Your Pension Plan
(Publié aussi en français sous le titre Votre régime de pensions)
Note: If there is a discrepancy between any printed version and the electronic version of this document, the electronic version will prevail.
Table of Contents
Preface	iii
Introduction	1
The Public Service Superannuation Act	1
How the Public Service Plan Relates to the Canada and Quebec Pension Plans	1
Part I – Benefits	2
A. Retirement Benefits	2
Types of Retirement Benefits and Circumstances	2
Table I – Your Pension Entitlement	9
Choosing Your Benefit	10
Pension Increases (Indexing)	10
Integration of Benefits with the CPP and QPP	11
Benefits in the Event of a Separation or a Divorce –  The Pension Benefits Division Act (PBDA)	13
B. Benefit for Your Survivor	14
Survivor Benefit	14
Divorce and Separation	15
Relationship of a Conjugal Nature	15
Waiver of a Survivor Benefit	15
Minimum Benefit	15
Allowances to Children	16
Submitting Personal Documents	16
Table II – Survivor Benefit	17
C. Supplementary Death Benefit	17
Amendments of 1999	18
Coverage	18
Cost	19
Continuity of Coverage	19
Beneficiaries	21
Part II –  Contributions and Service	23
A. Contributions for Current Service	23
PSSA Contribution Rates	23
Table III – Contribution Rates for PSSA and CPP/QPP,  2000–2003	24
Contributions on Leave Without Pay	25
B. Elective Service	26
Current vs. Elective Service	26
Types of Elective Service	28
Calculation of Elective Service	29
Medical Examinations	32
Cost Estimates	33
How to Make an Election	33
How to Pay for an Election	33
Some General Points About Elections	34
Pension Transfer Agreements	34
Part III – Funding of  the Public Service Pension Plan	36
Funding Before April 1, 2000	36
Funding After April 1, 2000	36
Cost-Sharing	36
Deficit and Surplus Management	37
Annex A – List of Important Addresses and Phone Numbers	38
Annex B – Pension Transfer Agreements	39

Preface
This booklet provides a factual, concise explanation of the major terms of the Public Service Superannuation Act (PSSA, or “the Act”), your pension plan. As a new employee or one who has been in the Public Service for some time, you have a vital interest in the benefits this plan provides to you and your family and in the contributions you and your employer make to provide these benefits.
For some aspects of the Act you will have to make decisions, within given time limits, that will affect your eventual benefits and those of your family. We hope that, by carefully studying this booklet, you will be able to make the choices that are most beneficial to you. These decisions are your responsibility alone: you must learn about the choices available to you and the time within which you have to make them. 
Although the information in this booklet applies to the great majority of employees, it isn’t possible to cover every circumstance. If you feel that your situation hasn’t been covered, or if you wish to confirm that a particular provision does or doesn’t apply to you, you should talk to your compensation office.
This booklet has been revised to reflect amendments made to the Public Service Superannuation Act (PSSA) on June 17 and September 14, 1999. To find summaries of the 1999 amendments to the PSSA, you may refer to the Treasury Board Web sites listed in Annex A.
This booklet is provided for information purposes only and does not constitute a legal document on your rights and obligations. Should there be any conflict between the information in this document and that contained in the Public Service Superannuation Act and Regulations, or other applicable laws, the Act and Regulations apply.
Note:	Please see Annex A of this booklet for a list of important addresses and telephone numbers that may be of use to you.

Introduction
Your pension plan is designed to provide you with a retirement income during your lifetime. In the event of your death, the plan provides an income for your survivor and eligible children.
This plan is generally referred to as a defined benefit pension plan. A defined benefit plan is one in which the benefits payable on death, disability, termination of service and retirement are specified in the plan document, in this case, the Public Service Superannuation Act and Regulations. The benefits are directly related to the employee’s salary and period of participation (service with contributions) in the plan. 
The Public Service Superannuation Act
This Act, which provides pensions for public service employees, has been in effect since January 1, 1954. Part II of the Act, the Supplementary Death Benefit Plan, which provides decreasing term life insurance coverage to pension plan contributors, was added a year later. Since then, both the Act and its supporting regulations have been amended many times to respond to changes in the employees’ and the employer’s needs and to reflect changes in other federal and provincial laws. This booklet includes amendments up to September 14, 1999.
The President of the Treasury Board is the minister responsible for the PSSA, including financial management of the Superannuation Account and the Public Sector Pension Fund. Public Works and Government Services Canada, under the direction of its minister, provides the day-to-day administration of the Act. The Office of the Superintendent of Financial Institutions makes periodic actuarial valuations of the Superannuation Account and the Public Sector Pension Fund.
