Pension transfer out—Estimates

Why is an estimate important?

The estimate stage is critical because it provides you with information to assist in making the decision whether to proceed with a pension transfer. The existence of an agreement between employers does not necessarily mean that a transfer of your pension credits will be advantageous to you. You should contact your current employer for information regarding your pension benefits under their plan and compare these with the pension estimate provided by the Pension Centre when you terminated your employment with the public service.

How do I request an estimate?

Contact the human resources office of your current employer to obtain a pension transfer estimate. They will provide you with the Appendix A/A2—Request for transfer estimate form - depending on the terms of the Pension Transfer Agreement (PTA).

When you receive the appropriate appendix, complete and sign the applicable part of the form. If your current plan administrator is the "Commission administrative des régimes de retraite et d'assurances (CARRA)" or "l'Université du Québec", complete and sign the personal information data in the middle section of the appendix and send the original copy to the Pension Centre and a copy to your current plan administrator. This Employee's Authorization will give the Pension Centre permission to provide your current employer with the information required to calculate your pension transfer estimate. Once your portion of the appendix is completed and signed, you must send the form to the Pension Centre. The Pension Centre will complete Part III and return the form to your current employer where the pension transfer estimate will be prepared. It is recommended that you keep a photocopy of this appendix for your records. Normally, this form must be received by the Pension Centre within the time limits prescribed in the agreement or one year from the date the PTA is signed, whichever is later.

It should be noted that only service already paid for will be included in the amount available for transfer. If you have outstanding elective service payments or deficient Public Service Superannuation Act (PSSA) contributions, you will be given an opportunity to remit these amounts so that all of your service is included.

The estimate

Your current employer will send you the Appendix B/B2—Request for transfer of service credits. This form represents your pension transfer estimate and is to be considered an estimate only. This appendix will indicate the estimated amount available for transfer from the PSSA and how much service may be purchased under your current employer's pension plan.

The purpose of a pension transfer estimate is to provide individuals with a sense of what monies are required and are available as of a certain point in time; however, they are still only estimates. Should you choose to continue with the transfer, you must complete the relevant portions of the Appendix B/B2 and return it to the Pension Centre prior to the deadline indicated at the bottom of the form. Doing so constitutes your formal request for transfer. Once a formal request for transfer is made, the provisions of the PTA stipulate that the pension value must be recalculated as of the date of receipt of the formal request for transfer, that is, the Appendix B/B2. In most cases, if not all, it is expected that the final amounts will change as time passes because the calculation of the pension valuation takes into account, among other factors, the actual age of the employee and interest.

Pension transfer amounts will be determined on an actuarial basis. The amount to be transferred will be the lesser of:

  1. the amount available for transfer as calculated by the former employer (federal transfer amount—defined benefit or defined contribution).


  2. the amount required under the outside employer's plan to fund the period of service being transferred (employer transfer amount).

Your new employer will credit you with service purchased by the federal transfer amount and will calculate this credit according to their plan rules. For more detailed information on the contents of the estimate, refer to How the transfer amounts are determined.

What happens to my retirement compensation arrangement benefits if I transfer my service to my new employer?

The Income Tax Act (ITA) sets specific limits on the average salary that may be used to calculate pension benefits under a registered pension plan. The Canada Revenue Agency (CRA) establishes these limits yearly, e.g. 2005 limit is $114,400. An retirement compensation arrangement (RCA) was created as a vehicle for providing those pension benefits that could not be provided under a registered pension plan due to ITA limits. For additional information regarding the limits imposed you may contact your local Canada Revenue Agency office. You may also consult their Tax information phone service (T.I.P.S.) at 1-800-267-6999.

If you choose to transfer out of the PSSA then those benefits payable under the RCA must also be transferred. If your current employer has a similar funded arrangement under the ITA and is prepared to provide benefits in excess of the ITA limits from this supplementary plan, then the RCA amounts available will be transferred to them. Otherwise, a lump sum amount taxed at source will become payable to you directly. You may want to inquire on this issue with your current employer prior to making your final decision.

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