MJP
Army.ca Fixture
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Over the last few months I've seen people refer to the pension reform and the changes to the terms of service, and usually give wrong advice or interpretations of both. I've bit my tongue, mostly because I didn't know all the changes that were proposed myself. I think a lot of bad info was conveyed by some really bad powerpoint presentations that were floating around a while back in the DIN email system. I did quite a bit of research on them overseas, and recently had a brief on them at the unit, which was pretty thorough.
To clear up some misconceptions about both I've poached some info from a DND site as well as put in both URLs where you can get information. It's pretty important stuff, for anyone in the military or thinking of joining the reserves or reg force.
Pension Reform
Key changes include:
"¢ Two-year vesting
"¢ Twenty-five-year pension
"¢ De-linking pension eligibility from Terms of Service
"¢ Portability of pension credits
"¢ Pension coverage for Reserve Force
"¢ Greater administrative flexibility
The proposed amendments would provide greater flexibility for CF members by allowing breaks in service and transfers between components without adversely affecting pension credits earned. As well, members would be able to know well in advance of retirement or of reaching a particular Terms of Service gate what their pension benefit would be.
Changing needs and expectations are behind the introduction of unreduced pensions for members after they have served at least 25 complete years of paid CF service (regardless of their age). In a recent survey, serving CF members-like other Canadians-indicated an interest in job security for longer periods of time than under current Terms of Service. At the same time, members also expect the pension plan will continue to recognize the lifetime implications of long years as an active member of the CF. This 25-year pension scheme meets these needs and also provides a balanced way to accommodate both current retention pressures and the continuing requirements for maintaining the core capability of a modern military.
Members who have served for 10 years or more and who are released because their health no longer allows them to carry out their military duties would be entitled to an immediate pension.
Retiring members who are not entitled to receive their pension until age 60 would be able to choose to receive their pension at any time between ages 50 and 60. In such cases, there would be a reduction in the monthly amount to take into account the fact that the pension would be paid over a longer period.
Members who qualify for deferred pensions when they leave the CF would, in specified circumstances, be able to transfer the actuarial value of their pension into another prescribed retirement savings vehicle.
These provisions, along with the lower vesting period (i.e., the minimum period required to qualify for a pension-type benefit) of two years and the greater portability of pension credits to other pension plans (authorized under earlier pension reform legislation) would give members more control and choice over their career paths and their financial and retirement planning.
Providing appropriate pension coverage for Reserve Force members is another important element of the overall pension modernization effort. As a result of the 1999 pension reform, regulations are being developed that would implement pension arrangements for the vast majority of Reservists who serve part-time or for limited periods of full-time service. These pension arrangements, however, are not suitable for Reservists who serve on a full-time basis for extended period of times.
Pension reform http://www.forces.gc.ca/hr/cfpn/engraph/7_03/7_03_cfsa_e.asp This link also has some case scenarios if you scroll to the bottom.
Terms of Service
Career model
At the beginning of their careers, CF members would serve a variable, occupation-specific initial engagement of three to nine years with the length being determined by the responsible Managing Authority. (A Managing Authority is the organization responsible for an occupation, i.e., Army, Navy, Air Force or - for occupations common to all three - the Canadian Forces Recruiting, Education and Training System.) Occupations requiring lengthy or expensive training would have a longer initial engagement so the CF would realize a better return on investment.
After this initial engagement, members may be offered one of three TOS options, depending on the needs of the occupation and the
Managing Authority's policy:
an indefinite period of service until retirement age;
an intermediate engagement of service to 25 years; or
one or more continuing engagements.
Option one - an indefinite period of service to retirement - could enhance retention and improve the member's sense of security. An indefinite period of service would be offered based on the requirements of the occupation, determined by annual military occupational reviews. The use of this option would be up to the applicable Managing Authority.
Option two - expanding the initial engagement to 25 years - is advantageous for officers who currently, if they service past 20 years, have to continue to 28 years' service to get an immediate unreduced annuity. This option is also preferred by non-commissioned members, who indicated to project researchers that they were too young to retire at 20 years' service and would rather serve to 25 years. After the intermediate engagement is completed at 25 years, members may be kept on through one or more continuing engagements or an indefinite period of service until retirement age, depending on the needs of the Managing Authority and the wishes of the member.
Option three - a series of continuing engagements after the initial engagement - will enable the environments to keep a person for a few more years, or cater to individual requests for short extensions.
The three options provide flexibility for management and a broader array of options for member.
For example the infantry is keeping the system they have in place right now. Two 3 year BE/VIEs, followed usually by an IE offer. The only change is the IE is now 25 years for a full unreduced 50% pension.
