Pension Modernization - Breaking The Trust

[johnbastien]

Violation of Trust

Many years ago I signed an IPS.  I went to check my pension and found they violated the agreement I made with the people of Canada. I was expecting to get my 52% pension and apply for a competition that I had a good chance at.  Well they took that away.  They spit on their end of the deal.  They violated the agreement I had with the people of Canada.  They invented a stop loss it seems.  Now after 26 years I can only get a 40% pension if I get the job.  There is no honour any more.  Gone are my dreams of having a home and a job in a place I like or bury my daughter in the place she loved.  I feel so violated I am sick to my stomach.  A trust broken can never be fixed.

Here is a copy of what they sent me.

With the introduction of the new CFSA, there are a few changes. The rules for IE/IPS wrt the length of time that must be served so that the member can release with an immediate unreduced annuity have been amended. Over the next three years, IE/IPS mbrs will be able to release earlier, on a sliding scale. For 2007, the member on IE/IPS must serve 27 years and 1 day. In 2008 service must be 26 years and 1 day, 2009 25 years and 1 day. You would have to serve the 27 years 1 day to avoid a penalty on the IPS portion of your annuity, the IE 20 is protected.
Or, you can release under the new rules.

 

[dapaterson]

I would investigate this more closely if I were you.  My understanding of the amended regulations is that the restrictions apply to officers with more than 20 and less than 27 years of service - who, under the old plan, were already in a pension trap.  Under the amended regulations, with the move to the 25 year pension, several interim measures were injected to keep those people in the pension trap a little while longer.

Looking at the CF Superannuation Regulations (http://laws.justice.gc.ca/en/ShowFullDoc/cr/C.R.C.-c.396///en), I see the following:

4. For the purposes of subsection 16(2) of the Act, the number of years of Canadian Forces service that is greater than the minimum number of 25 years

(a) in the case of an officer of the rank of colonel and above,

(i) from March 1, 2007 until December 31, 2007 is 28 and, for those purposes, 10,227 days of Canadian Forces service is considered to equal 28 years,

(ii) from January 1, 2008 until December 31, 2008 is 27 and, for those purposes, 9,861 days of Canadian Forces service is considered to equal 27 years, and

(iii) from January 1, 2009 until December 31, 2009 is 26 and, for those purposes, 9,496 days of Canadian Forces service is considered to equal 26 years; and

(b) in the case of any other officer, from March 1, 2007 until December 31, 2007 is 26 and, for those purposes, 9,496 days of Canadian Forces service is considered to equal 26 years.

There have always been penalties in the CFSA for officers releasing with more than 20 but less than 27 years of service; the new CFSA will, within a few years, eliminate those penalties and link pension benefits solely to years of service, not terms of service.  The minimum will be at 25 vice 20 years, however.

For NCMs with 25+ years of service there should be no changes.

I'd stress again: check the regulations and the act, and check with the release office; people do make mistakes, particularly when complex systems like the pensions are changed.

 

[EW]

Mate,

Note sure if it helps in your case, but if you go to the CFSU(O) website.  Available on the internet at http://www.cfsuo.forces.gc.ca/whatsnew_e.asp  there are three links under the topic CF Pension Modernization - 1 Mar 2007.  The decision tree was helpful to me.

Cheers.