Retiring from the public service of Canada

Basic superannuation benefit entitlements are increased each January to compensate for increases in the Consumer Price Index (CPI).

As illustrated in Table 2, the indexation adjustments since 1970, when the SRBA first came into force, have served to protect the value of superannuation benefit payments against inflation.

Indexation starts on the first of January of the year after someone retires.The first indexation adjustment is prorated to the number of full months of the previous year after the person retired.

If an employee's last day of remuneration is September 29th, he or she will be deemed to have ceased to be employed on September 30th and will therefore be entitled to indexation for the three remaining months of that year (i.e. October, November and December). If he or she worked an extra day, the retiree would only be entitled to November and December's indexation payments because he or she would be deemed to cease employment on October 1 and her first retirement benefit day would be October 2nd, because retirees only get indexation payments for complete months.

If that employee's immediate annuity was worth $31,500, with a scheduled 2% annual indexation adjustment, an additional day of employment could cost them $52.50  per year (indexed).

In every other year the indexation adjustment applies to the entire year's benefits. Table 3 below provides the schedule of the pro-rated portion of the indexation adjustment by month of termination.

Table 3

Month of Termination Pro-Rated Increase For the following year
January 11/12
February 10/12
March 9/12
April 8/12
May 7/12
June 6/12
July 5/12
August 4/12
September 3/12
October 2/12
November 1/12
December 0/12

Table 2: Indexation increases

Year of Payment Percentage Increase
1970 2.0
1971 2.0
1972 2.0
1973 2.0
1974 6.7
1975 10.1
1976 11.3
1977 8.6
1978 7.2
1979 9.1
1980 8.9
1981 9.7
1982 12.2
1983 6.5
1984 5.5
1985 4.6
1986 3.9
1987 4.1
1988 4.3
1989 4.1
1990 4.7
1991 4.8
1992 5.8
1993 2.1
1994 1.9
1995 0.6
1996 1.6
1997 1.6
1998 1.9
1999 0.9
2000 1.5
2001 2.5
2002 3.0
2003 1.6
2004 3.3
2005 1.7
2006 2.2
2007 2.3
2008 1.8
2009 2.5
2010 0.5
2011 1.4
2012 2.8
2013 1.9

In the event of the death of a PSSA contributor, the survivor and children become entitled to an immediate allowance.

Definition of « Survivor » 

The PSSA defines survivor as: 
  1. A person who is the lawful spouse of the contributor, providing the marriage occurred prior to retirement (i.e. ceasing to be employed in the Public Service). In cases where a relationship of a conjugal nature existed prior to the date of marriage, the President of the Treasury Board may direct that the marriage be deemed to have occurred at an earlier date.
  2. A person with whom the contributor was cohabiting in a relationship of a conjugal nature for at least one year prior to the death of the contributor. The relationship must have existed prior to the contributor’s retirement.
In the event of death within one year of marriage, no survivor benefit is payable unless the President of the Treasury Board is provided with satisfactory proof that the contributor’s health at the time of the marriage was such that he/she was expected to live for at least one year.
 
In the case of cohabitation in a relationship of a conjugal nature, documentary evidence must be provided that such a relationship remained continuously in effect at least one year prior to and including the date of the contributor’s death. In this instance, the survivor must submit proof to the Superannuation Directorate of the existence of cohabitation in a relationship of a conjugal nature. Such evidence normally takes the form of statutory declarations from disinterested persons who know the circumstances of the relationship, along with copies of bills, receipts, mortgage papers, leases, joint bank accounts credit accounts and any other relevant documentation.
 
In the event a contributor has both a legal spouse and an eligible survivor with whom he/she has lived in a relationship of a conjugal nature, the survivor benefit will be apportioned between the two claimants. Each survivor’s share of the benefit will be based on the length of cohabitation with the contributor.
 
Within 3 months from the date of notice of entitlement to survivor benefit, the survivor has the option of waiving entitlement to the survivor benefit if such a waiver results in the payment of a minimum benefit or a double rate child’s allowance. The two preceding benefit entitlement options are discussed in further detail below.