Other federal legislation complements the public service pension plan. Notably, a Retirement Compensation Arrangement (RCA) established under the Special Retirement Arrangements Act in 1994 provides those pension benefits that cannot be provided under the PSSA because of income tax rules for registered pension plans. Such benefits are paid from the RCA Account and are payable at the same time and in the same manner as those payable under the PSSA.
How the Public Service Plan Relates to the Canada and Quebec Pension Plans
The public service pension plan is integrated with the Canada and Quebec pension plans (CPP/QPP). Integration affects both contributions and benefits. This means, firstly, that you contribute to your public service plan at a reduced rate on your salary up to the maximum covered by CPP/QPP. Secondly, it means that your pension under the public service plan will also be reduced by a standard formula when you become eligible to draw CPP/QPP benefits at age 65 or when you begin to draw CPP/QPP disability benefits at any age. (See “When will my public service pension be reduced?” p. 11.)

Part I – Benefits
A. Retirement Benefits
The retirement benefits payable to employees under the PSSA are designed to meet the needs of public service employees in their various situations at retirement. The benefits available to you will depend on your age, the years of service to your credit and, in some cases, the reason your employment ended.
To understand fully the benefits to which you may become entitled, read all of the following sections carefully and consult Table I.
Types of Retirement Benefits and Circumstances
How do the PSSA amendments of 1999 affect basic benefits?
As of June 17, 1999, the formula used to calculate basic retirement benefits for current plan members has been improved in your favour. Previously, the calculation was based on average best annual salary over six consecutive years. Now, the salary is averaged over five consecutive years. In most cases, this change will result in higher benefits at retirement.
Note: The new formula applies only to those who retire on or after June 17, 1999.
What happens if I have two or more years of pensionable service when I retire?
You will be entitled to either an immediate or a deferred pension, depending on your age at retirement. Or you may be able to choose a transfer value, depending on your age and how many years of pensionable service you have to your credit.
In most cases, the basic benefit (pension) formula below is used to calculate the benefit:
2 per cent	X	number of years of pensionable service	X	average salary for your 5 consecutive years of highest paid service	
The benefit for any period of part-time pensionable service will be calculated as follows:
2 per cent	X	number of years of
part-time pensionable service	X	average salary for your 5 consecutive years of highest paid service based on full-time salary rate	X	assigned part-time hours / standard full-time hours	
Notes:	1.	Pensionable service means the years (complete or partial) to your credit at retirement. It includes any periods of elective service regardless of whether you have paid fully for that service. For purposes of determining whether a service threshold has been met (e.g., 2 years or 30 years), a year of part-time service counts as one year of pensionable service.
	2.	Average salary is your salary during five consecutive years of highest paid pensionable service. It includes any salary you earned after completing 35 years of service, if that salary is the highest. For periods of part-time pensionable service, the equivalent full-time salary rate is used but the pension benefit is adjusted to reflect the assigned hours of part-time work.
Example:
A person who retires with 35 years of service and an average salary of $40,000 over the best five years would receive two per cent X 35 X $40,000 = $28,000 per annum.
If that same person had 25 years of full-time service, along with 10 years of part-time service working 20 hours during a standard 37.5-hour work week, the calculation would be as follows:
2 per cent X 25 X $40,000 = $20,000
plus
2 per cent X 10 X $40,000 X 20/37.5 = $4,267
Total = $24,267 per annum
Retirement at or after 60 with two or more years of pensionable service, or at 55 with 30 or more years of pensionable service (immediate annuity)
If you retire at or after age 60 with two or more years of pensionable service, or at or after age 55 with 30 or more years of pensionable service, you are entitled to an immediate annuity calculated according to the formula set out above. It will not be reduced in any way, except for the appropriate adjustment for the CPP or QPP at age 65 or earlier if you are receiving disability benefits under either of these plans (see “When my public service pension be reduced,” p. 11). For purposes of determining whether a service threshold has been met (e.g., 2 years or 30 years), a year of part‑time service counts as one year of pensionable service.
Retirement before 60 with two or more years of pensionable service (no entitlement to an immediate annuity)
If you retire before you reach age 60 (unless you are between age 55 and 59 and have 30 or more years of service to your credit), then you have the following choice of benefits:
•	You may choose a deferred annuity which becomes payable at age 60. This benefit is calculated using the formula described above for an immediate annuity. If you choose this benefit you may, at any time after you reach age 50, request an annual allowance as described below.
