Exploring Pension Benefit Options: Deferred Annuity

A Deferred Annuity is a pension option that allows you to defer your pension payments until a later date if you leave the public service before the normal retirement age. This video will explain when you can choose this option and other important details to keep in mind.

Topics covered: Explanation on payment calculation; how to qualify for a Deferred Annuity; pension estimates; insurance coverages; using the Compensation Web Application (CWA)

Transcript for Exploring Pension Benefit Options: Deferred Annuity

(Background music: Welcome page with a logo of the Government of Canada Pension Centre.)

At the Government of Canada Pension Centre, we're here to help.

Hi there. I'm Louise.

In this video, we are going to talk about the deferred annuity.

This is one of the pension options that may be available to you when you cease employment or retire from the Federal Public Service.

(The narrator leaves the scene by the right side of the screen. She sits on a lawn chair. Next to her: a small table with a pitcher and a glass of lemonade. She is in front a wooded area.)

So what is a deferred annuity? A deferred annuity means that you only start receiving your monthly pension when you reach the normal retirement age.

The Public Service Pension Plan sets the normal retirement age as age 60 if you became a plan member on or before December 31, 2012, or age 65 if you became a plan member on or after January 1, 2013.

(When narrator says “The public service pension plan sets the normal retirement age as,” a grey text box with white letters appears on the top-left corner of the screen, with the words AGE 60 IF YOU BECAME A PLAN MEMBER ON OR BEFORE DECEMBER 31, 2012. When narrator says “… or age 65…,” the words AGE 65 IF YOU BECAME A PLAN MEMBER ON OR AFTER JANUARY 1, 2013 appear in the same text box.)

So you can receive a deferred annuity if you have at least two years of pensionable service when you retire.

This annuity is based on your total years of pensionable service and your average salary for your five consecutive best paid years of service. They are often the last five years of your career.

(When narrator says “So, you can receive a deferred annuity…,” the words DEFERRED ANNUITY appear in the top-left corner. When she says “This annuity is based on,” the words YOUR TOTAL YEARS OF PENSIONABLE SERVICE/YOUR AVERAGE SALARY FOR YOUR FIVE CONSECUTIVE BEST PAID YEARS OF SERVICE appear in the same text box. The text box disappears by the left side of the screen.)

Like all our pension benefits, the deferred annuity is fully indexed to the cost of living.

This means that upon receiving your pension, we will adjust it to reflect the cost of living from the date you cease employment.

After that, we adjust your pension every January.

Going back to work could affect your pension and indexing.

So please contact us at the Pension Centre if you are thinking of returning to work in the Federal Public Service.

You have one year from the time you cease employment to choose the type of pension benefit you want to receive.

If you don't make your choice within this time, we will assume that you chose to receive a deferred annuity.

Can you change your mind once you have chosen to receive a deferred annuity? Yes, you can.

You can ask to receive your pension earlier at a reduced rate.

We call this an annual allowance.

For more details, please view our annual allowance video. If before you reach the normal retirement age, you become disabled, you can apply for a medical retirement.

Health Canada would have to confirm that you are permanently disabled.

You may also want to view the retirement due to disability video.

Your coverage under the Supplementary Death Benefit Plan, or SDB, is not automatic.

The SDB is a form of term life insurance.

You may still get coverage, but at a higher cost than when you were an employee. There is a time limit to apply to continue your coverage.

The Supplementary Death Benefit video can help you with this process.

Once you start receiving your pension, you may also qualify for the following insurance plans: The Public Service Health Care Plan provides coverage for drugs and medical expenses, and the Pensioners Dental Services Plan provides coverage for dental services and supplies.

Please call us for more details about these benefits.

Now, do you owe pension contributions for a service buyback or for a period of leave without pay? If so, you have to send us your payments directly.

We can provide you with the amounts owing for these contributions.

You can get an estimate of how much your deferred annuity will be.

To do so. Go to the Compensation Web Applications or CWA website.

Access the Pension Portal for Active members to the Public Service.

Once you sign in, click on Pension Tools and then Pension Benefits Calculator to calculate your pension.

(When the narrator says, “Please visit the Compensation Web Applications…” a screen shot of the Web page that leads to the Compensation Web Application appears in the left-right corner of the screen. When the narrator says “Access the Active Member Pension Application” a screen shot of the Web page that leads to the Active Member Pension Application appears in the left-right corner of the screen. When the narrator says, “… click on the Personalized Pension Tools…” a screen shot of the Web page that leads to the Personalized Pension Tools appears in the left-right corner of the screen. The screen shot disappears.)

You can also call us for pension estimates. We will send you a retirement package.

This package includes information and estimates for the various pension options available to you.

Before leaving you today, here are a few important suggestions.

Always inform us of any changes to your mailing or contact information, and please contact us three months prior to reaching your normal retirement age.

We want to ensure you have all the information you need to start receiving your pension.

I hope this was helpful to you.

For more information about the deferred annuity, please visit our website at canada.ca/pension-benefits.

(The narrator stands up and walks back to the wooden fence. When she says “Please visit our website…,” the address CANADA.CA/PENSION-BENEFITS appears at the bottom of the screen. The text disappears. The narrator leaves by the left side of the screen.)

Thanks for watching.

(Text on screen: Contact information: Government of Canada Pension Centre – Mail Facility, PO BOX 8000, Matane QC G4W 4T6. Telephone: 1-800‑561‑7930. Email: pwgsc.pensioncentre-centredespensionstpsgc@pwgsc-tpsgc.gc.ca)

(Text on screen: Check us out: facebook.com/PSPC.SPAC, instagram.com/pspc_spac, twitter.com/pspc_spac, youtube.com/PWGSCanada)

[Music stops]

(Public Services and Procurement Canada signature)

(Canada Wordmark)

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