Collective Bargaining and Compensation Services:� Pension & Benefits Team

�Hosted by Asif Mohammed

President, NR Sub-Group Hamilton-Burlington, PIPSC

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Wednesday, February 19, 2025

Presented by:

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Shirley Elliott-Miron & John Staric

Pensions & Benefits Officers

Professional Institute of Public Service Canada (PIPSC)

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Today's Agenda

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Indigenous Land Acknowledgement

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The Professional Institute of Service Canada (PIPSC)

• and the Role of a Pension and Benefits Officer

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Your Public Service Pension Plan (PSPP)

• Your Defined Benefit (DB) Pension Plan (PSPP, PSPIB)
• Contribution rates and application
• Deficiencies and Prior Service BuyBack
• Statement of Option upon termination or retirement
• Supplementary Death Benefit (SDB)

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Other benefits

• Public Service Health Care Plan (PSHCP)
• Public Service Dental Care Plan (PSDCP)
• Disability Plan (DI Plan) (Sunlife FInancial vs Industrial Alliance)

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The Role of a Pension & Benefits Officer

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Our Purpose - Building community to act collectively to improve our members’ lives.

Our Mandate - is to provide the highest quality representation to members collectively and individually

• by providing effective bargaining, labour relations and other member services,
• by actively promoting and defending the rights and interests of members
• by vigorously safeguarding and promoting professional standards

Our Values:

• Respect
• Integrity
• Co-operation
• Accountability

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Your Public Service Pension Plan (PSPP)

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• Group 1 or Group 2 are based on Hire Date
• Maximum pensionable service maximum 35 years
• Maximum age to delay your pension to is December 31 of the year you turn 71.
• PSP Investments, a Crown corporation established on April 1, 2000, manages pension funds for Canada's federal Public Service, Canadian Forces, and RCMP, with $264.9 billion in net assets as of March 31, 2024.
• Conference Board of Canada
• 2023 DB plan supported more than one million pensioners in Ontario and their pension benefits contributed to over 34 billion to the Ontario gross domestic product. More than 3% of the province’s GDP
• Deficit vs Surplus Key Takeaways
• Contributions formula including Bridge Benefit
• Deficiency vs BUYBACK
• Termination and Retirement Options
• Immediate Annuity
• Transfer Commuted Value
• Deferred Pension
• Death Benefits
• Supplemental Death Benefit lump sum payment
• Survivor Spouse and/or Child monthly survivors benefit, index annually

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PSPP History

PSPIB Investment and Administration

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https://www.investpsp.com/en/news/psp-investments-delivers-solid-financial-returns-in-a-complex-investment-environment/#:~:text=The%20Public%20Sector%20Pension%20Investment%20Board%20(PSP%20Investments)%20is%20one,as%20of%20March%2031%2C%202024.

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Deficit vs. Surplus: Key Takeaways

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By understanding these principles, individuals, businesses, and governments can make informed financial decisions to balance risk and reward, ensuring long-term prosperity.

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PSPP: Your Contributions

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PSPP Pension Plan Contribution Formula

Factors to consider in the calculation of annual lifetime pension. This is based on your average salary of your five consecutive years of highest paid service and your years of pensionable service, as follows:

• Bridge is equal to 0.625% times your AMPE x years of service
• Formula including Bridge (1.375 + 0.625 ) = 2% the AMPE (the of average maximum Pension of YMPE).
• Bridge Benefit is paid up to age 65; then CPP Retirement Pension begins.
• Is a 2% plan until age 65, then at 65 is 1.375% to the AMPE and 2% above, (see example calculation - take away the bridge, replace with CPP Retirement Pension Income)
• DB monthly Pension Benefit is calculated based on an actuarial formula including contributions and years of pensionable service.
• Requires an actuarial valuation and analysis, unique to each member.

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Retirement Income from the PSPP

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PSPP Deficiencies VS

Prior Service Buyback

Pensionable service is a key part of the formula used to calculate your future pension. The more service you have when you retire, the larger your pension will be. You earn service for every day that you contribute to the Plan, andt in some cases buy prior service, deficiencies are pension contributions not collected due a leave without pay .

