Public Service Pension Plan

Understanding your pension is an important first step in preparing for retirement. Check out the page What steps should I follow when preparing to retire for a helpful starting point from the federal government. You may also find their frequently asked questions useful.

Log into the Compensation Web Applications (CWA) portal for a copy of your pension plan statement. You can also review your pensionable service, confirm your retirement projections and ensure your personal details are up to date.

https://www.canada.ca/en/public-services-procurement/services/pay-pension/public-service-pension-plan/contact/access-pension-portal.html

The Pension Centre is a key resource for updating your pension account, making requests (like to retire), and fixing any errors in your file. They are the only resource that can currently provide you with an accurate pension estimate. Please have your Personal Record Identifier (PRI) ready when contacting the Pension Centre.

You should contact the Pension Centre at least six months prior to your retirement date, however they also need a formal notice of retirement three months before you retire.   For more information, consult the Government of Canada Frequently Asked Questions page Preparing for retirement – Pension.

Anyone who was hired and contributing to the pension plan up to December 31, 2012 is part of Group 1. The age of retirement for Group 1 is 60 (early retirement at 50).

Anyone who was hired and contributed to the pension plan, on, or after January 1, 2013 is part of Group 2. The age of retirement for Group 2 is 65 (early retirement at 55). Group 2 does have lower annual contributions to the plan due to the anticipated shorter benefit period.

Your retirement income is calculated based on your five consecutive years of highest paid service as well as your years of service. You can use the PSP tool to estimate what your monthly and yearly benefits would be. You may also contact the Pension Centre to request an accurate Pension Statement and a pension estimate, based on your actual earnings and employment history.  Please note that your union does not have access to your pension account and cannot assist you in estimating your pension benefit.

Yes, the PSP is adjusted annually by  the Consumer Price Index (CPI), which is an objective, common measure of inflation. Without indexing, pensioners would fall behind in their purchasing power. Indexing keeps your pension up with the rate of inflation, meaning your pension retains its value over time. You can access more information on indexation and current rates here.

No, like most large-scale, Canadian defined benefit pension plans, the Public Service Pension Plan is one of the most stable, cost-efficient, and sustainable pension plans in the world.

The PSPP delivers excellent long-term investment returns at very low management costs thanks to its size and in-house investment management. These efficiencies mean that a significant portion of your pension is paid for by investment income.  In fact, research shows that, typically, for every dollar you and your employer invest, you get over seven dollars back in pension benefits.  All with no added cost to you or the employer.

The plan is also cost-predictable for employers: contribution rates are set based on professional actuarial valuations, ensuring long-term balance between contributions and benefits. Importantly, the employer’s share of pension costs isn’t an “extra expense.” It’s part of members’ total compensation package, in other words, employees earn slightly lower salaries in exchange for guaranteed retirement income.

What’s more is that, in recent years, your pension has been so well funded that it has reached Non-Permitted surplus status.  That means the plan fund exceeds future pension costs plus a significant contingency.  As a result, the plan will need to apply temporary changes to reduce the excess surplus.

Once you notify the Pension Centre of your retirement date, they will begin processing your pension immediately. Any inaccuracies related to information received from the Phoenix Pay System will then be adjusted as needed by the Pension Centre. Once the Pension Centre has your accurate pay information they will process your pension benefit. You can consult the Government of Canada Frequently Asked Questions page Preparing for retirement – Pension for more information or contact the Pension Centre directly for an estimate of your pension earnings should you have a specific issue or concern. It should be noted that the cancellation of mailed pension statements does not affect your pensionable earnings.

If you believe a pay error has impacted your pension, it is important to indicate this to the pension centre.  Should you be unable to resolve this issue together, your union may be able to provide additional support and guidance.

Some members want to phase into retirement by reducing their work hours as they get closer to their retirement date by choosing to work part-time. As reducing your hours will reduce your annual salary, there may be an impact to your pension. However the impact, if any, will vary greatly from person to person. You should always contact the Pension Centre and obtain accurate information for all the scenarios you are considering. Some members benefit from pre-retirement leave programs, which allow you to reduce your hours without it negatively impacting your pension accrual. For more information on part-time working arrangements, you can refer to the employer’s Directive on Leave and Special Working Arrangements and the Leave without pay information package, as well as your collective agreement.

Prior to 2000, public service pensions were, in a word, paid directly from employer and employee contributions. Because the plan was not properly invested, there was no real investment earnings to cushion pensions from sudden changes to costs or revenue. The plan was volatile. In 1999, the Public Sector Pension Investment Corporation was created to separate pension contributions from other government funds. The Public Sector Pension Investment Corporation has independently managed the employer and employee pension contributions since 2000 – investing them in the Canadian and global economy. This means that when you draw your income at retirement, it comes from this investment fund and not directly from government funds. This makes the PSP plan sustainable and cost-effective for taxpayers.