Topic: Retro Pay & Allow 1Apr 2014 - 1Apr 2017

[CountDC]

My math must be off.  I calculated half that amount.

I think your math is right as it corresponds to my original estimate but then I second-guessed it and screwed it up. sigh.

[BinRat55]

You can figure this out the same way as compound interest, but roughly for the years of increase you multiply it by;

First year - monthly pay x 1.25 = difference in monthly pay for year
Second year - monthly pay x 2.52
Third year - monthly pay x 3.8
Fourth year - monthly pay x 5.09
Fifth year - monthly pay x 6.41
...
Warning!  Math ahead!

new rate = current rate *(1+annual increase)^number of years gives you overall percent
example in year two = current rate * (1 + 0.0125) ^2
                              =current rate *1.0252 = new total monthly rate

pretty decent explanation here; https://www.mathsisfun.com/money/compound-interest.html

 

Compound interest is crazy that way; an annual 1.25% increase gives you a 13% growth over 10 years.  Or do 1.5% a month (18% year) for credit card interest and you can see how fast your debt grows.

What on earth ... where are you getting these percentages? I'm by far the greatest at math (3 x 6 = blue) but I read your mathplay link and I see it differently - as in exactly what the link says... a 1.25% raise at year one is still a 1.25% raise at year 4... you just add the 1.25 from year 1 to the base of year 2, and then again for year 3 and so on...

[PuckChaser]

Besides barely keeping up with inflation, this raise also didn't keep up with the PSAC bargaining unit that we usually benchmark against.  The Services bargaining unit contains most of the comparative civilian trades.  They received the 1.25% a year, but also got additional raises.  For example VHEs got an additional 9% market adjustment, making it that much harder to keep military Veh Techs.

You're barking up the wrong tree. CAF pay is an average of all those "direct comparisons", so just because one got 9% doesn't mean everyone will get it. If you believe there's a large enough gap between military and PS VHEs, then someone in the RCEME should be doing up the paperwork to justify a pay review and ask for Spec 1. Having everyone go to that 9% adjustment would disproportionately give a bigger raise to military pers compared to their civilian counterparts, and that would never happen.

[SupersonicMax]

What on earth ... where are you getting these percentages? I'm by far the greatest at math (3 x 6 = blue) but I read your mathplay link and I see it differently - as in exactly what the link says... a 1.25% raise at year one is still a 1.25% raise at year 4... you just add the 1.25 from year 1 to the base of year 2, and then again for year 3 and so on...

1x1.0125x1.0125x1.0125x1.0125x1.0125x1.0125x1.0125x1.0125x1.0125x1.0125

If you start with 1$,
After a year, you have 1.0125$ (1$ + 0.0125x1$)
After 2 years, you have 1.02516$ (1.0125 + 0.0125x1.0125)
After 3 years, you have 1.03797$ (1.02516 + 0.0125x1.02516)
And so on...

After 10 years, you'd get 1.1323$ or a growth of 13.23% (rather than 12.5% if you were to purely add up 1.25% 10 times over)

[BinRat55]

Ok I know this is difficult for me I promise this will be my last post on the topic as I just don't seem to be getting it... I want to figure out where I am going wrong on this math (it's not about how much I will see anymore it's about trying to understand this!!)

Here is what I am doing is as plain speak as I can...

If, in 2014 I was making 6200 a month, a 1.25% raise would add approx. 77.50 on to what I should have been making. So - 77.50 X 12 months in 2014 = 930.00. I am owed 930.00 for 2014.
In 2015, my pay would have been 6277.50 a month. A 1.25% raise would add approx. 78.50 on to what I should have been making. 78.50 X 12 months in 2015 = 942.00. I am owed 942.00 for 2015.
In 2016, my pay would have been 6356.00 a month. A 1.25% raise would add approx. 79.50 on to what I should have been making. 79.50 X 12 months in 2016 = 954.00. I am owed 954.00 for 2016.

930 + 942 + 954 = 2826.00 (gross)

Another way I see it:

2014    Should be making -- 6277.00 a month X 12 = 75324.00
            Was making        --  6200.00 a month X 12 = 74400.00
                                                                          ----------------
                                                                                924.00

2015    Should be making -- 6356.00 a month X 12 = 76272.00
            Was making        --  6277.00 a month X 12 = 75324.00
                                                                          ----------------
                                                                                948.00

2016    Should be making -- 6435.00 a month X 12 = 77220.00
            Was making        --  6356.00 a month X 12 = 76272.00
                                                                          ----------------
                                                                                948.00

Now, for those of you who are going to tell me that my "was making" should stay at 6200.00 a month through all years - that logic is flawed as the payout for the year previous is already factored in, ergo once the first years payout has been rectified (924.00) the second year you are considered to have been sitting at the right base amount and so on...

