Future Pension Outlooks

[Hansol]

Hey All, I'm new to this board. Just finished my Armed forces application thingy-dooder (going 031) and am thinking of making it a career. And from what I hear, staying in our army for more than 3 years is quite the weird occurance. But what I want to know is what the outlook is on a pension? Is it going to be a rediculous amount wherein i should find other employment sooner? Or would there actually be a point in serving 20+ years in our armed forces...

Cheers, Cameron

 

[Inch]

First, what do you consider ridiculous? Your pension is what you make it, it's 2% per year of the average of your 5 highest paid years. Under the new terms of service that come into effect in Jan 05, it'll take 25yrs to be eligible for a pension.  Example, if you average $60,000 per year over your 5 highest paid years, then your 25 year pension would be $30,000.  It's going to be more if you progress past Cpl. What your pension will be depends on your career progression since you make more money the higher you get in rank.

Clear as mud?

Cheers

 

[Michael OLeary]

Try checking these sites for current pay rates and the current pension calculator:

Pay Rates and Allowances --  http://army.ca/forums/threads/16015.0.html

Canadian Forces Pension Estimate Calculator  --  http://www.forces.gc.ca/admfincs/dappp/pensionCalculator_e.asp?sel=cal

For example, a Sergeant retiring in 2005 after 25 years service (Terms of Service - IPS (Indefinite Period of Service) currently makes $4457 as a monthly salary (%53,500 annually). Putting this into the Pension Calculator shows that his approximate pension on retirement would be $26,296.

A Captain, currently making $6571 monthly ($78,800 annually) retiring after 25 years would receive a pension of about $34,606.

You can play with the variables and pay rates to see other possibilities.

So you tell us, based on this sort of calculation, is this a reasonable career choice?

(Note that there are some changes coming to the Superannuation Act that dictates our pensions, so an updated Calculator should appear some day.)

 

[Fishbone Jones]

Has anyone heard of or seen anything substantial and concrete (no rumours please) on the new Reserve pension package?

 

[NMPeters]

I heard about the Reserve pension plan very briefly at a meeting this weekend. These are the points that were in the slide presentation:

- Bill C-37 updated the CF Superannuation Act, and provided provisions to allow a Reserve Pension Plan

- Cost of the initiative to implement a modern pension service to meet the aims of C-37, including new software, was ~$30M

- Original roll-out date was projected to be Jan 05

- Upon review by Treasury Board, the project was limited to $15.8M to effect temporary upgrades, in light of the long-term plan to migrate CF pensions to under PWGSC

- Pension Modernisation Project, and its Reserve component, now projects completion by Dec 05, with â Å“stand-upâ ? of Reserve pensions possible soon after

 

[Fishbone Jones]

NM Peters,

Thx for that. So I guess it will be, typically, another year before we hear something substantial and relevant.

 

[George Wallace]

- Upon review by Treasury Board, the project was limited to $15.8M to effect temporary upgrades, in light of the long-term plan to migrate CF pensions to under PWGSC

Spider senses tingling!

GW

 

[Release Section]

I'm a newbie to this board.  I am a Release Section supervisor and very interested personally and professionally in the new TOS and pension modernization stuff.  The original quesiton was:  is the CF pension worth it?  That was well answered within the first few replies.  If that is why you are joining the CF bud, maybe you should keep looking.  We don't serve because of high pay and excellent retirement benefits.  I'm not saying that CF benefits are bad but you could do better downtown - if that is what your focus is.

The TOS programme is supposed to come online in Jan 05.  It was a bizarre decision to release the new TOS before introducing the pension modernization.  Currently, TOS and pension are intricately linked.  In the future they will not be.  Pension will be based on cumulative years of service.  DMCARM 7337 190919Z DEC 03 http://hr3.ottawa-hull.mil.ca/dgmc/docs/msg/2003/dmcarm7337_b.pdf gave COs a limited time ability to offer deserving NCMs on initial BEs or offrs on SEs further TOS - this would include IEs to the 20 YOS point or, for re-enrolled members, FPS to the 20 YOS point.  This is an opportunity for members to lock in to receiving an immediate unreduced annuity at the 20 YOS point as the pension modernization business will make immediate unreduced annuities available only after 25 YOS (not 24 yrs + 1 dy).  Pretty easy decision unless the member is fairly sure he only wants to serve to the end of the BE/SE and then release.  In this situation, don't accept the IE 20 because the IE starts as soon as you sign accepting it and, if you do subsequently decide to release you will be breaking a contract.  What this means is that you will be a 4(c) release vice a 4(b) End of Fixed Period of Service.  The difference between these two release items is $$.  4(b) pays severance pay (7 days pay for every completed year of service) and move benefits (return to place of enrolment).  4(c):  under ten YOS = no severance pay; and over ten YOS but less than 20 = 1/2 severance pay.  And there are no move benefits with a 4(c) release.  The other consideration for officers is the Gratuity - as soon as you sign IE you no longer qualify for gratuity.  I know the gratuity has been cancelled but there are still lots of officers on initial SEs who qualify for the gratuity.  My point is, if you are relatively confident that you have no intention of pulling the plug after your BE or SE - why not lock into the IE 20?

sorry to ramble on....I like this subject.

 

[Inch]

R.S., that's bang on and was laid out for me like that back in June. I was on a 9 year SSE that expired Jun 2008, however, following my pilot wings grad, I was put on restricted release until Apr 2011. So I was in a predicament that required me to sign a contract of some sort, either an SE to take me to Apr 2011 or an IE 20, I signed the IE 20.

Cheers

 

[Pte_Martin]

This probably isn't the right place to ask but i can't find the right topic. I have heard by a couple of people that they have changed the pensions. That now after doing your 20 or 25 years, you can't get you full pension until you turn 60. Is this true or am i just hearing crap that some of the reservists likes to spread around?

 

[Bruce Monkhouse]

http://forums.army.ca/forums/threads/22704.0.html

 

[geo]

Crap!

 

[GO!!!]

Funny related story:

The Infantry Career Mangler comes to my unit, gives his speech, and asks if there are any questions.

A younger Cpl puts up his hand and asks; "Is there any benefit to the member of the new TOS stipulating that we must now serve 25 years instead of 20?"

The response was classic, and only came after a wildly twitching moustache came to a rest; "Well, there were alot of factors....a great deal of planning.....we had to consider.....no, not really" 

 

[a_majoor]

The sad thing is I sent these clowns a memo back in 1999 outlining the benefits of going for a group RRSP (i.e. financial institutions would eat all the costs to get the business, flexibility for Regular and Reserve members, could be instituted very quickly and members control where the money is invested). The plan potentially could have been instituted that very year (the financial institutions would have been working night and day to close the deal if 1999 was chosen as the start date).

The answerfrom Ottawa  was to the effect of "we have added your input to our (round) database".

I'm not holding my breath for a 2007 start date for these pension modernizations either.

 

[sabot41]

Just thought I would drop a tidbit of info that was not explained to me when I "retired", normally a person gets because their time has come and/or they have other employment lined up. This new position would normally include company health and dental benefits..all fine and good. However in some cases, you move on as one tends to do in the civy world, either by choice of other reasons. This happened to me so I went back through my pension people to apply for PSHP (I kept dental coverage when I got out as it is a one time thing), I was shocked to find out I had a 3 month waiting period, so in fact my family had no health coverage for this extended period of time. Once I made it in to the window I have kept the PSHP and will never opt out again, besides not many civy jobs cover 100%, so having 2 health care plans always ensures I have complete coverage. So my recommendation would be to anyone getting out, take the dental and health coverage and keep it. The amount that comes off your monthly cheque will never be missed anyway