« Survivor » Benefit Entitlement 

The PSSA provides a survivor benefit equal to one-half the basic accrued superannuation entitlement of the deceased contributor with at least two years of pensionable service. In other words, the survivor benefit is calculated without regard to C/QPP integration or any reduction which would apply to an annual allowance option.
 
For example, the calculation of a survivor benefit payable in the event of the death of a PSSA contributor at age 45 with 25 years of pensionable service and highest average earnings of $45,000 would be: 1 p.100 X 25 X 45 000 $ = 11 250 $ per annum In this particular instance, the calculation of the survivor benefit foregoes any actuarial reduction regarding the fact that the deceased PSSA contributor had not satisfied the age or service requirements for an immediate annuity as of the date of death. The survivor benefit allowance formula also does not include provision for the C/QPP “reduction factor”. The survivor can receive survivor benefits under C/QPP and will also receive the “full” survivor benefit in accordance with the formula above as prescribed in the PSSA.

Definition of « Child »

The term “child” in accordance with the PSSA, includes a natural child, stepchild or adopted child and means a child of a contributor who is: a) less than 18 years of age, or b) over 18 but less than 25 years of age and in full-time attendance at a school or university, having been in such attendance substantially without interruption since reaching age 18 or since the contributor died, whichever is later.
 
Surviving « Child » Allowance Each eligible surviving “child” is entitled to an immediate allowance equal to one-tenth of the basic accrued superannuation entitlement of the deceased PSSA contributor. If there is no “survivor”, then each eligible surviving “child” is entitled to an immediate allowance equal to one-fifth of the basic accrued superannuation entitlement of the deceased PSSA contributor.
 
The maximum combined amount of “child” allowances payable with respect to one contributor is four fifths of the “survivor” benefit. If there is no “survivor” the maximum combined amount payable would be four fifths of the basic accrued superannuation entitlement of the deceased PSSA contributor. If there are more than 4 surviving “children”, the maximum combined amount payable may be divided among the “children”.
 
Benefits are payable to the survivor and children immediately and are normally paid directly to the survivor. If there the children are not residing with the survivor, the children’s allowances are paid to the person designated as responsible for their custody and control. Also, allowances are normally paid directly to children who are over the age of 18.
 
Minimum Benefit (e.g. PSSA contributor with no survivor or « children ») In the event of the death of a PSSA contributor with a minimum of two years of pensionable service where there is no eligible or no longer any eligible survivor or “children” the greater of the two following amounts is payable to the beneficiary named under the Supplementary Death Benefit (SDB) Plan: 
  • Return of Contributions (ROC) plus interest or 
  • Five years of basic accrued superannuation entitlement (i.e. immediate annuity) payments.
Any benefits already paid to a survivor or “children” (excluding indexing benefits) are subtracted from the foregoing amounts.
 
If the PSSA participant has not named a beneficiary, or the designated beneficiary has not survived the PSSA participant, or the PSSA participant has declined coverage under the SDB Plan, then amount is payable to the estate of the deceased PSSA participant. If the amount is less than $1,000, the President of the Treasury Board will designate the person or persons entitled to payment.
 
Concerns have been raised in regards to the adequacy and fairness of the minimum benefit provisions of the PSSA particularly by PSAC members who are “single” and without “children”.

Verification of length of full-time and part-time pensionable service

The majority of federal departments and agencies provide employees with annual pension and benefit statements. In order avoid any unforeseen surprises or disappointments at the date of retirement, members should verify their length of full-time and part-time pensionable service with their departmental pay and benefits officer well in advance of a pending retirement date. Members are also encouraged to maintain their own employment records and documentation in the eventuality of a dispute or disagreement over superannuation benefit entitlements based on pensionable service.

Elective pensionable service and pension transfer agreements

The amount of a PSSA benefit entitlement is directly dependent on the PSSA participant’s length of pensionable service. The PSSA provides contributors with opportunities to increase pensionable service through elective service provisions and Pension Transfer Agreements.

