Glossary - Pension

Institutions starting with the letter A

Actuarial Evaluations ( Évaluation actuarielle)

A report prepared by an actuary to determine the accrued pension liabilities of a defined benefit pension plan

Actuary ( Actuaire)

An actuary prepares actuarial valuations for defined benefit pension plans.

Annual Allowance ( Allocation annuelle)

If you became a member of the public service pension plan on or before December 31, 2012:

An annual allowance is a benefit available to plan members who have more than two years of pensionable service, who retire before age 60 and are not entitled to an immediate annuity. This benefit is a reduced pension that takes into account the early payment of a retirement pension. It becomes payable at age 50 at the earliest.

If you became a member to the public service pension plan on or after January 1, 2013:

An annual allowance is a benefit available to plan members who have more than two years of pensionable service, who retire before age 65 and are not entitled to an immediate annuity. This benefit is a reduced pension that takes into account the early payment of a retirement pension. It becomes payable at age 55 at the earliest.

Average Salary for Pension Purposes ( Salaire moyen aux fins de la pension)

Salary of the five consecutive years of highest paid pensionable service in the public service. The average salary of those five years is then used to calculate pension benefits under the public service pension plan.

Average Maximum Pensionable Earnings (AMPE) ( Moyenne des maximums des gains ouvrant droit à pension (MMGP))

The calculation of a five-year average using:

• the Year’s Maximum Pensionable Earnings (YMPE) under the Canada Pension Plan / Quebec Pension Plan (CPP/QPP) for the year of your retirement from the public service or the year in which your CPP or QPP regular retirement pension commences, whichever is earlier and
• the Year’s Maximum Pensionable Earnings (YMPE) for the four preceding years.

Where the CPP/QPP reduction commenced prior to June 17, 1999, the AMPE is calculated over a three-year period.

Example: The AMPE for someone retiring in 2004 is $39,080.

This is the average of the YMPE for 2004, $40,500, and the YMPE for the four preceding years; that is $39,900 in 2003, $39,100 in 2002, $38,300 in 2001 and $37,600 in 2000.

$195,400 (total YMPE) ÷ 5 = $39,080 (AMPE)

Institutions starting with the letter B

Bridge Benefit ( Prestation de raccordement)

When you retire, you will receive both a lifetime pension and a bridge benefit. A bridge benefit is a temporary benefit, payable until age 65 (the bridge benefit stops if you become entitled to CPP/QPP disability benefits). Regardless of when you start your CPP/QPP pension, your bridge benefit payments will stop at age 65.

Buyback service

See Service Buyback ( Rachat de service)

Institutions starting with the letter C

Canada Pension Plan (CPP) ( Régime de pensions du Canada (RPC))

A mandatory earnings-related pension plan implemented January 1, 1966, to provide basic retirement income to Canadians between the ages of 18 and 70 who work in all the provinces and territories, except in the province of Quebec. Quebec operates its own pension plan similar to the CPP for persons who work in that province.

Child/Dependant ( Enfant/Personne à charge)

For purposes of the public service pension plan:

In the event of a plan member’s death, a child/dependant may be entitled to a children allowance under the public service pension plan. To be eligible for an allowance, a child must be under 18 years of age. Children between 18 and 25 may receive allowances if they are enrolled in school or another educational institution full-time and have attended continuously since the age of 18 or the date of the member’s death, whichever occurs later.

Compensation Web Applications (CWA) ( Applications Web de la rémunération (AWR))

CWA is a suite of self-service pay, pension and insurance applications enabling employees to monitor and manage their personal compensation information, as well as calculate pay, pension and insurance "what if" scenarios to assist with financial planning. CWA allows employees to view their Pension and Insurance Benefits Statement, their Statement of Earnings (Pay Stub), and request changes to their Voluntary Deductions. Employees can also use the Pension Benefits Calculator, the Service Buyback Estimator, the Retirement Package, the Pension Portability Package, the Service Buyback Package and the Public Service Health Care Plan (PSHCP) Web Application to help them make important pension and insurance related decisions.

Consumer Price Index ( Indice des prix à la consommation)

Measure of the average amount paid for a basket of goods and services purchased by Canadian consumers at a specific time. This index, when compared to the same index at a previous date, is used to determine the increase in the cost of living.

Contribution Rates ( Taux des cotisations)

When you join the public service pension plan, you and your employer start making regular contributions.

Employee contribution rates are set periodically by the Treasury Board based on the President’s recommendation. The Treasury Board also approves the employee contribution rates for the Canadian Forces-Regular Force Pension Plan and the Royal Canadian Mounted Police Pension Plan.

