Reserve Pension- Merged

[Rifleman62]

I am still waiting for an answer to the regulation which affects all members of the RFPP.

http://laws-lois.justice.gc.ca/eng/regulations/SOR-2007-32/page-5.html#docCont

Instalments
•  18. (1) The instalments shall be payable in equal amounts that may not be less than $5.00, except the last one, and be calculated using the mortality rates set out in the Complete life table, Canada, 1995-97, published by Statistics Canada, and interest at four per cent compounded annually.

The mortality charge is based on age, M/F, length of repayment, amount. My case is 1.5%. CF Pension Services receives the rate from Office Of The Superintendent Of Financial Institutions (OSFI). CF Pension Services then take the % and plug it into a calculator to come up with the rate to charge on arrears. I say that the calculator is programmed incorrectly.

It is supposed to be a mortality surcharge and interest at 4% compounded annually as per the regulations quoted above. What they are doing is the compounding the surcharge and adding it to the 4% compound interest on superannuation arrears. Thus in my case over 5.5% compound interest on arrears.

I requested the Manager of the Comptrollers Section to verify with the OSFI the rate. He said he would ask for a manual rate.

Once this is settled, I will provide what you should be asking for to verify your pension is calculated correctly.

The errors CF Pension Services made on my calculations are numerous, let alone losing $54,000 since Dec 07, not actioning an Election in Apr 07, miscalculating my RFPP using incorrect data continuously.......

The Director has refused to answer two of the three letters sent directly to him via email. The first reply was a whine about "human error".

 

[Gunner]

Looking at Rifleman62's predicament (and hearing other horror stories) I'm glad that I decided to stick with my RRSP. No way I could pay well over $100K to buy back

So did you not buy back your previous service prior to 2007 or you just did not use your RRSP to buy it back in a lump sum?

 

[Gunner]

If you look at my post from November 2009, you'll see my experience.  I elected to buy back even though I was leaving the military and did not have enough service to collect a pension.  I recently received my decision letter related to my pension.  I choose to keep the funds in the pension vs having them transferred to a LIRA. This is a personal decision based on a number of factors but I should be able to start collecting it in about 15 years when I am 60.

I chose to buy back and hopefully everyone did when they had an option to do so. Yes it may have been a lot of money if you had not been investing and using retirement vehicles such as the RRSP over your career with the reserves.  Why am I happy with the buy back?  The value of my pension is equivalent to ~$500K - so my buy back resulted in almost 4:1 matching investment to what I put in. 

It is unlikely I could have made that rate of return myself and it provides a key source of revenue and stability for me when I do decide to retire 20 years from now.

Gunner

Edited to add: I can't believe that post is over four years ago....

 

[Stoker]

I wonder how many didn't buy back, I personally know of a lot.

 

[Brasidas]

I wonder how many didn't buy back, I personally know of a lot.

Given how screwed up it is, I'm glad I'm one of them.

 

[Stoker]

Given how screwed up it is, I'm glad I'm one of them.

Yes but it must of saved the government millions if people didn't elect. The whole process was so convoluted that people simply gave up. I was incredibility lucky that all my Class A records were still at my reserve unit and all my my Class B and Class C time was continuous and made for an easy calculation and buyback.

 

[Rifleman62]

The Public Service will continue to spend like mad dogs regardless as to how many are enrolled.

The Public Service staff of the Reserve Force Pension Plan (RFPP) is paid, as are all administrative costs, by the pension plan itself. In 2009-10 it was $5.3 million to administer $95 million in pension receipts. In 2012/13 that administrative cost was $8.9 Million. The ratio to RFPP administration costs to pension receipts is very high when compared with the other three federal superannuation accounts.

Report of the Standing Committee on Public Accounts, Apr 12:

Some Committee members expressed concern over the cost of administering the Pension Plan, noting that in 2009-2010, $5.3 million was spent on the administration of $95 million in pension receipts. By comparison, the RCMP pension plan had $8.5 million in administrative expenses on pension receipts totaling $13 billion. When asked why the ratio of expenses to contributions varied so much between the two pension plans, Kevin Lindsey, Chief Financial Officer at DND, told the Committee that while he couldn’t comment on the RCMP data:

"I would say that the administrative expenses associated with the reserve force pension plan are in fact a function of the remedial efforts we're making to process this backlog. And when the plan reaches a steady state, when the records are automated, when the reservists are fully into the kind of pension system the RCMP are now—which we're targeting, I believe, to happen by 2015—then you will see this ratio change significantly."

