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New Pension Contribution Rates

dapaterson

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The new contribution rates for the PSSA have been released for 2013, 2014 and 2015; CFSA rates will likely follow suit.

http://www.tbs-sct.gc.ca/pensions/notices-avis/2012-12-14-eng.asp

2013 rates:

To YMPE: 6.85%
Above YMPE: 9.20%


2014 rates:

To YMPE: 7.5%
Above YMPE: 9.8%


2015 rates:

To YMPE: 8.15%
Above YMPE: 10.40%


Note that given recent changes to the PSSA, anyone joinin the PSSA after 01 January 2013 will pay at lower rates
 
Having looked at the link you provided it's not so scary as I feared it might be.  I would say that it will more or less, however, take out the incentive pay each year but the looks of it.  I was envisioning worse than that.
 
And it's official:

CANFORGEN 250/12 CMP 117/12 211435Z DEC 12
PENSION CONTRIBUTION RATES FOR MEMBERS OF THE PART 1 CF PENSION PLAN (FULL TIME) FOR CALENDAR YEARS 2013-2015
UNCLASSIFIED


REF: CANFORGEN 238/12 CMP 113/12 121812Z DEC 12



FURTHER TO REF, THE PURPOSE OF THIS CANFORGEN IS TO ADVISE CF MEMBERS OF THE PENSION CONTRIBUTION RATES AS ANNOUNCED BY TREASURY BOARD, TO TAKE EFFECT 1 JAN 13 FOR CALENDAR YEARS 2013-2015


REG AND RES F MEMBERS WHO CONTRIBUTE TO THE FULL-TIME PENSION PLAN (CFSA PART I) WILL PAY:


FOR 2013, 6 POINT 85 PERCENT ON EARNINGS UP TO THE MAXIMUM COVERED BY THE CANADA/QUEBEC PENSION PLAN (C/QPP) AND 9 POINT 2 PERCENT ON EARNINGS OVER THE MAXIMUM COVERED BY C/QPP. THIS REPRESENTS AN INCREASE OF POINT 65 PERCENT AND POINT 6 PERCENT RESPECTIVELY. THE MAXIMUM EARNINGS COVERED BY C/QPP FOR 2013 WILL BE 51,100 DOLLARS


RATES FOR 2014 WILL BE 7 POINT 5 PERCENT UP TO THE C/QPP MAXIMUM AND 9 POINT 8 PERCENT ON EARNINGS ABOVE THE MAXIMUM


FOR 2015 THE RATES WILL BE 8 POINT 15 PERCENT UP TO THE C/QPP MAXIMUM AND 10 POINT 4 PERCENT ON EARNINGS ABOVE THE MAXIMUM


BY WAY OF ILLUSTRATION, A MEMBER EARNING 60,000 DOLLARS WILL PAY 6 POINT 85 PERCENT ON EARNINGS TO A MAXIMUM OF 51,100 DOLLARS AND 9 POINT 2 PERCENT ON THE REMAINING 9,900 DOLLARS OF EARNINGS. THIS MEMBER WOULD SEE A MONTHLY INCREASE OF 30 DOLLARS 31 CENTS IN CONTRIBUTIONS OVER 2012 CONTRIBUTIONS


THESE RATES WILL BE APPLIED ON THE 15 JAN 13 PAY


THIS ADJUSTMENT DOES NOT AFFECT CONTRIBUTIONS TO THE CF PART-TIME PENSION PLAN (RES F PLAN CFSA PART 1.1) WHICH WILL REMAIN AT 5 POINT 2 PERCENT OF PENSIONABLE EARNINGS


FOR MORE INFORMATION ABOUT CF PENSION PLAN ARRANGEMENTS, INCLUDING CONTRIBUTION RATES, CONSULT THE DPSP WEBSITE AS FOLLOWS: HTTP://WWW.CMP-CPM.FORCES.GC.CA/DGCB-DGRAS/PS/PEN/INDEX-ENG.ASP QUESTIONS MAY BE DIRECTED BY EMAIL TO: (PLUS SIGN)DPSP.PENSION.DPPS(AT SIGN)FORCES.GC.CA


SIGNED BY RADM A. SMITH, CMP
 
Cool, thanks.

Any work on corresponding increases to the reserve force pension contributions?
 
Brihard said:
Cool, thanks.

Any work on corresponding increases to the reserve force pension contributions?

Well, how about

THIS ADJUSTMENT DOES NOT AFFECT CONTRIBUTIONS TO THE CF PART-TIME PENSION PLAN (RES F PLAN CFSA PART 1.1) WHICH WILL REMAIN AT 5 POINT 2 PERCENT OF PENSIONABLE EARNINGS
 
dapaterson said:
Well, how about

THIS ADJUSTMENT DOES NOT AFFECT CONTRIBUTIONS TO THE CF PART-TIME PENSION PLAN (RES F PLAN CFSA PART 1.1) WHICH WILL REMAIN AT 5 POINT 2 PERCENT OF PENSIONABLE EARNINGS

Perhaps they figured they'd raped us enough with the 7% compound interest on the buyback. ::)
 
dapaterson said:
Well, how about

THIS ADJUSTMENT DOES NOT AFFECT CONTRIBUTIONS TO THE CF PART-TIME PENSION PLAN (RES F PLAN CFSA PART 1.1) WHICH WILL REMAIN AT 5 POINT 2 PERCENT OF PENSIONABLE EARNINGS

Yes, I know. I'm not going to sit here and easily believe that we're going to see our pension untouched for very long when everyone else's contributions are going up. I was thinking along the lines of 'what's coming down the pipe', RUMINT, etc. It makes sense that any examination thereof would be a separate policy approach that would be separately announced, and that the CANFORGEN for the reg force pension would be annotated accordingly.  Fair to say?
 
The problem is that there's very little data available on what the pension is actually going to cost, once all the buybacks are sorted out.  Thus far, from what I recall reading, the buybacks have been close to the 50:50 sharing that's the long-term target for all government pension plans.  There are also very few folks retiring with significant part I.1 pensions so far, so there's still a reliance on actuarial models vice actual data.

My personal opinion (unsupported by any secret background information, leaked documents or personal interviews with Treasury Board staff) is that we will see some increases over the next few years; if interest rates remain low, I suspect we'll see contributions creep up.

Doing a very quick and very dirty spreadsheet, I'd estimate that if the plan is earning 2% returns, contributions would need to grow to around 7%; if the plan can earn around 3.5%, the plan is probably sustainable at or around the current contribution rate.  While that sounds low, keep in mind that the plans maintain a large balance in low-risk investments to pay current retirees, which depresses overall performance compared to some market indexes.


[soap box]

Ideally, the CF wouldn't have two pension plans at all, but would rather see Reservists contribute to the Reg F plan, and only vest in that plan once they have 730 days of CF service* (that is, two years - just like any Reg F member).  Administration would be greatly simplified (and costs reduced); portability between Reg and Res would be automatic; and support tools would be usable by all CF members.

There's adequate legislative cover to do such a thing; all that's lacking is the will.

[/soap box]

*CF Service, as defined in the Canadian Forces Superannuation Regulations, is calculated for Reservists as One Day of CF Service for each day worked on class B or C service, and One Point Four days of CF Service for each day worked on class A service.
 
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