Reserve Force Pension Plan Regulations (SOR/2007-32)

Marginal note:Deferred annuity

• 44 (1) A member who ceases to be a participant and has to their credit not less than two years of pensionable service and is not entitled to an immediate annuity is entitled to a deferred annuity.

• Marginal note:Commencement of deferred annuity

  (2) The commencement date of the annuity is the day on which the pensioner reaches 60 years of age.

Marginal note:Annual allowance

• 45 (1) A pensioner who is entitled to a deferred annuity may opt for an annual allowance in place of the annuity.

• Marginal note:Commencement of annual allowance

  (2) The commencement date of the annual allowance is the date of the option, if the pensioner is 50 or more years of age at that time, or the day on which the pensioner reaches 50 years of age, if the pensioner is less than 50 years of age on the date of the option.

Marginal note:Amount of annual allowance

• 46 (1) The amount of the annual allowance is the amount determined by the formula

  A – (A × 5% × B)

  where

  A

  is the amount of the deferred annuity; and

  B

  is 60 minus the pensioner’s age in years, rounded to the nearest 1/10 of a year, at the time the allowance commences.

• Marginal note:Amount of annual allowance, at least 25 years of pensionable service

  (2) If a pensioner is 50 years or more of age on the day on which they cease to be a participant and has to their credit not less than 25 years of pensionable service, the amount of the annual allowance is the greater of

  • (a) the amount determined by the formula set out in subsection (1), and

  • (b) an amount determined by the same formula but where B is the greater of

    • (i) 55 minus the pensioner’s age in years, rounded to the nearest 1/10 of a year, at the time the pensioner makes the option, and

    • (ii) 30 minus the number of years, rounded to the nearest 1/10 of a year, of pensionable service to the pensioner’s credit.

Marginal note:Bridge benefit

• 47 (1) A pensioner is also entitled to a bridge benefit.

• Marginal note:Commencement of bridge benefit

  (2) The commencement date of the bridge benefit is the same date as that of the annuity or annual allowance.

Marginal note:Interpretation

• 48 (1) For the purpose of subsection (2),

  • (a) the bridge benefit earnings for a calendar year are the lesser of

    • (i) the participant’s pensionable earnings for that year, and

    • (ii) the Year’s Maximum Pensionable Earnings for that year, within the meaning of subsection 2(1) of the Canada Pension Plan; and

  • (b) the updated bridge benefit earnings for a calendar year are the lesser of

    • (i) the participant’s updated pensionable earnings for that year, and

    • (ii) the average of the Year’s Maximum Pensionable Earnings for five years consisting of the year the member most recently ceased to be a participant and the preceding four years.

• Marginal note:Amount of bridge benefit

  (2) The annual amount of the bridge benefit is equal to 0.5 per cent of the greater of the pensioner’s total bridge benefit earnings and total updated bridge benefit earnings.

• Marginal note:Reduction

  (3) If a pensioner opts for an annual allowance, the amount of the bridge benefit shall be the amount determined by the formula

  A × B/C

  where

  A

  is the amount calculated under subsection (2);

  B

  is the amount of the annual allowance; and

  C

  is the amount of the deferred annuity to which the pensioner was entitled.

Marginal note:Cessation of benefits on again becoming a participant

49 A pensioner ceases to be entitled to an annuity or annual allowance on the day before the day on which they again become a participant.

Marginal note:Conversion to immediate annuity on disability

• 50 (1) If a pensioner, not having reached 60 years of age but having become entitled under these Regulations to a deferred annuity or annual allowance, becomes entitled to a disability pension under the Canada Pension Plan or a provincial pension plan, the pensioner ceases to be entitled to the deferred annuity or annual allowance and becomes entitled to an immediate annuity, but shall not be entitled to a bridge benefit.

• Marginal note:Commencement of annuity

  (2) The commencement date of the annuity is the day on which the pensioner becomes entitled to the disability pension.

• Marginal note:Benefit when entitlement to disability pension ceases

  (3) If a pensioner, not having reached 60 years of age, has ceased to be entitled to the disability pension, the pensioner ceases to be entitled to the immediate annuity and becomes entitled to the deferred annuity or annual allowance and the bridge benefit to which the pensioner was previously entitled.

Marginal note:Deduction calculation

• 51 (1) In the event that a pensioner ceases to be entitled to an annual allowance under section 49 or subsection 50(1), an amount, subject to subsections (2) and (3), determined by the following formula shall be deducted from any annuity or annual allowance payments that the pensioner receives on again ceasing to be a participant or on becoming entitled to an annuity under subsection 50(1):

  A/12 × B

  where

  A

  is five per cent of the sum of the annual allowance and the bridge benefit that the pensioner was receiving before again becoming a participant or before becoming entitled to a disability pension under the Canada Pension Plan or a provincial pension plan; and

  B

  is the lesser of

  • (a) the number of years, rounded to the nearest 1/10 of a year, during which the pensioner received the annual allowance; and

  • (b) the value determined for B of either subsection 46(1) or paragraph 46(2)(b), which value was used in determining the amount of the annual allowance.

