Author Topic: Canadian Forces Superannuation -Reduction of CPP bridge benefit at Age 65  (Read 36952 times)

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Offline MCG

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Re: Canadian Forces Superannuation Benefits-Reduction at Age 65
« Reply #25 on: April 09, 2015, 11:17:53 »
Don't let facts interfere with a good sense of entitlement.

Offline George Wallace

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Re: Canadian Forces Superannuation Benefits-Reduction at Age 65
« Reply #26 on: April 09, 2015, 11:32:09 »
Wow!



The bigger "WOW!" is who have been initiating these petitions.  In 2005 it was a CPO1, then in 2008 a retired Sergeant Major, and now a Warrant Officer.   You would expect these guys to know better.
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Offline Eland2

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Re: Canadian Forces Superannuation Benefits-Reduction at Age 65
« Reply #27 on: April 09, 2015, 11:42:05 »
What many people don't realize is that this is a form of what's called 'CPP integration'. That is, your retirement benefits are reduced by the amount of your monthly CPP cheque. So instead of getting your CFSA payment in full, with your CPP cheque on top of that, you get a portion of your CFSA cheque topped up by CPP. I'm currently a federal civil servant, and when I retire at 60, but start collecting CPP at age 65, the same thing will happen to me.

It's really just a way to make your pension last longer and keep the CFSA/CPP pension plans solvent. It's all money coming out of the same pot of general government revenues, anyway.

Offline MCG

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Re: Canadian Forces Superannuation Benefits-Reduction at Age 65
« Reply #28 on: April 09, 2015, 12:32:37 »
So instead of getting your CFSA payment in full, with your CPP cheque on top of that, you get a portion of your CFSA cheque topped up by CPP.
It is the other way around.  You get your full CFSA payment with CPP cheque. Prior to that, you get your full CFSA payment with bridge payment.  Retirement benefits are not reduced; they are topped-up until CPP kicks-in.

Offline Jed

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Re: Canadian Forces Superannuation Benefits-Reduction at Age 65
« Reply #29 on: April 09, 2015, 12:41:55 »
It is the other way around.  You get your full CFSA payment with CPP cheque. Prior to that, you get your full CFSA payment with bridge payment.  Retirement benefits are not reduced; they are topped-up until CPP kicks-in.

So for someone who put 15 years into the work force as a provincial govt employee than 18 years as a Reg soldier. Than goes as a Res soldier for 2 yrs and civi self employed and back to paying into CPP,  how does that work?

I am not to up on this but when I hit 65, and they reduce my 'top up' half my CPP input as a civi does not get accounted for.
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Re: Canadian Forces Superannuation Benefits-Reduction at Age 65
« Reply #30 on: April 09, 2015, 14:09:21 »
So for someone who put 15 years into the work force as a provincial govt employee than 18 years as a Reg soldier. Than goes as a Res soldier for 2 yrs and civi self employed and back to paying into CPP,  how does that work?

I am not to up on this but when I hit 65, and they reduce my 'top up' half my CPP input as a civi does not get accounted for.


See a retirement specialist.......from what I've witnessed it's well worth the money.
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Online mariomike

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Re: Canadian Forces Superannuation Benefits-Reduction at Age 65
« Reply #31 on: April 10, 2015, 07:26:00 »
Most people outside the CF/PS/RCMP would give up appendages to draw the same kind of retirement benefits we do.

Has there been any discussion about a Supplemental Plan?  S.P. includes a 2.33% accrual rate to bring retiring members a 70% pension in 30 years.
Also, there is a “best three years” earnings formula.

Ontario municipalities can negotiate agreements to provide Supplemental Plans for their Police Officers, Firefighters and Paramedics.   
« Last Edit: April 10, 2015, 07:38:57 by mariomike »
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Offline MCG

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Re: Canadian Forces Superannuation Benefits-Reduction at Age 65
« Reply #32 on: April 10, 2015, 08:01:50 »
It is a pension designed for the Canadian Forces.  Why would there be a supplement, which is designed to elevate a standard municipal pension to recognize the unique services of emergency responders?

Offline Brihard

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Re: Canadian Forces Superannuation Benefits-Reduction at Age 65
« Reply #33 on: April 10, 2015, 10:43:47 »
Every time I see 'CPP Clawback' I want to punch a kitten. And I love kittens. But ignorance abounds, and it puts the kittens at risk of bodily harm.