BUT, now CF Pension Services is amalgamating or whatever with PWGS for pensions resulting in endless meetings and additional costs, so by 2015—then you will see this ratio change significantly is a pipe dream.

Surely from the coming into effect date of March 2007, to now, 2014, seven years, all the kinks have been worked through.

Noooooooo. They are still so f**ked up as my continued experience proves.

 

[Stoker]

Question for anyone in the know. I just received new T4's from 2007-2012 and instructions to submit them to CRA with a T1-ADJ form. I recently did my buy back, is this normal and possibly connected with my buyback?

Thanks

 

[dapaterson]

Question for anyone in the know. I just received new T4's from 2007-2012 and instructions to submit them to CRA with a T1-ADJ form. I recently did my buy back, is this normal and possibly connected with my buyback?

Thanks

I would contact your pay office to submit a request to the Mil Pay office in Ottawa to ask for more information.

What is the difference between the old and new T4s?

 

[Cronicbny]

Question for anyone in the know. I just received new T4's from 2007-2012 and instructions to submit them to CRA with a T1-ADJ form. I recently did my buy back, is this normal and possibly connected with my buyback?

Thanks

I wont claim to be in the know, but all of your buyback should be treated like contributions to a RPP and would therefore be tax deductible now wouldnt they? Thus your new T4s should show RPP contributions that, at least from my laymans perspective, means you would have overpayed income taxes (unless you contributed to and transferred all from an RRSP). After all, your buyback amount will also reduce your available RRSP contribution thresholds too

 

[DAA]

Question for anyone in the know. I just received new T4's from 2007-2012 and instructions to submit them to CRA with a T1-ADJ form. I recently did my buy back, is this normal and possibly connected with my buyback?

Thanks

Sounds like you bought back and paid "lump sum".  Correct?

 

[Stoker]

Sounds like you bought back and paid "lump sum".  Correct?

Thanks for the replies, I did a RRSP transfer. I checked some of differences and for a couple it was a lower line 40 amount and several RPP contributions were lower. Looks like this is linked to my buyback though. Taxes are still the same which is good, so I don't think i'll owe them anything. This was pretty unexpected though, have to call CRA and see if I can send in all the T4's on one form. They also included a copy of someone else's new T4's too :

 

[dapaterson]

Line 40 is "employer-provided taxable allowances or benefits not shown elsewhere on the T4 slip. This amount is already included in box 14. It is not added again to your total income."  That's not related to your pension buyback.

 

[DAA]

Thanks for the replies, I did a RRSP transfer. I checked some of differences and for a couple it was a lower line 40 amount and several RPP contributions were lower. Looks like this is linked to my buyback though. Taxes are still the same which is good, so I don't think i'll owe them anything. This was pretty unexpected though, have to call CRA and see if I can send in all the T4's on one form. They also included a copy of someone else's new T4's too :

So if you did buyback via "lump sum/RRSP Transfer", then they would have to issue new T4's for the affected years.  But by using the RRSP Transfer method, there should be little if any impact with regards to tax issues.  So it is just a matter of submitting the adjustments and they may very well want individual forms but you can always ask if you can do it on one.

Had you not gone the RRSP Transfer route, you may very well have found yourself with a really BIG tax bill.......

 

[dapaterson]

Except the buyback is for years prior to 2007 (and the first two months of '07 only). As of 01 March 2007, the regulations were in place that permitted certain Reservists to participate in the CFSA Part I, and created CFSA part I.1.

Thus changes to the T4s for 07-12 are likely not related to the buyback.


Taxes should not change, as that line merely shows how much was withheld at source.  If your income has gone up through the addition of taxable benefits you could end up owing money; if your income has been reduced you may receive a refund.

 

[Stoker]

Great guys, thanks for the info hopefully I won't owe. I'd imagine they'll let me know soon enough.

 

[DAA]

Great guys, thanks for the info hopefully I won't owe. I'd imagine they'll let me know soon enough.

Buyback via RRSP Transfer should equal an "offset", so you should be good to go.  CRA just needs to adjust your account accordingly.

Good luck!

 

[Lightguns]

Interesting thing the clerks told me to today.  If you retire from the PRes with a pension and you apply to be transferred to the SupRes you will wait a full year for your first pension cheque.  Has something to do with the SupRes processing timeline. 

 

[dapaterson]

No, has to do with the pension regulations. Entitlement starts the date of release from the CAF or one year after you were last paid, if you are a Reservist. A transfer to the Sup Res is not a release, therefore the one year rule applies.

 

[Lightguns]

Roger that, it now explains why a mate spent a year going around in circles waiting for a pension cheque.  He wishes someone had mentioned this when he signed on to the SupRes!