• Marginal note:Minimum amount

  (2) The deduction from the amount of those payments shall not result in the pensioner receiving less than the payments that the pensioner was receiving — before the pensioner again became a participant or the pensioner became entitled to the disability pension — minus the amount of the bridge benefit, if the pensioner is no longer entitled to it.

• Marginal note:Limit

  (3) The total of the amounts to be deducted shall not exceed the total amount that was received as an annual allowance and a bridge benefit by the pensioner before the pensioner again became a participant or the pensioner became entitled to the disability pension.

Marginal note:Terms of payment

• 52 (1) The annuity, annual allowance and bridge benefit shall be paid in equal monthly payments in arrears,

  • (a) in respect of the annuity or annual allowance, until the end of the month during which the pensioner dies; and

  • (b) in respect of the bridge benefit, until the earliest of the following:

    • (i) the day preceding the day on which the pensioner becomes entitled to a disability pension under the Canada Pension Plan or a provincial pension plan,

    • (ii) the last day of the month in which the pensioner reaches 65 years of age, and

    • (iii) the day that the annuity or annual allowance ceases to be paid.

• Marginal note:Arrears

  (2) Any amount in arrears after the pensioner’s death shall be paid to the survivor who is entitled to an annual allowance under Division 2. If there is no survivor, it shall be paid to the pensioner’s estate or succession.

• Marginal note:Apportionment if two survivors

  (3) If there are two survivors who are entitled to an annual allowance under Division 2, each survivor’s portion shall be determined in accordance with section 64 as if the reference to “death benefit” in that section were a reference to “amount in arrears”.

Transfer Value

Marginal note:Eligibility

53 A pensioner who is entitled to a deferred annuity and has not reached 50 years of age may opt for the payment of a transfer value, and the making of the option extinguishes the entitlement to the deferred annuity.

Marginal note:Time limit for opting

54 A pensioner shall make an option for the payment of a transfer value no later than one year after the day on which they cease to be a participant.

Marginal note:Option not made

55 The option is deemed not to have been made if, before the transfer value has been paid, the former participant again is entitled to receive earnings as a member or is required to contribute to the Canadian Forces Pension Fund.

Marginal note:Calculation of transfer value

56 The transfer value is an amount, together with interest calculated in accordance with section 62, equal to the greater of

• (a) the actuarial present value, on the date of the option, of the accrued pension benefits that would be payable to or in respect of the pensioner, and

• (b) a return of contributions, calculated as of the date of the option as if the pensioner had been entitled to a return of contributions on that date.

Marginal note:Pensionable earnings to pensioner’s credit

57 The calculation of the accrued pension benefits shall be based on the pensionable earnings to the pensioner’s credit on the day after the day on which they cease to be a participant and for which they have paid or ought to have paid before the date of the option.

Marginal note:Calculation rules

58 The calculation of the actuarial present value of the accrued pension benefits is subject to the following rules:

• (a) the indexing benefits referred to in Division 3 are to be increased to take into account the period beginning on the later of January 1 of the year in which the option was made and the day on which the pensioner ceased to be a participant and ending on the date of the option; and

• (b) the possibility that the pensioner could receive an annual allowance is to be excluded.

Marginal note:Actuarial valuation report

• 59 (1) For the purpose of subsection (2), the actuarial valuation report is the actuarial valuation report most recently laid before Parliament, under section 56 of the Act, before the date of the option or, if that report was laid before Parliament in the month in which the option was made or in the preceding month, the preceding report that was laid before Parliament, in each case with any terminological modifications that the circumstances require.

• Marginal note:Actuarial assumptions

  (2) In determining the actuarial present value of the accrued pension benefits, the following actuarial assumptions are to be used:

  • (a) the mortality rates for pensioners and survivors are the mortality rates, including annual percentages of mortality reduction, in respect of contributors and survivors used in the preparation of the actuarial valuation report;

  • (b) the interest rates are the interest rates for fully indexed pensions — adjusted by the interest rates for unindexed pensions to take into account Division 3 — determined in accordance with the section entitled “Pension Commuted Values” of the Standards of Practice — Practice-Specific Standards for Pension Plans, published by the Canadian Institute of Actuaries, as amended from time to time;

  • (c) the probability that a pensioner will be survived by children is based on the rates regarding the average number, average age and eligibility status of children at the death of a pensioner, used in the preparation of the actuarial valuation report;

  • (d) the probability that a pensioner will become entitled to an annuity under subsection 50(1) is based on the rates of termination owing to disability (any occupation), in respect of contributors used in the preparation of the actuarial valuation report, taking into account the probability — as set out in that report — that there would be immediate eligibility for a disability pension under the Canada Pension Plan or a provincial pension plan; and

  • (e) the probability that a pensioner will have a survivor at death is based on the probability that a contributor will have a survivor at death and on the age difference between the contributor and the survivor that was used in the preparation of the actuarial valuation report.