•	You may choose an annual allowance, which is a reduced pension. This benefit is payable at age 50 at the earliest.
•	You may choose to receive your earned pension benefits in the form of a transfer value rather than as a future monthly pension. This benefit is only available if you leave the Public Service before age 50 (see “Transfer value option,” below).
•	If you have been employed with the Public Service less than two years and have made contributions under the Public Service Superannuation Act and you resign voluntarily, you are entitled only to a return of contributions with interest. However, two years from the day on which you began to make contributions under the PSSA, your contributions will be “locked-in,” you will no longer be entitled to a return of contributions, and the benefit options set out above will become available to you.
•	If you leave the Public Service to work for another employer who has entered into a Pension Transfer Agreement with the federal government, it may be possible for you to transfer your PSSA pension credits to your new employer’s pension plan. (See ”Pension Transfer Agreements,” p. 34.) 
How an annual allowance is calculated
An annual allowance is calculated in one of two ways, depending on your age when you retire and the years of service you have to your credit.
Formula 1
The amount of the deferred annuity is reduced by five per cent for every year, to the nearest one tenth of a year, that you are under age 60 at the time the allowance is payable.
Example:
If you are exactly age 54 with 23 years of service, the calculation will be as follows:
60 – 54 = 6 years X 5 per cent = 30 per cent
Your annual allowance would equal your deferred annuity reduced by 30 per cent. If the deferred annuity were $20,000 per annum, the annual allowance would be $14,000.
Formula 2
If you have 25 or more years of service and are at least 50 when you leave the Public Service, an annual allowance is calculated by determining the amount of the deferred annuity and reducing it by the greater of the following two amounts:
•	five per cent for every year, to the nearest one tenth of a year, that you are younger than 55 when you retire or when you opt for the benefit, whichever is later; 
or
•	five per cent for every year, to the nearest one tenth of a year, that your pensionable service is less than 30 years.
Example:
If you are exactly age 54 with 27 years of service, the calculation will be as follows:
55 – 54 = 1 year X 5 per cent = 5 per cent
or
30 – 27 = 3 years X 5 per cent = 15 per cent
Since 15 per cent is the greater reduction, your annual allowance would equal your deferred annuity reduced by 15 per cent. If the deferred annuity were $20,000 per annum, the annual allowance would be $17,000.
In some cases, if you have 25 or more years of service and are 50 or more when you leave the Public Service, the Formula 1 reduction may produce a greater benefit than the Formula 2 calculation. If so, the larger annual allowance is paid. For example, under Formula 1, if you were 58 with 26 years of service, the annual allowance would equal the deferred annuity reduced by the following amount:
60 – 58 = 2 years X 5 per cent = 10 per cent
Under Formula 2, your deferred annuity would be reduced by the following amount:
55 – 58 = – 3 (therefore no reduction under the age component)
or
30 – 26 = 4 years X 5 per cent = 20 per cent
Since 20 per cent is the greater reduction under Formula 2, your annual allowance using the formula would equal your deferred annuity reduced by 20 per cent.
However, with this combination of age and service, the annual allowance would be determined using the most beneficial formula. In this instance, you would receive an annual allowance equal to the deferred annuity reduced by 10 per cent (Formula 1).
Permanency of Reduction
If you choose a reduced annual allowance, this reduction is permanent except in the case of disability, as described below.
If you are entitled to either a deferred annuity or an annual allowance but become disabled before you reach age 60, you will receive an immediate annuity instead. In such cases, though, the annuity would be adjusted to take into account any amount you had already received as an annual allowance.
If you are between age 50 and 60 when you retire and are interested in an annuity, you should estimate the long-term value of a deferred annuity, which is payable at 60, and compare it to an annual allowance, which is reduced but payable immediately. Depending on your circumstances, you could gain substantially by choosing an annual allowance.
Transfer value option (termination before 50)
If you leave the Public Service before you reach age 50, you may choose to receive your earned pension benefits as a transfer value rather than as a future monthly pension. A pension transfer value is a calculated lump-sum value of your future pension benefit. Contributors have one year after leaving the Public Service to choose this option.
The benefit to be valued will be the deferred annuity payable at age 60, taking into account potential disability and survivor benefits, as well as indexing. The transfer value will be equivalent to the lump-sum value of the earned pension based on actuarial assumptions. If you are paying elective service instalments, only the service you have bought up to the date of the option will be included in the transfer value. Therefore, it is important in this situation to consider the possibility of paying the balance owing on the election to increase the amount of the transfer value. 