There. Is. No. Such. Goddamned. Thing. Our pension is INTEGRATED with CPP. Frankly, as a taxpayer, I'd be appalled were it not. The CAF/RCMP/PS have a great pension plan as is. The bridge payment replaced with CPP is NOT a 'clawback', nor is it some unjust deprivation, and I loathe the fiction that it is.
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Offline ProPatria05

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Re: Canadian Forces Superannuation Benefits-Reduction at Age 65
« Reply #34 on: June 17, 2015, 10:17:47 »
Makes me angry as well. Either they're too stupid to understand how it works, and that our monthly contributions are reflective of it, or they do understand it and are yet another attempt to milk the 'we are national treasures' bandwagon. Maddening either way, but perhaps moreso the latter. And there's no point trying to have a rational debate with them. I read a good quote the other day (paraphrasing):

"Debating with idiots is like playing chess with a pigeon. Even though it's losing it will knock all the pieces over, crap on the board, and strut around as if it won."

Offline George Wallace

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Re: Canadian Forces Superannuation Benefits-Reduction at Age 65
« Reply #35 on: September 20, 2015, 09:13:57 »
This link may help to explain the situation a little better than the Bridge Benefits FAQ on the Government pages.  Please take note to the reference to the CPP being lowered if a CF retiree does not work for a period prior to reaching age 65, and does not contribute to CPP.  It explains that it is the CPP being lowered, not a CLAWBACK to the CF pension.

http://thepinnaclesrealm.blogspot.ca/2012/02/why-canadian-government-does-pension.html

Quote
THE CANADIAN GOVERNMENT EXPLAINS THE PENSION CLAW BACK

Here is the story on Bill C-201. Where the CF is referred to, please assume a reference to the RCMP. Any reference to the Canadian Forces Superannuation (CFSA) should also be taken as a reference to the RCMP Superannuation (RCMPSA).

In 1966, members of the CF were paying 6% of their salary into the CFSA. When the Canada Pension Plan (CPP) was integrated with the CFSA (as were all other public service pension plans), CF members continued to pay 6% of their salary into pension benefits. The only change was that 1.8% now went to CPP and 4.2% went to CFSA. Upon retirement, the member receives 2% of his/her best five-year average salary per year or partial year of service.

Members of the CF typically retire well before age 65. When they collect their CFSA upon retirement, it consists of two parts. The larger part (approximately 70%) is the “lifetime benefit” and that amount will continue until the member dies. The smaller part (approximately 30%) is termed the “bridge benefit” and serves to “bridge” the pensioner’s income at the full 2% until age 65, when most people start collecting CPP. Both parts are indexed when the retiree reaches the combination of age and years of service equaling 85, but not before age 55. At the combined 85 and age 55 point, all back-indexing to retirement date is added to the pension benefit and annual indexing commences.

In most cases, the amount of CPP that commences will be at least equal to the amount of the bridge benefit that ceases, thus giving the pensioner a consistent income flow throughout retirement years. This will not be the case under two circumstances.

If the member does not earn taxable income from CF retirement age to age 65, he/she will not have contributed to CPP for that period. Therefore, the amount of CPP eligibility will be less and will likely be less than the bridge benefit, which ceases at age 65. In most cases, working or not is a decision the member makes.

Canadians can draw CPP as early as age 60, with a reduction of 0.5% per month before age 65. Total reduction at age 60 would, therefore, be 30%. That is the amount (plus indexing) that the pensioner will receive for the rest of his/her life. A CF pensioner taking CPP at age 60 will, in effect, be double-dipping the bridge benefit and CPP for five years. This is a good thing, but he/she must be prepared for a reduction in overall benefit when the bridge benefit ceases at age 65. At that point, the remaining integrated CFSA (lifetime benefit) and (reduced) CPP pension benefit will likely be less than the combination of lifetime benefit and bridge benefit. The total pension benefit continues to be indexed. The decision to take CPP early rests with the member.

The CFSA and CPP are working exactly as set up and paid for and do provide for a consistent, indexed level of retirement income for CF members.

The essence of the argument in Bill C-201 is that CF (and RCMP) pensioners should be able to collect both the bridge benefit and CPP beyond age 65. This would amount to “stacking” the CFSA (lifetime and bridge benefits) and CPP, amounting to an approximately 30% increase, even though they haven’t paid for a stacked pension plan. It’s as simple as that.

