- Reaction score
- 999
- Points
- 1,160
I believe this has recently been added to the CFPMP Website, FAQs, along with info on the payment of CPP by Cl A and Cl B (under 30 days). This is the first time I have noted the 2008 "the reduction applied would be smaller".
If anything is going to be done on this for the CF, re the claw back, it may be part of the Federal (election) Budget in Feb(?).
CPP Offset
Q30: What is the CPP offset and how does it affect my pension benefits??
A30: Pensions payable to retired members under Part I of the Canadian Forces Superannuation Act (CFSA) are reduced when the retiree reaches age sixty-five or becomes entitled to a pension under the Canada Pension Plan on account of disability. This is because the CFSA pension arrangements are integrated with the provisions of the Canada Pension Plan (CPP).
When the CPP was introduced in 1966, it was decided to coordinate or integrate the national plan with the pension plans that applied to the federal public sector workforce. The integration decision meant that the total pension plan contributions made by members of the federal plan did not increase, but their retirement income would come from both the federal public sector plan and the national plan. Said another way, the benefits of the CPP became available to contributors under the CFSA without any increase in their monthly pension contributions. The total pension contribution amount remained the same, but a portion went to the CPP and the remaining amount went to the CF pension account. Of course, since contributions to the Canadian Forces Superannuation Account were reduced, it was necessary to have a corresponding adjustment to payable benefits. As a result, all pensions payable under the CFSA are adjusted once a retired CF member reaches age sixty-five, the age of eligibility for an unreduced retirement pension under the CPP. If a retired member becomes entitled to a CPP disability pension before reaching age sixty-five, the reduction is made at that time.
These original arrangements have had to be modified somewhat over the years. For example, because of the increase in CPP contribution rates, it became necessary to limit the reduction of the CFSA contributions. As a result, CPP contributions are no longer fully offset from CFSA contributions. However the benefit integration principle remains unchanged.
When the existing reduction formula was adopted in 1966, it was recognized that at some point in the future, the reduction factor in the three major pension plans would have to be revisited as the pension plans and the CPP evolved. Parliament will be asked to approve an adjustment of the reduction factor applied to pension benefits, in the member's favour. If the amendment to the existing reduction factor is enacted, the CPP pension may still be more or less than the reduction of the CF pension; however, beginning in 2008,the reduction applied would be smaller.
If anything is going to be done on this for the CF, re the claw back, it may be part of the Federal (election) Budget in Feb(?).
CPP Offset
Q30: What is the CPP offset and how does it affect my pension benefits??
A30: Pensions payable to retired members under Part I of the Canadian Forces Superannuation Act (CFSA) are reduced when the retiree reaches age sixty-five or becomes entitled to a pension under the Canada Pension Plan on account of disability. This is because the CFSA pension arrangements are integrated with the provisions of the Canada Pension Plan (CPP).
When the CPP was introduced in 1966, it was decided to coordinate or integrate the national plan with the pension plans that applied to the federal public sector workforce. The integration decision meant that the total pension plan contributions made by members of the federal plan did not increase, but their retirement income would come from both the federal public sector plan and the national plan. Said another way, the benefits of the CPP became available to contributors under the CFSA without any increase in their monthly pension contributions. The total pension contribution amount remained the same, but a portion went to the CPP and the remaining amount went to the CF pension account. Of course, since contributions to the Canadian Forces Superannuation Account were reduced, it was necessary to have a corresponding adjustment to payable benefits. As a result, all pensions payable under the CFSA are adjusted once a retired CF member reaches age sixty-five, the age of eligibility for an unreduced retirement pension under the CPP. If a retired member becomes entitled to a CPP disability pension before reaching age sixty-five, the reduction is made at that time.
These original arrangements have had to be modified somewhat over the years. For example, because of the increase in CPP contribution rates, it became necessary to limit the reduction of the CFSA contributions. As a result, CPP contributions are no longer fully offset from CFSA contributions. However the benefit integration principle remains unchanged.
When the existing reduction formula was adopted in 1966, it was recognized that at some point in the future, the reduction factor in the three major pension plans would have to be revisited as the pension plans and the CPP evolved. Parliament will be asked to approve an adjustment of the reduction factor applied to pension benefits, in the member's favour. If the amendment to the existing reduction factor is enacted, the CPP pension may still be more or less than the reduction of the CF pension; however, beginning in 2008,the reduction applied would be smaller.
