Transforming pension administration

Learn about Public Services and Procurement Canada (PSPC)’s modernized public service pension administration system and its benefits for the Government of Canada and public sector employees.

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Making better possible: Pension modernization video series

Two pension plan members tell their personal stories about transitioning to retirement under the new pension administration.

Transforming the public sector pension system

PSPC administers the pensions of about 850,000 public sector employees and retirees. 

Modernization objectives

In 2007, PSPC undertook the Transformation of Pension Administration Initiative to replace its outdated administration system. In launching this initiative, PSPC’s main objectives were to:

The Government of Canada solution

To accomplish its objectives, PSPC:

Before and after pension modernization

Infographic: Pension modernization (PDF, 961KB)

Infographic description

Pension modernization initiative

Public Services and Procurement Canada successfully completed the Government of Canada’s Transformation of Pension Administration initiative in 2017 to replace its 40-year old public service pension system with a new solution that is improving the delivery of services for public sector employees, retirees and their families.

All pension plan members can now benefit from a new cost effective and efficient centralized system, with a single point of contact, powerful new features and more efficient processes.


For more information on the Government of Canada’s Transformation of Pension Administration Initiative, visit Transforming the pension administration.

The public sector pension system today

PSPC completed its modernization initiative in 2013. Today, with support from the Document Imaging Centre in Matane, Quebec, and in partnership with the compensation sector in the National Capital Area, the Government of Canada Pension Centre in Shediac, New Brunswick, offers its expertise in service delivery to Public Service Pension Plan members and their families across the country.

Unlike the old system, which was fragmented, labour-intensive and difficult to maintain, today’s system uses a flexible Information Technology (IT) platform that is adaptable and capable of administering multiple pension plans.

Serving more public sector pension plan members

In July 2014, the Transformation of Pension Administration Initiative successfully transferred the administration of Royal Canadian Mounted Police (RCMP) pension plans to the new Government of Canada pension solution. This 4-year project came in on schedule and under budget, adding 40,000 RCMP pension plan members to the Pension Centre’s client base.

In 2017, PSPC established a permanent satellite office of the Government of Canada Pension Centre in the National Capital Area to administer the Canadian Armed Forces Pension Plan. Further leveraging the Government of Canada pension solution, PSPC now administers the pensions of over 205,000 active regular and reserve force members, retirees and their families.  

Benefits for the Government of Canada and its employees

The Transformation of Pension Administration Initiative is a leading example of how technology can simplify, standardize and consolidate administrative functions across government.

The government's pension system has evolved into one of the most modern and innovative in the world. With a system that is recognized at home and abroad for its innovation and successes, PSPC is now assisting other organizations and projects adopt similar methodologies.

Some of the benefits realized from this integrated industry-standard system include:

Safeguarding the integrity of your public service pension plan

Public Services and Procurement Canada (PSPC) is the federal department responsible for issuing federal employees’ pay cheques under the Phoenix pay system and pension cheques for retirees through Penfax.

Since the start of Phoenix, many employees have experienced pay issues. These problems are unacceptable, and efforts are underway to address them. This situation has raised concerns about impacts on public service pensions. Public servants and pensioners should know that the Government of Canada Pension Centre does not solely rely on information from the Pay Centre to calculate a former employee's pension. There are important measures and checks and balances in place to protect the integrity of pension payments and services.

Mitigation measures

Well before Phoenix was introduced, Pension Centre employees occasionally identified data errors, as is common with other pension administrations of this size. That’s why a robust quality assurance program was developed to ensure the accuracy of pension payment calculations. Effective controls exist to ensure that data errors are caught and corrected on pension accounts as much as possible before payments are issued.

Quality review

Before a pension payment is issued, 100% of accounts undergo a quality review that includes the verification of salary and service records. The Pension Centre also conducts an additional audit of its ongoing benefit payments to clients. This audit assesses the overall quality of payments; the last such exercise indicated a 98% quality rate.

Working together

The Pension Centre doesn’t work in isolation. The Pension Centre works with the Pay Centre in Miramichi and federal departments to validate and adjust incorrect data. When the new or additional information is received after a pension payment is issued, which, for instance, happens after the settlement of collective agreements, benefits are recalculated and adjustments are made to the account going forward. In these cases, the client is not negatively affected as the pension is adjusted retroactively.

New staff

With the emergence of Phoenix-related pay issues, the Pension Centre has added additional controls by realigning existing staff to provide more oversight of key process areas such as the payment of benefits. The Pension Centre has also increased its staff by hiring additional verification officers and data integrity clerks.

Minimizing the impact of Phoenix on pension plan members

We remain committed to ensuring plan members still receive their pension benefits from the Pension Centre, even when they have outstanding pay issues.

Lump sum payments

In cases where clients are only entitled to a unique lump sum payment, in view of the problems experienced since the implementation of Phoenix, processes have been put in place to grant an interim payment. In order to ensure that payments are issued in a timely manner, employees are given an opportunity to receive an interim amount of 70% of the value of the payment (usually within 45 days from the date of termination of employment). The Pension Centre works closely with the Miramichi Pay Centre, or the pensioner’s department/agency for organizations not serviced by the Pay Centre, to obtain all the documents reviewed and attested, thus allowing the recipients to receive payment of the balance owing.

Monthly pension benefit

With respect to monthly pension benefit payments, the Pension Centre does process benefit entitlements even in cases where documentation is pending. Any resulting adjustments to the benefit entitlements are made once the documentation is received.

This means that if a client's pension account does not yet have all the correct information, the client’s pension is readjusted upon receipt of the required information from the Pay Centre or the department/agency.

The way forward

PSPC will continue to ensure that every possible effort is made to safeguard the integrity of the pension program.

At the same time, PSPC is committed to continual improvement and is actively working with the Treasury Board Secretariat (TBS) to improve the quality of pay data and to prevent data integrity issues.

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