The transfer value must be transferred to another registered pension plan, to a locked‑in retirement savings vehicle that complies with the requirements of the federal Pension Benefits Standards Act, or to a financial institution to buy an annuity.
Where an individual’s transfer value exceeds the limits established by the Income Tax Act, the excess will be paid in cash to the former employee and taxed at that time. 
You should direct all inquiries and requests for more information on the transfer value option to your compensation office, which has a comprehensive information package about this option.
Retirement because of disability
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.
For you to qualify for retirement on grounds of disability, Health Canada must certify that you meet this definition.
If you retire because of disability at age 60 or older, your benefits will be the same as if you had retired due to age.
If you have to retire because of disability before you reach age 60, you will receive an immediate annuity unless you have less than two years of pensionable service. 
If you become disabled and choose an immediate annuity, but later regain your health and can return to work, your immediate annuity is terminated and converted to a deferred annuity payable at age 60. If you then wish to convert the deferred annuity to an annual allowance, you may do so at any time after reaching age 50.
If you are retiring because of disability, ask your compensation office about the procedures to follow.
Voluntary retirement with less than two years of continuous employment
Generally speaking, if you leave the Public Service with less than two years of pensionable service, you are entitled only to a return of contributions plus interest, regardless of your age or reason for retiring. The rate of interest payable on a return of contributions is calculated at the Superannuation Fund rate, compounded quarterly. Interest is calculated to the end of the quarter preceding the date of payment.
Even if you have more than two years of pensionable service when taking into account service under another pension plan, when you voluntarily retire from the Public Service before completing two years of substantially-continuous public service employment, your only entitlement will be a return of contributions plus interest. If, however, you came to the Public Service from the Canadian Forces or the Royal Canadian Mounted Police, or if you transferred your pension credits under the terms of a reciprocal pension transfer agreement, you can use this previous service to make up the two years, if necessary. 
Please consult your compensation office for further information.
Involuntary retirement
If you have to retire involuntarily, you are entitled to choose any of the benefits for which, considering your age and service, you would normally qualify.
As well, if you are laid off, the Treasury Board can waive all or part of the reduction in your annual allowance that would normally occur if you are 55 or older, have less than 30 years of pensionable service and have worked for the Public Service for at least 10 years. 
You should consult your compensation office if these are your circumstances and you would like the Treasury Board to waive the reduction in your annual allowance.
Table I on the next page shows the PSSA retirement benefits available under various circumstances.

Table I – Your Pension Entitlement
Identify your circumstances by referring to columns A, B and C.
A	B	C	D	
Reason for
termination	Age	Pensionable
service	Entitlement/
service	options	
Retirement	60 or over	At least 2 years	Immediate annuity	
Retirement	55 or over	At least 30 years	Immediate annuity	
Retirement – disability	Under 60	At least 2 years	Immediate annuity	
Resignation	50 to 59	At least 2 years	Options:
Deferred annuity payable at 60
Annual allowance payable from the later of the date of option or the date of ceasing to be employed.	
Resignation	Under 50	At least 2 years	Options:
Deferred annuity payable at 60
Annual allowance payable at any time from age 50 to 60
Transfer value	
Lay-off	Under 60	At least 2 years	Options:
Deferred annuity payable at 60
Annual allowance (at any time between age 50 and 60)
Transfer value (if less than 50)
Note: If you are over 55 with at least 10 years of public service employment, the Treasury Board may waive the reduction in annual allowance.	
Any reason	Any age	Less than 2 years	Return of contributions with interest	

Choosing Your Benefit
We have covered several situations in which an individual leaving the Public Service must choose between two or more pension benefit options.
You choose your benefit (make your option) by completing a special optional benefit form available from your compensation office. Normally you must complete this form and forward it to the Superannuation Directorate within one year from the day you leave the Public Service. If you do not make your option within this period, you are considered to have chosen a deferred annuity and cannot subsequently choose any other benefit except an annual allowance.
Can I change my option?
Once you make an option, you may change it only under specific and rare circumstances. For this reason, when you retire, you should examine closely the benefits available to you before you complete the optional benefit form. You should also ensure that you make your option within the one‑year time limit; otherwise, you will be deemed to have chosen a deferred annuity.
What happens to my pension if I rejoin the Public Service?
If you are re-employed in a position that does not require you to contribute to the Public Sector Pension Fund, you can receive both your pension and also the salary for your new position.
