Pension transfer out—Issues to consider
You should not assume that the amount of funds available from the Public Service Superannuation Act (PSSA) will be sufficient to credit you with all of the pensionable service credits accumulated under your current employer's pension plan. There may be differences between the pension benefits provided by each plan and also differences in the actuarial assumptions each plan uses in the pension transfer calculation.
You should also consider how long you intend to remain with your current employer and whether you may return to the public service in the future. When transferring back into the public service, the amount available from your current employer may not be sufficient to purchase all the service that was originally to your credit under the PSSA.
As you review your options, it is important to consider both the costs involved, the tax implications, and the eligibility requirements. Consideration must also be given to factors such as inflation protection (pension indexing), age and service thresholds for pension benefit entitlement, survivor benefit provisions, health and dental care plans, and projected career and retirement date expectations.
If you transfer your public service pension credits to a new employer’s pension plan under a Pension transfer agreement, but you are later re-employed in the public service and you become a plan member again on or after January 1, 2013, you will be covered under the current pension plan rules. This means that if you are re-employed, you could be eligible to receive an unreduced pension at age 65 with at least two years of pensionable service, or at age 60 with 30 years of pensionable service.
Given the complexity of pension issues, you may wish to obtain additional counselling from a financial advisor before making a final decision.
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