Pension Transfer Value / Lump Sum Pymt [Merged]

kolkol

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Hey all,

Just a quick question. Having researched a bit I know you get a return of contributions if let's say you VR with less than 10 years in (at least I think you do)....I always thought there was a return of contribution when you leave once your VIE is completed, but a PO informed me there isn't. Is there or isn't there? And, ballparking it, how much would it amount to?

Thanks
 

dapaterson

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There is no longer a return of contributions if you are vested in the plan .  Vesting occurs at the 2 year mark.  However, there are different options on release when you are vested.

There is a lot of information on the CMP website.  Go to http://www.cmp-cpm.forces.gc.ca/pen/index-eng.asp and start reading.
 

dapaterson

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Further to my last:

What pension benefits am I entitled to if I release and I’m under age 50 with two or more years of pensionable service?

If you release before age 50 and have at least two years of pensionable service, you are entitled to the value of your pension earned up to the date of your release. Your earned pension includes the share of your pension paid by the Federal Government on your behalf. This pension is a valuable part of your overall compensation as a member of the Canadian Forces.

Although you may not need this money for many years, you have an important choice to make about your earned pension.

You choose between:

A deferred pension

Leave your earned pension in the Regular Force Pension Plan and start taking it at a future date (unreduced at age 60, or as early as age 50 with a reduction).

AND

A transfer value

Transfer the value of your earned pension out of the pension plan as a lump sum. The amount of money you transfer is called your "transfer value". You can choose to transfer the lump-sum – to the maximum allowed by the Income Tax Act – to:

a locked-in retirement plan, such as a locked-in registered retirement savings plan or a locked-in retirement account;
an insurance company, to purchase a pension; or
to your new employer’s registered pension plan, if that plan accepts transfers.

Consider carefully when making your decision.


 

Navigate

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I was talking with a few guys at work discussing about how they actually calculate our pension. I was wondering is it on 5 years of your best ''base'' salary or do they take into account specialist pay or anything else ?
Thanks guys for some reason doing research on this in the CF website is very difficult.
 
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aesop081

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I was wondering is it on 5 years of your best ''base'' salary or do they take into account specialist pay or anything else ?

It's pretty damned simple.

If you are in specialist 1 or 2 trade group, "specialist pay" IS your "base pay". "Spec pay" is not an add -on to regular pay. So, therefore, you pension is based on your pay.

Other allowances, like Aircrew allowance, sea duty allowance, LDA, etc... do not factor into pension calculations.
 

Navigate

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Is there actually a cfao or any regulation that states how they actually calculate your pension ? I just want something that I can show them what is your income that they actually take when its time to calculate your pension.
 
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aesop081

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Navigate said:
Is there actually a cfao or any regulation that states how they actually calculate your pension ? I just want something that I can show them what is your income that they actually take when its time to calculate your pension.


http://www.cmp-cpm.forces.gc.ca/dgcb-dgras/ps/pen/index-eng.asp
 

Navigate

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I've looked into that website but I can't find anything on it for some reason. Unless I'm blind ;)
 
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aesop081

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I've looked into that website but I can't find anything on it for some reason. Unless I'm blind ;)

Well, i'm not ging to calculate your pension for you.  ;D

2% per year, based on the average of your best 5 years (pay only, not allowances).
 

Navigate

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Yeah well its just to find the actual document that shows whats the amount that they actually take for your annual salary.
 
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aesop081

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Yeah well its just to find the actual document that shows whats the amount that they actually take for your annual salary.

http://lois-laws.justice.gc.ca/eng/acts/C-17/index.html

Have fun. Google still works.
 

Navigate

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Yeah I've search there too but I just can't find the actual formula that they use and what they actually take as the amount for calculating the pension.
 

mariomike

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Navigate said:
Yeah I've search there too but I just can't find the actual formula that they use and what they actually take as the amount for calculating the pension.

"Annuities: How Computed":
http://lois-laws.justice.gc.ca/eng/acts/C-17/page-7.html#h-12
 
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aesop081

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Yeah I've search there too but I just can't find the actual formula that they use and what they actually take as the amount for calculating the pension.

mariomike said:
"Annuities: How Computed":
http://lois-laws.justice.gc.ca/eng/acts/C-17/page-7.html#h-12

multiplied by

(ii) the average annual pay received by the contributor during any five-year period of pensionable service selected by or on behalf of the contributor, or during any period so selected consisting of consecutive periods of pensionable service totalling five years, or
 

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Yeah I understand that its an average of you five best years. Just not sure what they actually deduct from your pay to calculate it, like td, pld etc Which is can't seem to find anywhere.
 
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aesop081

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Just not sure what they actually deduct from your pay to calculate it, like td, pld etc

TD and PLD, along with other allowances ARE NOT PAY.

Pension is based on PAY as per the references already provided to you.
 

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Ok, thanks all, so they pretty much take the amount in the pay scale for the past five years and make an average of it to calculate your pension.
The argument we had was more about the specialist pay not being counted into your pension, but I now understand that its not an allowance and an actual pay in your pay scale. Thanks all.
 
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