Terms of service changes http://www.forces.gc.ca/site/newsroom/view_news_e.asp?id=254
I'll see if I can dig up the powerpoint presentation I was shown last week. Breaks this down into very simple terms.
Cheers
To clear up some misconceptions about both I've poached some info from a DND site as well as put in both URLs where you can get information. It's pretty important stuff, for anyone in the military or thinking of joining the reserves or reg force.
Pension Reform
Key changes include:
"¢ Two-year vesting
"¢ Twenty-five-year pension
"¢ De-linking pension eligibility from Terms of Service
"¢ Portability of pension credits
"¢ Pension coverage for Reserve Force
"¢ Greater administrative flexibility
The proposed amendments would provide greater flexibility for CF members by allowing breaks in service and transfers between components without adversely affecting pension credits earned. As well, members would be able to know well in advance of retirement or of reaching a particular Terms of Service gate what their pension benefit would be.
Changing needs and expectations are behind the introduction of unreduced pensions for members after they have served at least 25 complete years of paid CF service (regardless of their age). In a recent survey, serving CF members-like other Canadians-indicated an interest in job security for longer periods of time than under current Terms of Service. At the same time, members also expect the pension plan will continue to recognize the lifetime implications of long years as an active member of the CF. This 25-year pension scheme meets these needs and also provides a balanced way to accommodate both current retention pressures and the continuing requirements for maintaining the core capability of a modern military.
Members who have served for 10 years or more and who are released because their health no longer allows them to carry out their military duties would be entitled to an immediate pension.
Retiring members who are not entitled to receive their pension until age 60 would be able to choose to receive their pension at any time between ages 50 and 60. In such cases, there would be a reduction in the monthly amount to take into account the fact that the pension would be paid over a longer period.
Members who qualify for deferred pensions when they leave the CF would, in specified circumstances, be able to transfer the actuarial value of their pension into another prescribed retirement savings vehicle.
These provisions, along with the lower vesting period (i.e., the minimum period required to qualify for a pension-type benefit) of two years and the greater portability of pension credits to other pension plans (authorized under earlier pension reform legislation) would give members more control and choice over their career paths and their financial and retirement planning.
Providing appropriate pension coverage for Reserve Force members is another important element of the overall pension modernization effort. As a result of the 1999 pension reform, regulations are being developed that would implement pension arrangements for the vast majority of Reservists who serve part-time or for limited periods of full-time service. These pension arrangements, however, are not suitable for Reservists who serve on a full-time basis for extended period of times.
Pension reform http://www.forces.gc.ca/hr/cfpn/engraph/7_03/7_03_cfsa_e.asp This link also has some case scenarios if you scroll to the bottom.
Terms of Service
Career model
At the beginning of their careers, CF members would serve a variable, occupation-specific initial engagement of three to nine years with the length being determined by the responsible Managing Authority. (A Managing Authority is the organization responsible for an occupation, i.e., Army, Navy, Air Force or - for occupations common to all three - the Canadian Forces Recruiting, Education and Training System.) Occupations requiring lengthy or expensive training would have a longer initial engagement so the CF would realize a better return on investment.
After this initial engagement, members may be offered one of three TOS options, depending on the needs of the occupation and the
Managing Authority's policy:
an indefinite period of service until retirement age;
an intermediate engagement of service to 25 years; or
one or more continuing engagements.
Option one - an indefinite period of service to retirement - could enhance retention and improve the member's sense of security. An indefinite period of service would be offered based on the requirements of the occupation, determined by annual military occupational reviews. The use of this option would be up to the applicable Managing Authority.
Option two - expanding the initial engagement to 25 years - is advantageous for officers who currently, if they service past 20 years, have to continue to 28 years' service to get an immediate unreduced annuity. This option is also preferred by non-commissioned members, who indicated to project researchers that they were too young to retire at 20 years' service and would rather serve to 25 years. After the intermediate engagement is completed at 25 years, members may be kept on through one or more continuing engagements or an indefinite period of service until retirement age, depending on the needs of the Managing Authority and the wishes of the member.
Option three - a series of continuing engagements after the initial engagement - will enable the environments to keep a person for a few more years, or cater to individual requests for short extensions.
The three options provide flexibility for management and a broader array of options for member.
For example the infantry is keeping the system they have in place right now. Two 3 year BE/VIEs, followed usually by an IE offer. The only change is the IE is now 25 years for a full unreduced 50% pension.
Terms of service changes http://www.forces.gc.ca/site/newsroom/view_news_e.asp?id=254
I'll see if I can dig up the powerpoint presentation I was shown last week. Breaks this down into very simple terms.
Cheers