If, however, you do become a contributor (this will depend on the nature and/or the length of your employment), your annuity or allowance will be stopped and, ordinarily, a new one based on the combined periods of service will be payable when you retire again. If you must accept a return of your contributions when you retire again, the return is limited to your new period of service and your previous basic annuity will be reinstated.
Generally speaking, re-employment outside the Public Service has no effect on any of your entitlements under the PSSA, unless you retired on grounds of disability.
Pension Increases (Indexing)
Consumer Price Index
Your basic pension benefits increase each January after you retire to take into account increases in the Consumer Price Index (CPI). The first increase payable the year after you retire will be prorated to reflect the number of full months since your retirement date. If there is no change in the CPI, or if it drops, your pension will not be adjusted that year.
If you retire with entitlement to a deferred annuity, your basic pension, when it is payable, will be increased by the total accumulated percentage increases from your date of retirement.
Effects of re-employment on indexing benefits
If you become re-employed in the Public Service and begin to make contributions under the PSSA, payment of your benefit, including indexing, will cease. When you cease to be employed again, your indexing benefit will be based on the amount of your basic pension at that time. Your retirement date for determining the annual per centage increase will be the most recent retirement date.
The new combination of benefits – that is, your new annuity plus the increase based on the later year of retirement – could be lower than the previous total entitlement. If you are thinking of taking a job in a contributory position, carefully consider if it would affect your total pension benefits.
Integration of Benefits with the CPP and QPP
Integration of contributions and benefits
When the CPP and QPP came into effect on January 1, 1966, the contribution rates under the federal employee pension plan were integrated with those under the CPP/QPP, rather than added to them. Integration of contributions required an equivalent integration of benefits. PSSA pension benefits are reduced automatically by a standard formula once the pensioner reaches age 65, which is the normal age of eligibility for CPP/QPP benefits, or when he or she begins to draw CPP/QPP disability benefits at any age.
How have the PSSA amendments of 1999 affected the integration of my pension benefits?
As of June 17, 1999, the formula by which PSSA pensions are integrated with CPP/QPP has been improved in your favour. Previously, the formula was based on average maximum pensionable earnings for the year of public service retirement and the two preceding years. Now, the average covers the year of retirement and the four preceding years. In most cases, this change will result in a slightly smaller reduction in PSSA benefits through CPP/QPP coordination.
Note:	This new formula applies only to those PSSA pensioners whose pensions are reduced as a result of CPP/QPP co-ordination on or after June 17, 1999.
When will my public service pension be reduced?
Normally, the reduction due to this co-ordination will occur on the first of the month following your 65th birthday, regardless of whether or not you are receiving benefits under the CPP or QPP. Please note that you must apply for CPP or QPP benefits; you don’t receive them automatically. If you begin to receive your public service pension before you reach age 65 and you are not receiving CPP or QPP disability benefits, you will receive your unreduced benefit from the date of your retirement until the first day of the month following your 65th birthday.
If you become entitled to disability benefits under the CPP or QPP before you reach age 65 and are receiving a pension under the PSSA, your public service pension will be reduced immediately. You must inform the Superannuation Directorate of such an entitlement to avoid receiving a pension overpayment that you will have to repay later. When you retire, you will also be asked to complete forms declaring whether you are entitled to a CPP or QPP pension, and authorizing the Superannuation Directorate to verify this information with the CPP or QPP authorities.
How is the reduction calculated?
The reduction in your public service pension is based on the number of years of pensionable service to your credit under the public service pension plan and on the average maximum pensionable earnings (AMPE) under the CPP or the QPP for the year of your retirement and the four preceding years. If the average of your pensionable earnings for the same years was below that amount, this lower average will be used to calculate the reduction. 
The formula for calculating the reduction is as follows:
.007	X	number of years 
of pensionable 
public service	X	the lower of: the AMPE 
under the CPP/QPP for 
the 5 years preceding your retirement, or the average
of your pensionable earnings
for the same period	
•	Pensionable service is that for which you have made contributions to the public service pension plan, including any service transferred from another pension plan, and prior service you have elected to count as pensionable service under the PSSA, even if you have not completed all payments in respect of that service. 
•	The maximum pensionable earnings under the CPP or QPP for the five years ending in 2000 are $35,400 (1996), $35,800 (1997), $36, 900 (1998), $37,400 (1999) and $37,600 (2000). This means that the average maximum pensionable earnings (AMPE) which can be used to reduce a pension for a person retiring in 2000, is $36,620. 