• If you were off work, unpaid, for a period of time (a Leave of Absence), this will create a gap in your pensionable service. You may be able to repay contributions for leave service to ensure there is no service gap.
• If you were paid out for the service you earned with another Registered Pension Plan (RPP), you may be able to use those funds to buy prior service BuyBack service in PSPP.

BUYBACK Service buyback contributions

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• When you elect to buy back service, you must make contributions for that purpose, in addition to your regular contributions for current service. You are considered to have received a certain salary during each year of service that you want to buy back, and a contribution rate is prescribed for each of those years.

PSPP Normal VS Late Election

Contribution Rates BuyBack

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Normal and late election contributions

• If you make a normal election, that is, if you make an election within one year of becoming a public service pension plan member, your buyback contributions are based on your salary rate when you last became a member of the public service pension plan. The cost of buying back service increases after the first year of membership, as your salary rises and interest continues to accrue. Therefore, it is more advantageous for you to make your election in the first year.
• If you make a late election, that is, after one year of becoming a public service pension plan member, your buyback contributions are based on the salary payable to you at the date of the election. In many cases, a late election could mean a much higher cost.

Contribution rates for buying back service

• Your contribution rate may be single or double, depending on whether the type of service requires you to pay employee or both employee and employer-matching contributions.
• The cost of buying back service includes 4 percent interest calculated from the middle of each fiscal year of service that is bought back to the first day of the month in which you make the election.
• Since April 1, 1970, the contributions made to buy back service cover the cost of protection from inflation.
• The cost of buying back service depends on the types of prior service you elect to buy back, in addition to the timing of your election (normal or late election):

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PSPP - Plan Options

Compare the Public Service Pension Plan to the Average Pension Plan

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How many working Canadians have registered pension plans?

• According to StatsCan, In 2023, 6.9 million working Canadians—34 percent of all employed people—were covered by a registered pension plan. Nov 25, 2024
• Of those, under 50% have a DB Plan (mostly Government Employees, including municipal, provincial and Federal)

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What do you have that others don’t?

• A well-funded DB pension plan
• Indexing
• Deficiencies, Buybacks, Prior Service

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What do others have that you don’t?

• Most Pension Plans, especially private sector, contribute much less
• More options on retirement Death Benefit Survivor 60% to 100% benefits
• More equity on marriage after retirement

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Define Benefit vs Defined Contribution; What is the difference?

CPP Retirement Benefit

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Canada Pension Plan (CPP)

• The Canada Pension Plan pays a monthly amount which was originally designed to replace about 25% of the contributor's earnings on which the initial contributions were based. In 2019, the monthly maximum increased to 33.3%.

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• How much does the average person get from CPP?
• CPP is only available to Canadians who have made contributions. CPP payment rates vary person to person, based on your work history and when you decide to start taking your benefit. For 2025, the maximum monthly benefit is $1,433 but the average monthly benefit is only $808.14.

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• CPP is not guaranteed it is based on eligibility criteria

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OAS & GIS explained

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What is OAS, how does it work, Eligibility, OAS is not guaranteed it is based on eligibility criteria that most Canadians qualify for

Old Age Security (OAS) (Bold italic IN CANADA) (Outside Canada Purple font)

• The Old Age Security (OAS) pension is a monthly payment you can get if you are 65 and older.
• Service Canada will be able to automatically enroll you for the OAS pension if sufficient information is available. Service Canada will inform you if you have been automatically enrolled.
• Employment history is not a factor in determining eligibility. You can receive the Old Age Security (OAS) pension even if you have never worked or are still working.
• If you are living in Canada, (outside Canada) you must:
• be 65 years old or older
• be a Canadian citizen or a legal resident at the time we approve your OAS pension application
• have resided in Canada for at least 10 years (20 years) since the age of 18
• have been a Canadian citizen or a legal resident of Canada on the day before you left Canada
• Canadians working outside Canada for Canadian employers
• NOTE: OAS is not guaranteed it is based on eligibility criteria that most Canadians qualify for

Guaranteed Income Supplement (GIS)

All Members of PIPSC will earn more than 14 Thousand per year - not eligible

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Question and Answer Period

Will the meeting be recorded? When and how can I access?