What am I not seeing?

[PuckChaser]

You missed the 1.2% military factor increase in FY16/17 which would give you another 6356*1.012=6614.43 which is $78.43 a month back pay = $941.18 for the year. You also have May/June pays (another 1.25%) which were $6200 instead of $6697.11, which is 2 months of backpay totalling $994.22.

Keep in mind I'm a SigOp not a MathOp so I stand to be corrected, but I see the rest of your numbers correct. Your backpay total for this example would be $4761.40

[captloadie]

Binrat,
The flaw in your logic is you are not accumulating your retro back pay. So, you calculation for 2014 is correct. For 2015, you are only calculating the additional increase to the new base pay. But you weren't paid the new base pay in 2015. You were paid the old rate of 6200. The increases are cumulative, and you aren't calculating them that way because of the way you are doing the math.

Look at it this way for the first 1.25% raise, they owe it to you for all 4 years. For the next 1.25%, they owe it to you for 3 years. For the next 1.25%, they owe it to you for 2 years. For the next 1.25%, plus the 1.2% mill factor, they owe it to you for 1 year. Then they owe you the new rate for an additional 3 months. The final percentage is a little off because of the effects of compound interest, but the spreadsheet posted earlier accounts for that.

[Lumber]

Does anyone have the previous pay scales? They seem to have replaced the "2013" pay scales on the website with the 2017 pay scales, but the link still says that they are the 2013 ones.

I'm trying to figure out what IPC I'm at, but since my pay office is an hour away, I'm trying to just compare what my current pay statement says against the old pay scale. I believe I'm IPC 5, but want to make sure.

[dapaterson]

Legacy rates are available at: http://www.forces.gc.ca/en/caf-community-pay/pay-rates.page

[Lumber]

Legacy rates are available at: http://www.forces.gc.ca/en/caf-community-pay/pay-rates.page

Tried those. They have the  "After March 2012" rates, but not the "After March 2013" rates.

Anyway, I just realized I could multiply my current pay on my pay statement by 1.0634 and it gives me the new pay, then I compare to current pay scale, and voila, IPC 5.

Cheers

[Messerschmitt]

Do these increases apply to PLD as well?

What are the yearly increases for that? Says allowances 5%, but there is no breakdown.

[BobSlob]

Do these increases apply to PLD as well?

What are the yearly increases for that? Says allowances 5%, but there is no breakdown.

PLD hasn't been discussed yet. Allowances other than the ones mentioned are just a straight 5% across the board.

[Messerschmitt]

PLD hasn't been discussed yet. Allowances other than the ones mentioned are just a straight 5% across the board.

5% across the board starting April 2014 (so backpay expected) or 30 June 2017?

[trooper142]

Does anyone have the previous pay scales? They seem to have replaced the "2013" pay scales on the website with the 2017 pay scales, but the link still says that they are the 2013 ones.

I'm trying to figure out what IPC I'm at, but since my pay office is an hour away, I'm trying to just compare what my current pay statement says against the old pay scale. I believe I'm IPC 5, but want to make sure.

Where are you seeing 2017 Rates? I clicked on the 2013 pay rates and they are still looking like the 2013 rates!

[PuckChaser]

PLD hasn't been discussed yet. Allowances other than the ones mentioned are just a straight 5% across the board.

PLD wasn't touched, its only for allowances in CBI 205. There's a table here at the bottom covering all the allowance increases: http://www.forces.gc.ca/en/caf-community-benefits/know-your-benefits-articles/pay-raise.page


Messerschmitt: I believe its 5.1% compounded, which is the 1.25% increase applied without the military factor that the base pay scale got. Backpay is "supposed" to be 30 Jun 17 pay, but I wouldn't hold your breath.

We'll get to start another thread soon when the public service unions start bargaining again for the CBA that'll start FY18-22. This is just a result of them dragging their feet with the previous government and trying to get a better deal with the Liberals.

[Messerschmitt]

Where are you seeing 2017 Rates? I clicked on the 2013 pay rates and they are still looking like the 2013 rates!