The cost to implement Bill C-201 would be enormous, with one-time costs (for the CF) being approximately $7 billion and annual costs being approximately $110 million and increasing, according to the Office of the Superintendent of Financial Institutions. Proponents of Bill C-201 suggest that the annual cost of implementation could be covered by diverting CF members’ EI contributions. Annual EI contributions by CF members total only $54 million and would cover less than half the annual cost. In addition, approximately 3,000 CF members use EI benefits every year for maternity leave and parental leave; and those important benefits would be denied. Implementing Bill C-201 would mean an additional contribution amount for each CF member of approximately 2%. For a soldier making $50,000, that would mean $1,000 less take-home pay. Most CF members are above that salary level.

Our government has acted. With the Budget Implementation Act, 2006, the Government approved an amendment to the Canadian Forces, Public Service, and Royal Canadian Mounted Police pension arrangements. In the case of pension arrangements provided under Part I of the CFSA, this amendment, which will operate in the plan member’s favour, alters the formula used to calculate the pension adjustment for those reaching age 65 in 2008 and beyond. This changes the calculation of the lifetime benefit in that the adjustment factor will be lowered from .7 percent to .625 percent, resulting in an increase in the lifetime pension benefit. Therefore, the dollar amount reduced at age 65 will be less, resulting in increased long-term pension benefit.

The very well organized advocates of Bill C-201 propose a number of what are essentially red herrings.

They point to the lack of consultation and input by CF members in 1966. CF members were not consulted, nor were members of other public pension plans that became integrated at the same time. The CF is not a union and doesn’t get to vote on pay and benefits. The leadership of the CF makes such decisions on behalf of the organization and that will always be the case. Communication of this change was sporadic, at best, but the overall integrated pension benefit remained the same.

They suggest that MPs have exempted themselves from what they call a “clawback” of the bridge benefit. MPs have no input into their pay and benefits package. MPs come and go at all ages and do not collect their pensions until age 55. Like all other public service pension plans, an MP pension is a fixed amount based on years of service and salary (defined benefit) and is indexed in the same way as other pensions. MPs do not collect any bridge benefit from or to any age; therefore, there is nothing to “claw back”. Stirring up resentment against public figures is always easy, but it is intentionally misleading in this case.

They point to petitions signed by 100,000 people in support of Bill C-201. It would be normal for anyone to sign a petition that holds an implied promise of more money. Many former senior officers have signed the petition, even though conversation with many of them reveals that they know it cannot go anywhere. There are a great many more who have not signed. These include many former Chiefs of the Defence Staff and leaders who are acknowledged as being strong supporters of the troops. They know that is simply not a legitimate issue.

Many retired members have responded angrily when Government members have not supported the bill. They send in copies of their CFSA statements that show that, at age 65, their CFSA will be reduced by $xxx per month and that they will lose indexing on that amount. What they don’t include is their CPP statement that says they will receive $xxx per month and that it will be indexed.

They propose emotional arguments about how members of the CF have served and sacrificed – themselves and their families. That is true and we all respect and are grateful for that. Canadians serve voluntarily. They are well paid, well treated, and get excellent trades training and experience for future employment. Retirement benefits are generous by any contemporary standard.

The CF / RCMP pension plans are set up exactly the same way as all other public service pension plans, and most other defined benefit pension plans; e.g. teachers plans. Where would the dominos stop and at what cost, if this bill were to be implemented? Given that Bill C-201 would require a Royal Recommendation, it has no chance of being implemented in any event.

The bottom line is that CF pensioners are getting 100% of what they have paid for and that the integrated CFSA / CPP pension is working exactly as it was set up.

Our Government has taken many steps to improve the quality of life of our veterans and their families. There will always be more that we would like to do. There are issues that are worthy of further action and government is pursuing many of those. We will never break faith with those who have given so much to Canada.

Posted 22nd February 2012 by Rick Thomson
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Offline Greymatters

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Re: Canadian Forces Superannuation Benefits-Reduction at Age 65
« Reply #36 on: October 28, 2015, 13:34:49 »
Thanks for the posting George, that explains things very well.

Offline Brihard

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As an interesting note, under the recently passed Pension Reform Act, as of 2016, Parliamentary pensions will be CPP integrated as well.
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Offline AirDet

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Re: Canadian Forces Superannuation Benefits-Reduction at Age 65
« Reply #38 on: January 06, 2016, 08:57:09 »
See a retirement specialist.......from what I've witnessed it's well worth the money.

There's the best advice I've seen on this thread! Talk to an SME. Sounds familiar doesn't it, guys?
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