Elective Service

The types of elective service for which a PSSA contributor could obtain credit include:

  • Prior Federal Public Service Not Included as Pensionable Service
  • Service with the Canadian Forces
  • Service with the Royal Canadian Mounted Police
  • War Service
  • Civilian War Service
  • Service as a Locally-Engaged Employee
  • Service with an International Organization
  • Service as a Member of Parliament
  • Outside Pensionable Employment which is “immediately prior” to employment with the Federal Public Service
  • Previous Periods of Leave without Pay Not Included as Pensionable Service

PSAC members are encouraged to consult with their designated departmental pay and benefits specialist if any of the foregoing represents an opportunity for elective service. A cost estimate can be obtained in advance to assist with assessing whether pursuing a past service election is a viable option. The Treasury Board Secretariat website also includes an elective service buyback estimator.

The cost of electing prior pensionable service is dependent on a number of factors including the type of elective service, the timing of the actual election and the method of payment for the elective service. In all cases involving a “late” election (i.e. more than one year subsequent to commencing contributions to the PSSA) the contributor is also required to pass a medical examination administered by Health Canada in order to validate an election.

Pension Transfer Agreements

Pension Transfer Agreements (PTAs) provide for portability of accrued pension benefits and service between the PSSA and other pension arrangements.

Treasury Board Secretariat website has a list of PTAs in force between the Government of Canada and other pension plan sponsors.

This list is updated frequently. Ordinarily the option to transfer pensionable service via an existing PTA expires after one year of contributor status under the PSSA. However, members retaining pensionable service entitlements with another pension arrangement where no PTA currently exists are encouraged to continue to monitor the Treasury Board Secretariat listing in the eventuality that a PTA is eventually concluded between the Government of Canada and the sponsor of the other pension arrangement. This would then provide the opportunity to transfer the prior pensionable service to the PSSA in an administratively efficient and cost effective manner.

Personal Documentation

Missing and inaccurate personal documentation will result in errors and delays in the processing of superannuation benefit entitlements.

PSSA Regulations identify the documentary evidence required to substantiate entitlement to various superannuation options and benefits.

To avoid any unnecessary hardship and inconvenience, PSAC members are encouraged to ensure that their personal file with the employing department or agency contains current personal documentation and information including:

  1. proof of age of contributor;
  2. accurate designation of beneficiary for Supplementary Death Benefit (Form PWGSC-TPSGC 2196 – “Naming or Substitution of Beneficiary”)
  3. names and detailed contact information of any survivor(s) and children;
  4. proof of age of any survivor(s) and children;
  5. documentation related to marital and family status:
    1. marriage certificate or evidentiary documentation to substantiate cohabitation in a relationship of a conjugal nature;
    2. divorce decree, separation papers, or death certificate of survivor;
    3. where there was a previous marriage, the marriage certificate of that marriage and the death certificate or divorce decree in respect of the former survivor;
    4. where the contributor is living apart from his/her survivor, written record of contributor's view relating to the circumstances;
    5. relevant documentation relating to children (e.g. proof of age, adoption papers, evidence of guardianship, evidence of continuous attendance at qualified educational institution, etc.);
    6. declaration of evidence relating to a change of name (other than by marriage) or reconciling any difference between name on personal documents and name on the appointing certificate.

Pre-retirement Transition Leave

Policy For interested employees within two years of eligibility for an immediate annuity, a Treasury Board of Canada policy exists which provides the opportunity for a gradual transition to retirement.

The Pre-retirement Transition Leave Policy allows employees in these situations to reduce the length of their workweek up to 40 per cent and maintain pension and benefit coverages (as well as required contributions/premiums) at pre-arrangement levels. However, please note that pre-retirement transition leave is subject to managerial approval and discretion, based on operational feasibility.

For more see: Preretirement Transition Leave Policy (Treasury Board)

What happens to benefits and insurance plan coverage in retirement