It shows 2017. Your browser cache is still probably old. Press Ctrl+F5.

Hopefully they will release the PDF for 2013 rates like they do with 2012. Currently they just updated the web page directly with the new numbers.

[trooper142]

It shows 2017. Your browser cache is still probably old. Press Ctrl+F5.

Hopefully they will release the PDF for 2013 rates like they do with 2012. Currently they just updated the web page directly with the new numbers.

Tried Ctrl F5 and no luck!

Anyway someone can post a picture of the new rates!?

[Messerschmitt]

Here it is

[kev994]

When I check the GSO scale is 2013 but Pilot and a couple others are 2017

[dapaterson]

Read carefully.  Col and above are 2013 payrates, as their pay is benchmarked against different groups.  LCol and below are 2017.

It's all in the notes, if you look carefully.

[Eye In The Sky]

Tried Ctrl F5 and no luck!

Anyway someone can post a picture of the new rates!?

NCM rates for 2017 don't appear to be completed yet.  Stand by to stand by!

[SJBeaton]

NCM rates for 2017 don't appear to be completed yet.  Stand by to stand by!

It looks as though Table to CBI 204.30 has all updated rates for NCMs: http://www.forces.gc.ca/en/about-policies-standards-benefits/ch-204-pay-policy-officers-ncms.page 

[Eye In The Sky]

Copy that.  I was only looking here 

http://www.forces.gc.ca/en/caf-community-pay/pay-rates.page

[Navy_Pete]

What on earth ... where are you getting these percentages? I'm by far the greatest at math (3 x 6 = blue) but I read your mathplay link and I see it differently - as in exactly what the link says... a 1.25% raise at year one is still a 1.25% raise at year 4... you just add the 1.25 from year 1 to the base of year 2, and then again for year 3 and so on...

Not really, they compound each year.  It's not very dramatic because the rate is pretty low.  But it will result in a noticeable difference against your monthly rates if you don't compound the raise each year, and why the total raise is slightly higher than just straight adding 1.25 each year.

So initially, you are at your standard rate of 1

each year you multiple by 1.0125 to give you your raise (1+ 1.25%= 1+0.0125). This gives you your overall new pay rate.  (if you just want to see how much your new pay rate increase is going to be, you can just multiply by 0.0125 a year, which is 1.25% as a whole number)

so your first raise is
1.00 * 1.0125 = 1.0125 (*base pay)
second year you multiply the raise (1.0125) times the rate from the previous year, not the original
1.0125 * 1.0125= 1.0252
1.0252 * 1.0125 =1.038
...
etc
you do the same each year, and after 4 annual 1.25% increases, are at a 6.41% raise instead of 6%.

If you go to the link, they explain the compound interest formula.  Basically every time it compounds, you are starting with a slightly larger bit than you had last time.

future value = present value  x (1+interest rate) ^ number of periods

you can plug in the numbers, but the interest rate is 1.25% = 0.0125, and there are 5 periods (counting from 2013 to 2017).

It's only a small difference, but only because of how small the annual increase is.  If you have larger increases, or more regular increases, that's how you get into trouble with compound interest rates, and why your balance will quickly build up on a credit card if you don't at least pay the minimum each month.

A more extreme case is when something doubles each time (for example cells that split).  You start with 1, then 2, then 4, 8, 16, 32, etc.

That's the same as a 100% compounding interest rate (ie 1), or working it into the formula;

fv = present value x (1 + 1)^number of periods

So if you start with 1, and go through 4 cell divisions (ie 4 periods) the math is

FV= 1 x 2^4 = 16

It's nice to have compounding interest work for us for a change with a raise, instead of against debt.

[Navy_Pete]

Another comparison is if you invest $1000 and it grows 5% a year;

initial = $1000
first year = $1000 + (1000*.05) = $1050
second year = $1050 + (1050*.05) = $1050 + 52.5 = $1102.50
third year = 1102.50 + (1102.50*.05) = 1102.5+ 55.125 = $1157.67

etc

If you just add 5% each year, in the third year you would be at $1150 instead of 1157.67.  Again, small difference but it's a short time.  Over twenty years it will be a bigger difference, and adds up to a lot if you invest more money over time.

Not sure if that's clearer, but that's how compound interest works, and where the 6.41% raise increase comes from, instead of 6%

(as an aside, with an annual inflation of around 1.53%, the total there is almost an 8% overall inflation in the same time)