benefit under the Reserve Force Pension Plan?
Yes. The monthly amount payable to a retired member under the Reserve Force Pension Plan (RFPP) includes both a basic lifetime pension and a temporary additional component (the "bridge benefit"). The objective of this bridge benefit is the same as under the Regular force plan, namely to stabilize retirement income from the time the member retires until they become entitled to a normal retirement or a disability pension under the Canada Pension Plan (CPP)/Quebec Pension Plan (QPP). At that point in time, retirement income will come from both the RFPP and the CPP/QPP.
Is the Reserve Force Pension Plan bridge benefit paid on the same basis?
Yes. It is a monthly payment that is added to the basic lifetime pension paid to an annuitant, it is indexed at the same time and at the same rate as the basic pension and it stops being paid at the time a normal retirement pension or a disability pension becomes payable under the Canada Pension Plan (CPP)/Quebec Pension Plan (QPP).
How is the bridge benefit calculated under the Reserve Force Pension Plan?
The annual amount of the bridge benefit is determined, at the time of ceasing to participate in the Reserve Force Pension Plan (RFPP), by calculating one half of one percent (0.005) of the member's "updated bridge benefit earnings" – their annual earnings adjusted for wage growth, up to a maximum based on the average of the Canada Pension Plan (CPP) maximum earnings ($43,700 in 2007).
For example, if a member became eligible for an immediate annuity in 2007 with "updated bridge benefit" earnings totalling $167,000, the bridge benefit would be calculated as follows:
0.005 x $167,000 = $835 per year, or $69.58 per month
Thus, the bridge benefit portion of this member's pension, payable to age 65 or the commencement of a CPP disability benefit would be $69.58 per month.
Note: If a member who is entitled to a deferred annuity opts instead to receive a (reduced) annual allowance, the bridge benefit will be subject to the same reduction. In the example above, if the member were receiving an annual allowance equal to 80% of the full annuity amount, the bridge benefit would be $69.58 x 0.8 = $55.66 per month.
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