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Yes, access via PIPSC Website: https://pipsc.ca/labour-relations/pension-benefits

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Did You Know - The PSPP is the best pension plan in Canada? https://www.google.com/search?q=What+is+the+best+pension+plan+in+Canada%3Fn&sca_esv=88e8d308c72480cf&rlz=1C1GCEA_enCA1118CA1119&ei=gTygZ8GCB5HgwN4Ps7_BmQw&ved=0ahUKEwiBx-SZzKaLAxURMNAFHbNfMMMQ4dUDCBA&uact=5&oq=What+is+the+best+pension+plan+in+Canada%3Fn&gs_lp=Egxnd3Mtd2l6LXNlcnAiKVdoYXQgaXMgdGhlIGJlc3QgcGVuc2lvbiBwbGFuIGluIENhbmFkYT9uMggQIRigARjDBDIIECEYoAEYwwRI5gJQAFgAcAB4AJABAJgBf6ABf6oBAzAuMbgBA8gBAPgBAvgBAZgCAaACggGYAwCSBwMwLjGgB_cC&sclient=gws-wiz-serp

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We have answers to

your questions!

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Refer to FAQ included in slide deck

I have other questions or

concerns? - Who should I ask or go to for help?

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Refer to Links & Resources

Collective Bargaining and Compensation Services

Contact Us: Pension and Benefits Team

Pension & Benefits Website https://pipsc.ca/labour-relations/pension-benefits

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General Inquiry email for assistance:

• PIPSC Pensions & Benefits Team: pensionsbenefits@pipsc.ca

Frequently Asked Questions (FAQ)

Q1: What are my options if I am work force adjusted/leaving the PS? What are the consequences of those options if I ever return to the PS? Thanks again (Ken Tsang)

A1: Unless WFA documentation specific, same options on termination or retirement apply - Statement of Option upon termination will be issued to the member with the calculations to validate each option. Retire, Deferred Retirement, Payout of Commuted Transfer Value.

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Q2: What happens to the pension earned if an employee is terminated  or Fired from the job for any reason. Will that employee receives pension earnings for the number of years of service performed. (submitted on behalf of member by Asif)

A2: Statement of Option upon Termination will be issued to the member with the calculations to validate each option. Retire, Deferred Retirement, Payout of Commuted Transfer Value.

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Q3: Does the PSPIB and the Government follow Environmental, Sustainable Governance (ESG) practices?

A3: Both PSPIB and the Government of Canada integrate ESG into their policies, investment strategies, and regulatory frameworks to promote sustainability and responsible governance

Q4: How can I increase the amount of service that my pension is based on?

A4: Employees who became plan members on or before December 31, 2012 can obtain a cost estimate for buying back prior service by using the service buyback estimator, located in the Compensation Web Applications (CWA) (page available on Government of Canada network only) Active Member Pension Applications. For those who became plan members on or after January 1, 2013, changes are being made to the personalized pension tools, which include the service buyback estimator, to reflect the current pension plan rules.

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Q5: Will members receive an annual pension statement

A5: Information and Services about the PSPP specific to you (active, retired Survivors) Learn about participating in the pension plan, retirement income sources and pension options.pension-services/pension/eaopp-sappt-eng.html

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Frequently Asked Questions (FAQ)

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Q6: What happens on Death of Member

A6a): Survivor Benefits is payable at 50% of members monthly pension benefit to the surviving spouse as well as a child allowance provision at 10% of members monthly benefit. IF no surviving spouse; then child allowance increases to 20%.

A6b) SDB The Supplementary Death Benefit is a lump-sum benefit equal to twice your annual salary rounded up to the nearest $1,000, payable to your designated beneficiaries. If you haven’t designated beneficiaries, the death benefit will be payable to your estate. The benefit amount automatically increases as your salary increases.

Starting at age 66, the coverage decreases by 10% each year to a minimum of $10,000 by age 75. For example, if you are covered for $60,000 at age 65 and your salary does not change, your coverage declines to $54,000 at age 66, $48,000 at age 67, and so on until it reaches $10,000. The yearly decrease takes effect on April 1 or October 1, whichever date comes first after your birthday.

