Less than two years of pensionable service
Explore these links to see what pension benefits may be available to you upon release or when you stop participating in either of the Canadian Armed Forces (CAF) Pension Plans:
- Transfer to the Federal Public Service or the Royal Canadian Mounted Police
- Supplementary Death Benefit
- General information
- Client concern escalation process
The administrative process
This document outlines information for members who release from the CAF or stop participating in either of the CAF Pension Plans with less than two years of pensionable service.
Regular Force members must release from the Regular Force in order to become entitled to benefits under Regular Force Pension Plan. Reservists in the Regular Force Pension Plan or the Reserve Force Pension Plan must not have had any paid service in a 12 month period or release from the CAF to become entitled to pension benefits in either plan.
Return of contributions
The Canadian Armed Forces Pension Plans offer different pension benefit options for those entitled to a return of contributions. You can have your return of contributions:
- paid to you in cash with interest, less income tax
- transferred to your Registered Retirement Savings Plan (RRSP); or
- transferred to another Registered Pension Plan (RPP)
Should you release with less than two years of pensionable service, a return of contributions is your only benefit entitlement under the provisions of the Canadian Forces Superannuation Act (CFSA). A return of contributions is a lump sum equal to the pension contributions you paid into the plan, plus accrued interest. The rate of interest payable on your return of contributions is calculated at the annual rate of return of the Canadian Forces Pension Fund, compounded quarterly to the end of the quarter preceding the date of payment.
You have the option of having your return of contributions paid directly to you or transferring it to a Registered Retirement Savings Plan (RRSP) or a Registered Pension Plan (RPP). Please indicate your preferred method of payment by completing Part 1, Section C, of the Pension Benefit Options Statement CF-FC 2011E-PF). Should you choose to have your return of contributions paid directly to you, federal and provincial income tax will be deducted at source. A pension adjustment reversal will be reported to the Canada Revenue Agency to restore your RRSP room.
Note 1: The Income Tax Act (ITA) places restrictions on the amount of pension benefit that may be accrued in any given year of service. Pension benefits that are within the limits allowed under the ITA will be paid in accordance with the provisions set out under the Canadian Forces Superannuation Act(CFSA), with the remainder being paid in accordance with the provisions set out under the Special Retirement Arrangements Act. A Retirement Compensation Arrangement (RCA) is a plan which provides benefits that exceed the allowable limits for an RPP. Any RCA contributions that form part of the return of contributions entitlement cannot be transferred to a RRSP or an RPP. This portion is payable in cash and tax is deducted at source. If this applies to you, an RCA amount will be indicated on your Pension Benefit Estimates Statement.
Note 2: If you are entitled to a pension benefit based on 33 or more years of pensionable service under the Public Service Superannuation Act (PSSA) or Royal Canadian Mounted Police Superannuation Act (RCMPSA), please contact the Government of Canada Pension Centre as this may change your pension benefit option.
Additional pension information
Transfer to the Federal Public Service or the Royal Canadian Mounted Police
If you have accepted or plan to accept a position with the Federal Public Service or Royal Canadian Mounted Police (RCMP), you may wish to contact your new employer about electing your pensionable CAF service under their pension plan. If eligible, you may be able to have your return of contributions transferred directly to your new employer's pension plan. For more information, consult the Increasing your Pension web page.
Note: If you release or stop participating in either of the CAF Pension Plans with more than two years of pensionable service, you may have more pension benefit options available. For more information, consult the Retired member with two or more years of pensionable service.
Supplementary Death Benefit plan
The Supplementary Death Benefit (SDB) plan is a form of term reducing life insurance. The plan provides a benefit equal to twice your annual salary and if that amount is not a multiple of $250, the benefit is rounded to the next multiple of $250 above that amount. For those with less than two years of pensionable service, SDB coverage normally ends on release. However, you can elect to continue as a participant if you have participated in the SDB plan for five or more years without interruption as a result of your service in the Regular Force and prior employment in the Public Service. To apply for coverage under the SDB plan under the commercial rate, you must complete the form “Election to continue as participant under the Supplementary Death Benefit Plan” CF-FC 2017) and return it with your annual contributions to the Government of Canada Pension Centre within one year before or within 30 days after your release.
If you make a valid election to continue as a participant in the SDB plan, your coverage and contributions will be reduced by 10% per year effective April 1st or October 1st, whichever comes first, following your 61st birthday. Your coverage will cease at age 70.
For additional information pertaining to the SDB plan, please consult the Supplementary Death Benefit web page or contact the Government of Canada Pension Centre.
Debts due to the Crown
Should the Canadian Armed Forces (CAF) inform the Government of Canada Pension Centre that you owe a debt to the Crown, such as overpaid salaries and allowances, these amounts will be recovered from your return of contributions. You will be advised in writing of any such recovery action.
Supplementary Death Benefit contributions owing on release
If you have any SDB contributions owing due to a period of service without pay or for any other reason, they will be recovered from your return of contributions. You will be advised in writing of any such recovery action.
Re-joining either of the Canadian Armed Forces Pension Plans
Should you re-join either of the Canadian Armed Forces Pension Plans within 60 days, you may no longer be entitled to your return of contributions. Please contact the Government of Canada Pension Centre for more information
Potential service buy-back
If you have any prior service that you have not yet counted as pensionable under the CFSA, you may wish to consider doing so prior to release or ceasing to participate in either of the CAF Pension Plans as it may result in an increase in the value of your pension benefit. If, as a result of your decision to buy back prior service, your total pensionable service amounts increases to more than two years, your pension entitlement and benefit options will also change.
For additional information, refer to the Service Buy-back Package.
The Pension Benefit Options Statement (CF-FC 2011E-PF) should be completed and returned to the Government of Canada Pension Centre.
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