Example:
If you retire on December 31, 2000, with service extending at least as far back as January 1, 1966, the reduction at age 65 will be:
.007 X 35 X $36,620 = $8971.90 per annum or $747.65 per month.
If your average salary was lower than the AMPE, your actual average salary would be used in the calculation.
Under the old formula, the AMPE for year 2000 would have been $37,300. Your corresponding PSSA reduction would have been somewhat greater, at $9138.50 per year or $761.54 per month. 
Note:	The CPP or QPP reduction that relates to periods of part-time pensionable service is prorated. 
Benefits in the Event of a Separation or a Divorce – 
The Pension Benefits Division Act (PBDA)
If your marriage or relationship of a conjugal nature breaks down, the pension benefits you have acquired during the course of that marriage or during the period of cohabitation in a relationship of a conjugal nature may, on application, be divided according to the terms of the PBDA.
Who is eligible for a division of pension benefits?
Married persons who have separated or divorced, and persons who have lived in a relationship of a conjugal nature for a minimum of one year and have separated, are eligible.
Either party may apply for a division. To do so, the person must make a formal application, which must be accompanied by a court order or agreement between the parties providing for the division of benefits. If the application is based on an agreement, the couple must have been separated for at least one year.
What happens if the division is approved?
If the division is approved, a lump sum representing the share of the value of the benefits being divided will be transferred either to a specified kind of retirement savings vehicle chosen by the party in question, or to a life insurance company to purchase a life annuity. This lump sum can never exceed 50 per cent of the value of the benefits being divided. Your pension benefits will be reduced to reflect that division.
Can I object to the division?
Yes. You will be notified of any application made to divide your benefits, after which you can file an objection with the Minister of Public Works and Government Services Canada, provided you do so within 90 days after the notice of application was sent out. Please note that the grounds for objection are very specific. They are as follows:
•	the court order or agreement between the parties has been changed or is no longer valid;
•	the terms of the court order or agreement between the parties have been satisfied, or are being satisfied, by some other means; or
•	the court order has been appealed or the terms of the agreement between the parties are being challenged in court.
Additionally, the responsible Minister may refuse to approve a division if he or she is satisfied based on evidence submitted that it would not be just to do so.
More information
If you need more information about the PBDA, please contact your compensation office.
B. Benefit for Your Survivor
As a rule, once you have a pensionable service credit of two or more years, your survivor and children become entitled to an immediate allowance in the event of your death. This is true whether you are employed or retired at the time of your death. If you were retired, it doesn’t matter whether you were receiving an annuity or entitled to a deferred annuity.
By the PSSA amendments of 1999, the survivor benefit has been extended to include a survivor of the same sex. The same-sex survivor of a plan member who dies on or after September 14, 1999, may now be entitled to a survivor benefit. The section on “Relationship of a Conjugal Nature” explains this in greater detail.
Where the contributor has less than two years of pensionable service at the time of death, the survivor is entitled only to a return of contributions with interest. Please see the section on Supplementary Death Benefit.
Survivor Benefit
The survivor benefit is usually equal to half of your basic pension entitlement – that is, half of your pension calculated before it is reduced to reflect an annual allowance or to integrate it with the CPP or QPP. Your survivor can receive benefits under the CPP or QPP and also receive a full survivor benefit under the public service pension plan. 
If you marry after retirement, your survivor would not normally be entitled to a pension. However, you may elect, within one year of marrying or within one year of becoming entitled to payment of a deferred annuity or annual allowance, to provide your survivor with a benefit by taking a reduction in your own pension. 
In June 2000, Parliament adopted the Act to Modernize the Statutes of Canada in Relation to Benefits and Obligations. This Act amended the PSSA so that a plan member living with a person in a relationship of a conjugal nature may now elect to provide his/her survivor with a benefit. The plan member can do so by taking a reduction in his/her retirement pension. The details of this new optional benefit will be specified by regulations which are expected to come into force in 2001.
More information about this option is available from the Superannuation Directorate. (Please see Annex A for the address and phone number.)
If you should die within one year of marriage, no survivor benefit is payable unless the President of the Treasury Board is satisfied that your health at the time of marriage was such that you expected to survive for at least one year.
Divorce and Separation
If you are divorced, your former spouse will not be entitled to a survivor benefit. (See ”Benefits in the Event of a Separation or a Divorce – The Pension Benefits Division Act,” p. 13.) If you are separated from your legal spouse, but not divorced, your spouse is entitled to a survivor benefit.