Contribution rates have been gradually increasing over time to reach a balanced employer:employee cost-sharing ratio. The rates are currently set to reach a cost-sharing ratio of 50:50 by 2017.

For more information, visit contribution rates.

For Contribution Rates for Operational Service, please visit Operational Service Provisions Contribution Rates.

Consolidated Revenue Fund ( Trésor)

The total of all public moneys that are on deposit at the credit of the Receiver General for Canada and from which most government expenditures are made.

Institutions starting with the letter D

Date of Retirement ( Date de la retraite)

The date on which a pension plan member most recently ceased to be employed, which is normally the day following the last day for which the plan member received salary. If the plan member was on authorized leave without pay, the retirement date is the day following the date on which the employing department advises the Government of Canada Pension Centre that the plan member ceased to be employed.

Deferred Annuity ( Pension différée)

If you became a member of the public service pension plan on or before December 31, 2012:

A benefit that is available to most plan members who leave the public service and have at least two years of pensionable service. This benefit is calculated using the same formula as an immediate annuity, but payment is deferred.

If you became a member to the public service pension plan on or after January 1, 2013:

A deferred annuity is available to most plan members who leave the public service before age 65 and have at least two years of pensionable service. This benefit is calculated using the same formula as an immediate annuity, but payment is deferred.

Defined Benefit Pension Plan ( Régime de pension à prestations déterminées)

A type of registered pension plan that promises a certain level of pension, usually based on the plan member’s salary and years of service. The public service pension plan is a defined benefit pension plan. This is contrasted with defined contribution pension plans where the benefit at retirement is determined by the amount of annuity that the accumulated contributions plus interest can purchase at retirement.

Designated Beneficiaries for Supplementary Death Benefit Plan Purposes ( Bénéficiaires désignés aux fins du Régime de prestations supplémentaires de décès)

The people who are named by a plan member to receive the Supplementary Death Benefit and, if applicable, the minimum benefit payable under the public service pension plan after the death of a member. If there are no designated beneficiaries, then the benefit will be paid to the member’s estate.

Disability ( Invalidité)

Disability is defined as a physical or mental impairment that prevents the individual from engaging in any employment for which the individual is reasonably suited by virtue of his or her education, training or experience and that can reasonably be expected to last for the rest of the individual’s life.

Institutions starting with the letter E

Elective Service see also Service Buyback ( Service accompagné d’option)

An eligible period of employment, either in the public service or with some other employer that occurred before the employee became a contributor to the public service pension plan. The plan member may choose to count these periods of prior service as pensionable service.

Institutions starting with the letter F

Institutions starting with the letter G

Garnishment, Attachment and Pension Diversion Act (GAPDA) ( Loi sur la saisie-arrêt et la distraction de pensions (LSADP))

An Act to provide for the diversion of pension benefits payable under various Acts, including the Public Sector Compensation Act, to satisfy or partially satisfy an obligation to pay maintenance or support to a spouse, child or other dependant.

Institutions starting with the letter H

Institutions starting with the letter I

Immediate Annuity ( Pension immédiate)

If you became a member of the public service pension plan on or before December 31, 2012:

You can receive an immediate annuity if you leave the public service at age 60 or over with at least 2 years of pensionable service or at age 55 or over with at least 30 years of pensionable service.

If you became a member to the public service pension plan on or after January 1, 2013:

You can receive an immediate annuity if you leave the public service at age 65 or over with at least 2 years of pensionable service or at age 60 or over with at least 30 years of pensionable service.

Increasing Your Pension ( Augmenter votre pension)

Purchase of prior eligible service that a contributor may count as pensionable, at his option, subject to certain conditions.

Indeterminate employee ( Employé nommé pour une période indéterminée)

An employee appointed for an indefinite period.

Indexing ( Indexation)

It is the automatic adjustment of pensions in pay, or accrued pension benefits (deferred annuities), in accordance with changes in the Consumer Price Index. Public service pensions are indexed in January of each year in order to maintain their purchasing power.

Institutions starting with the letter J

Institutions starting with the letter K

Institutions starting with the letter L

Liability Account ( Compte de passif)

An account that records financial obligations of the government.

Institutions starting with the letter M

Maximum pensionable earnings ( Maximum des gains annuels ouvrant droit à pension (MGAP))

See Year’s maximum pensionable earnings.

