The pension plans for the RCMP and the Public Service Pension Plan (PSPP) are broadly very similar. They are both defined benefit pension plans with benefits that are almost identical. Members in almost every situation will see a seamless transition from one plan to the other.
On transfer, all of your service will transfer to the Public Service Pension Plan.
- You will retain all of your years of service as well as any purchased service (buyback)
- As long as you remain continuously employed, deemed CMs will be treated as a Group 1 contributors under the PSPP, regardless of your date of hire. This means that:
- Deemed employees, regardless of the date of hire, will keep their existing normal retirement age of 60 years old. You will be eligible for an unreduced pension at age 60 or age 55 with at least 30 years of pensionable service.
- New hires after the deeming date will have less advantageous terms – they will be treated as Group 2 contributors. This means that they will have a later normal retirement age of 65 years old. They will be eligible for an unreduced pension at age 65 or at age 60 with at least 30 years of pensionable service. Since all plans are cost-shared 50/50 with the employer, Group 2 members also have lower contributions.
- If you leave before the deeming date and then come back after the deeming date, you will be treated as a Group 2 contributor.
With the administration of contributions and benefits, very little will change.
Your contributions will remain identical under the PSPP.
Benefits do have some small differences – some are superior in the PSPP and some are inferior:
- Under the PSPP, the vesting period is 2 years (5 years in the RCMP Plan). The vesting period is the time it takes to have the right to keep the employer’s contributions to your pension plan. Shorter is better.
- The PSPP has a lock-in provision that does not allow a member to take out the commuted value of their pension after they hit age 50. The RCMP plan has no such limitation before a member begins to draw their pension.
- Acting pay is pensionable in the PSPP. It is not pensionable in the RCMP plan.
- Retirement eligibility: In the PSPP, there is no 35-year rule as exists right now in the RCMP Plan (unreduced pension after 35 years of service). Both plans have the same normal retirement age for current employees, but in the PSPP, an employee must be at least 55 years old to get an unreduced pension, even if you have more than 35 years of service. This can impact anyone who was hired before age 20 and has worked continuously since then. Under the RCMP plan, this person would be eligible for an unreduced pension before age 55.