Relationship of a Conjugal Nature
If you have lived in a relationship of a conjugal nature, the person with whom you have so lived may be entitled to a survivor benefit. 
The claimant must prove that he or she lived with you in a relationship of a conjugal nature for at least one year before your death. The relationship must have started before you left the Public Service and have continued up to the time of your death.
For your survivor to receive benefits under the pension plan, the claimant must be prepared to provide documented proof that a relationship of a conjugal nature actually existed. This proof normally takes the form of statutory declarations from disinterested persons who know the circumstances of the relationship, along with bills or receipts, mortgage papers, leases, joint bank accounts, credit accounts or any other relevant documents.
Where a contributor has both a legal spouse and an eligible survivor with whom he/she has lived in a relationship of a conjugal nature, the survivor’s benefit will be apportioned between them. Each survivor’s share of the benefit will be based on length of cohabitation with the contributor.
Waiver of a Survivor Benefit
Your survivor can waive entitlement to a survivor benefit if doing so results in payment of a minimum benefit or a double-rate child’s allowance (see “Allowances to Children” below). The deadline for waiver of entitlement is three months from the date of notice of entitlement. 
Note:	When a survivor waives entitlement to a survivor benefit, no benefit is payable upon the death of the plan member.
Minimum Benefit
You, your survivors or your estate or succession cannot receive, in total, less than the amount of your PSSA contributions over the years.
Circumstances where a minimum benefit is paid and how it is calculated are as follows:
•	If you had at least two years of pensionable service and if, at the time of death or later, no further benefits are payable to any survivor, an amount equal to the greater of a return of contributions plus interest, or five years of basic annuity payments, less whatever has already been paid (excluding indexing benefits), is payable to the beneficiary you have named under the Supplementary Death Benefit Plan.
•	If you have not named a beneficiary, the beneficiary does not survive you, or you did not participate in the Supplementary Death Benefit Plan, the amount is payable to your estate.
•	If the amount is less than $1000, it will be paid to a person or persons designated by the President of the Treasury Board.
Allowances to Children
A child can be your natural child, your stepchild or a child you have adopted either legally or in fact. To be eligible for an allowance, your child must normally be under age 18. Children between 18 and 25 may receive allowances if they are enrolled in a school or other educational institution full-time and have attended continuously since their 18th birthday or the date of your death, whichever is later.
Eligible children are entitled to allowances equal to one tenth of your basic pension. If you have no survivor, the children will receive allowances equal to one fifth of your basic pension.
The maximum combined amount of children’s allowances payable with respect to one contributor is four fifths of the survivor benefit or, if there is no survivor, four fifths of the contributor’s basic pension. If there are more than four children, the maximum combined amount payable may be divided among the children.
Benefits are payable to your survivor and children immediately, regardless of whether you die during employment or after your retirement.
Normally, the survivor benefit and children’s allowances are paid directly to the survivor. If the children are not living with the survivor, the children’s allowances are paid to the person responsible for their custody and control. Allowances for children over 18 are normally paid directly to them.
Submitting Personal Documents
The determination of benefits may be delayed if the Superannuation Directorate does not have the necessary documents on age and survivor status. Claimants should, therefore, make every effort to ensure that the Directorate has proof of age for themselves and their children and any certificates or other information they think would help clarify their entitlement to a survivor benefit. Claimants may submit this information to the Superannuation Directorate confidentially if they wish.
Table II below outlines the PSSA survivor benefit available under various circumstances.
Table II – Survivor Benefit
Contributor with at least two years of pensionable service*
Circumstances	Entitlement	
Survivor only	Immediate allowance
(.01 X average salary X years of pensionable service)	
Survivor and children	Survivor: immediate allowance
Children: immediate allowance for each
(.02 X average salary X years of pensionable service X 0.1)
Total of children’s allowances not to exceed four fifths of survivor allowance.	
Children only (no survivor)	(.02 X average salary X years of pensionable service X 0.2)
Total not to exceed four fifths of contributor’s basic pension	
No eligible survivor or children	Greater of return of contributions with interest or amount equal to five years’ annuity payments minus any benefits already paid to or with respect to the contributor.
When there is no eligible survivor or children, amounts are paid either to a beneficiary named under the Supplementary Death Benefit Plan or to the estate.	
*	In cases where the contributor has less than two years of pensionable service at the time of death, the survivor is entitled only to a return of contributions with interest. Please see the following section on Supplementary Death Benefits.