Minimum Benefit ( Prestation minimale)

A benefit that is equal to the payment of the plan member’s basic pension for a period of five years. If the plan member or his eligible surviving spouse or children have not received, in total, pension payments equal to five times the amount of the plan member’s annual basic pension, the balance in the form of a lump sum becomes payable to the designated beneficiaries under the Supplementary Death Benefit (SDB) or, if none, to his estate.

Institutions starting with the letter N

Institutions starting with the letter O

Operational Service Provisions - Correctional Services Canada ( Dispositions liées au service opérationnel - Service Correctionnel Canada)

Service with Correctional Services Canada is broken down by two types:

Actual operational service:

You accumulate actual operational service when your principal place of work is not one of the following:

• The national headquarters of a regional headquarters of CSC;
• The office of the CSC Commissioner; or
• A regional Correctional Staff College or any other institution that provides similar training to CSC employees.

Deemed operational service:

If you have accumulated at least 10 years of operational service and have ceased to be employed in actual operational service but continue to be employed by CSC, you may accumulate operational service while employed by CSC, subject to certain conditions.

For Contribution Rates, please visit the section on Operational Service Provisions Contribution Rates.

Institutions starting with the letter P

Pension Benefits Division Act (PBDA) ( Loi sur le partage des prestations de retraite (LPPR))

An Act to provide for the division of pension benefits payable under the Public Sector Compensation Act (and various other federal statutes) after the breakdown of a marriage or common-law relationship. An application for division may be submitted if a written agreement or Court Order states that the plan member’s pension is to be divided.

Pensionable Service ( Service ouvrant droit à pension)

Periods of service to the credit of a Public service pension plan member. This includes any periods of purchased service (service buyback/elective service).

Pension Transfer Agreement (PTA) ( Accord de transfert de pensions (ATP))

An Agreement negotiated between the Government of Canada and an eligible employer to provide portability of accrued pension credits from one pension plan to the other.

Pension Portability ( Transférabilité des pensions)

Arrangements for the transfer of an employee’s pension credits to another pension plan. See the explanations on Pension Transfer Agreement and Transfer Value.

Plan Member ( Participant au régime)

If you work for the federal public service, you become a member of the public service pension plan and are required to contribute if:

• You are an indeterminate employee hired to work an average of at least 12 hours a week.
• You are an employee, hired for more than 6 months to work an average of at least 12 hours a week.
• You are an employee, initially hired for 6 months or less to work an average of at least 12 hours a week, and have worked for more than 6 continuous months.

The date when you became a member of the public service pension plan determines when you will be eligible to receive an unreduced pension benefit:

• If you were a member on or before December 31, 2012, you are eligible to draw an unreduced pension benefit at age 60 with at least two years of pensionable service (or age 55 with 30 years of service); or,
• If you become a member on or after January 1, 2013, you are eligible to draw an unreduced pension benefit at age 65 with at least two years of pensionable service (or age 60 with 30 years of service).

Public Sector Pension Investment Board (PSPIB) ( Office d’investissement des régimes de pensions du secteur public (OIRPSP))

Board established on April 1, 2000 under the Public Sector Pension Investment Board Act. The Board’s mandate is to invest the employer and employees’ pension contributions made on or after April 1, 2000 in the financial markets.

Public service pension plan ( Régime de pension de retraite de la fonction publique)

Pension plan implemented on January 1, 1954 under the Public Service Superannuation Act that provides benefits for public service employees payable on retirement, termination of service or disability and for their survivors after death.

Public Service Superannuation Act (PSSA) ( Loi sur la pension de la fonction publique (LPFP))

An Act to provide pension benefits to eligible federal public servants and their dependants. The Public service pension plan provides benefits for public service employees payable on retirement, termination of service or disability and for their survivors after death under the provisions of the PSSA.

Institutions starting with the letter Q

Quebec Pension Plan (QPP) ( Régime de rentes du Québec (RRQ))

A pension plan similar to the Canada Pension Plan, which covers persons working in the province of Quebec. It is administered by the Régie des rentes du Québec.

Institutions starting with the letter R

Retirement Compensation Arrangement (RCA) ( Convention de retraite (CR))

A plan which provides benefits that exceed the allowable limits for a registered pension plan under the Income Tax Act.

Return of Contributions (ROC) ( Remboursement de cotisations)

A benefit that is available if you have been with the public service for less than two years, have been contributing to the public service pension plan and resign voluntarily, you are only entitled to a return of your contributions plus interest.

Institutions starting with the letter S

Salary ( Salaire)

Your basic pay. It excludes any amount received as an allowance, special remuneration, gratuity or payment for overtime or other compensation, unless that amount is deemed to be part of your basic pay or has been included in it.