Q7: What is CPP, how does it work, Eligibility, Not Guaranteed

A7: Canada Pension Plan (CPP)

• The Canada Pension Plan pays a monthly amount which was originally designed to replace about 25% of the contributor's earnings on which the initial contributions were based. In 2019, the monthly maximum increased to 33.3%.
• How much does the average person get from CPP?
• CPP is only available to Canadians who have made contributions. CPP payment rates vary person to person, based on your work history and when you decide to start taking your benefit. For 2025, the maximum monthly benefit is $1,433 but the average monthly benefit is only $808.14.
• CPP is not guaranteed it is based on eligibility criteria

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Frequently Asked Questions (FAQ)

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Q8: What is OAS, how does it work, Eligibility, OAS is not guaranteed it is based on eligibility criteria that most Canadians qualify for

A8: Old Age Security (OAS) (Bold italic IN CANADA) (Outside Canada Purple font)

• The Old Age Security (OAS) pension is a monthly payment you can get if you are 65 and older.
• Service Canada will be able to automatically enroll you for the OAS pension if sufficient information is available. Service Canada will inform you if you have been automatically enrolled.
• Employment history is not a factor in determining eligibility. You can receive the Old Age Security (OAS) pension even if you have never worked or are still working.
• If you are living in Canada, (outside Canada) you must:
• be 65 years old or older
• be a Canadian citizen or a legal resident at the time we approve your OAS pension application
• have resided in Canada for at least 10 years (20 years) since the age of 18
• have been a Canadian citizen or a legal resident of Canada on the day before you left Canada
• Canadians working outside Canada for Canadian employers

Q9: Are all types of leaves pensionable?

A9: No, only leaves approved under the Employment Standards Act are pensionable. See details: https://www.tpsgc-pwgsc.gc.ca/remuneration-compensation/services-pension-services/pension/info/ticnp-lwpip-eng.html#no1

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• PayCentre

Phone Numbers: Toll-Free: 1-855-686-4729 Local: (506) 424-4330 TTY:

1-855-393-1558 Monday to Friday, 7 am to 7 pm eastern time.

By fax: 1-855-393-1559

Email: (N/A)

By the post (in writing) Public Service Pay Centre – Mail Facility Public Works and

Government Services Canada PO Box 6500 Matane, Quebec G4W OH6

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• PSPP Pension Centre Pension Centre contact details:

Phone Toll free: 1-800-561-7930 Monday to Friday 8 a.m. to 4 p.m. (your local time)

By fax: 418-566-2865 Email: pensioncentrecaf.centredespensionsfac@tpsgc-pwgsc.gc.ca

By the post (in writing) Public Services and Procurement Canada Government of Canada Pension Centre — Mail Facility PO Box 9500 Matane, QC G4W 0H3

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• Public Service Health Care Plan Member (PSHCP)

https://pipsc.ca/labour-relations/health-plan

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• Public Service Dental Care Plan (PDCP)

https://www.canada.ca/en/treasury-board-secretariat/topics/benefit-plans/plans/dental-c

Are-plan.html

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• Treasury Board Secretariat (TBS): link to CWA form, info etc https://www.canada.ca/en/treasury-board-secretariat/topics/pension-plan.html

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Sunlife Financial: https://www.sunlife.ca/sl/fdi/en/

The Disability Insurance (DI) Plan is available to employees of the federal public service who are represented by bargaining agents. The plan, administered by the Sun Life

Assurance Company of Canada (Sun Life), provides benefits to eligible employees who become totally disabled as a result of an illness or injury

For more information Call our toll-free number: -800-361-5875 or

FAX our toll-free number: 1-866-639-7849.

disabilityclaims@sunlife.com

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Industrial Alliance Disability Management:

The Disability Insurance Plan of the Public Service Management Insurance Plan (PSMIP) is available to employees of the federal public service who are excluded from the collective bargaining process. It provides a monthly income benefit for employees who are unable to work for a lengthy period of time because of a totally disabling illness or injury.

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Customer Service business hours Monday to Friday: 7:30 am to 8:00 pm (ET)

1-800-830-1255 (Dedicated line for PSMIP)

1-877-781-1583

disabilityclaims@ia.ca

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