Service Buyback ( Rachat de service)

Purchase of prior eligible service that a contributor may count as pensionable, at his option, subject to certain conditions.

Supplementary Death Benefit (SDB) ( Prestation supplémentaire de décès (PSD))

The SDB is similar to a decreasing term life insurance benefit equal to twice the annual salary of the plan member; coverage decreases by 10 percent per year starting at age 66. A minimum amount of coverage ($10,000) is provided at no cost to the plan member at age 65 for plan members entitled to an immediate annuity or an annual allowance payable within 30 days after termination of employment in the public service. This minimum coverage is maintained for life.

Supplementary Retirement Benefits Act (SRBA) ( Loi sur les prestations de retraite supplémentaires (LPRS))

An Act to provide supplementary retirement benefits (indexing) for those in receipt of a pension payable out of the Consolidated Revenue Fund. For the full Act, refer to the Department of Justice.

Survivor ( Survivant)

For the purpose of the pension plan:

The survivor of a contributor is the person who, at the time of the contributor’s death:

• was married to the contributor (plan member) before retirement; or
• was cohabitating in a relationship of a conjugal nature with the contributor prior to retirement and for at least one year prior to the date of death.

Survivor Benefit ( Prestation au survivant)

A pension benefit that is paid to the eligible survivor of a plan member who dies. The common-law survivor of a plan member may be entitled to a survivor benefit if this person has lived with the plan member in a relationship of a conjugal nature prior to retirement and for at least one year prior to the date of death.

Institutions starting with the letter T

Transfer Value ( Valeur de transfert)

If you became a member of the public service pension plan on or before December 31, 2012:

If you leave the public service before age 50 with at least 2 years of pensionable service, you may choose to receive your accumulated pension in the form of a transfer value rather than as future monthly pension payments. A transfer value is a calculated lump-sum value of your accumulated pension benefit that would be payable in the future. This benefit is the actuarial value of the plan member’s future pension benefits. It must be transferred to another registered pension plan, to a retirement savings vehicle or to a financial institution to purchase an annuity.

If you became a member to the public service pension plan on or after January 1, 2013:

If you leave the public service before age 55 with at least 2 years of pensionable service, you may choose to receive your accumulated pension in the form of a transfer value rather than as future monthly pension payments. A transfer value is a calculated lump-sum value of your accumulated pension benefit that would be payable in the future. This benefit is the actuarial value of the plan member’s future pension benefits. It must be transferred to another registered pension plan, to a retirement savings vehicle or to a financial institution to purchase an annuity.

Transfer Value Reinstatement ( Rétablissement de service visé par une valeur de transfert)

A transfer value reinstatement is a special service buyback to reinstate the pensionable service for which you received a transfer value benefit under the Public Service Superannuation Act (PSSA).

Transformation of Pension Administration ( Transformation de l’administration des pensions)

This transformation will modernize the public service pension systems and enhance service to plan members and their beneficiaries. Over the next four and a half years, PWGSC will replace the pension systems as well as centralize and improve client service. It will offer self-service options and automated initiation of service requests.

Treasury Board of Canada, Secretariat (TBS) ( Secrétariat du Conseil du Trésor du Canada (SCT))

The TBS is the administrative arm of the Treasury Board. It provides advice and support to the Treasury Board. The President of the Treasury Board is the minister responsible for the Public Service Superannuation Act (PSSA), including financial management of the Public Service Superannuation Account and the Public Service Pension Fund.

Institutions starting with the letter U

Institutions starting with the letter V

Vesting ( Acquisition des droits aux prestations)

The establishment of the right to a retirement benefit. In the case of the federal public sector pension plans, this right is granted after two years of pensionable service.

Institutions starting with the letter W

Waiver ( Exonération)

A waiver is the removal of the normal reduction to an annual allowance  that is applied because the individual, at termination, did not meet the age and service thresholds to receive an immediate annuity. This reduction would normally be five percent (5%) for every year that the individual’s pensionable service credit is less than 30 years or the age is less than 60 years for plan members employed on or before December 31, 2012 and less than 65 years of age for plan members employed on or after January 1, 2013.

Institutions starting with the letter X

Institutions starting with the letter Y

Year’s Maximum Pensionable Earnings (YMPE) ( Maximum des gains annuels ouvrant droit à pension (MGAP))

The maximum earnings for which contributions can be made to the Canada Pension Plan / Quebec Pension Plan (earnings ceiling) during the year.

Institutions starting with the letter Z