C. Supplementary Death Benefit
The Supplementary Death Benefit Plan, which is Part II of the PSSA, provides a form of decreasing term life insurance protection designed to cover you and your beneficiary during the years you are building up your pension. This plan applies to almost all public service employees who contribute to the Public Sector Pension Fund.
Amendments of 1999
As of September 14, 1999, the PSSA Supplementary Death Benefit Plan was amended as follows:
•	Increase in paid-up benefit: The paid-up benefit available to participants at age 65 has increased from $5,000 to $10,000. 
•	Extension of paid-up benefit: The paid-up benefit has been extended to elective participants who retired on or after April 1, 1995, with an entitlement to an annual allowance within 30 days of ceasing to be employed. 
•	Delay of coverage reduction: The 10 per cent annual coverage reduction that formerly began at age 61 has been delayed until age 66. In effect, this amendment extends full coverage by five years and prolongs the period of coverage to age 75. 
•	Premium rate reduction: The premium rate for participants has been reduced by 25 per cent from $0.20 to $0.15 per month for each $1,000 of coverage.
Coverage
The plan provides a benefit equal to twice your annual salary. If that amount is not a multiple of $1,000, your benefit coverage is adjusted to the next highest multiple of $1,000. The amount of your benefit automatically goes up as your salary goes up.
The benefit declines by 10 per cent for each year beyond the age of 65. For example, if you are covered for $60,000 at 65 and your salary does not change, your coverage declines to $54,000 at age 66, $48,000 at 67, and so on. 
The yearly reduction will take effect on April 1 or October 1, whichever date comes first after your birthday.
With the reduction rate described above, benefits would ordinarily disappear when you are 75, but for the following two special provisions. 
Participants still employed, or those who cease to be employed and are entitled to an immediate annuity or an annual allowance payable within 30 days after they cease to be employed, are entitled to a paid-up coverage of $10,000 when they reach age 65. This means that the participant, whatever his or her actual coverage at 65, has $10,000 of that coverage without contribution. This paid-up benefit is retained for life at no cost. 
If a participant dies after reaching age 65 while still employed in the Public Service, the minimum coverage is the greater of $10,000 or one third of the person’s annual salary. If one third of the salary is not a multiple of $1,000, it will be adjusted to the next higher multiple of $1,000 in order to determine this benefit.
Cost
As of October 1, 1999, contributions are at the rate of 15 cents a month for every $1,000 of coverage. This means that if you earn $31,760 a year, you would contribute $9.60 a month or $115.20 a year and would be covered for $64,000. After you reach age 66, your contributions will go down as your coverage declines.
There is no maximum contribution period under this plan, nor is there provision for a return of contributions. Your contributions are deducted from your cheque each month. If you are on leave of absence you will still contribute and be covered. Your compensation office will tell you how to remit your contributions.
The government contributes one twelfth of the cost of the benefits paid in respect of deceased employees and pensioners to the Supplementary Death Benefit (SDB) Account and pays the full cost of the $10,000 paid-up benefit.
Continuity of Coverage
What happens to my coverage when I leave the Public Service?
If you leave the Public Service, you may retain this benefit if you wish. You must have at least two years of service without substantial interruption or have participated under the Supplementary Death Benefit Plan without interruption for two years or more. You must also elect to retain the benefit in the year before leaving the Public Service, or within 30 days after leaving. You can use a period of time in the Canadian Forces or as a regular Forces participant under Part II of the Canadian Forces Superannuation Act to make up the two‑year period. If you decide to retain your benefit, you will be covered for the exact amount for which you are covered at the time you leave the Public Service, subject to the reductions after you reach 65. 
Please note that, if you leave the Public Service with an entitlement to an immediate annuity, or with an annual allowance payable within 30 days of ceasing to be employed, you are deemed to have elected to continue your participation in the Supplementary Death Benefit Plan. In other words, you don’t have to take any action; the required contributions will be deducted automatically from your monthly pension. If you wish, you may cancel your coverage or reduce it to $10,000. You will receive information on how to do this when you retire. (Please see the section ”Cancelling coverage,” below.)
This automatic coverage does not apply to those entitled to an annual allowance payable more than 30 days after ceasing to be employed. Please see the section on the next page about making an election to continue coverage.
What does my coverage cost after I leave the Public Service?
The cost will depend on the type of pension benefit you receive. If you leave with an immediate annuity, an immediate annual allowance payable within 30 days after you leave, or with a disability annuity at any age, the rate is the same as if you had stayed in the Public Service. If you are 65 or over when you leave, you can keep only the reduced coverage you have at that date and your coverage and contributions will continue to decline yearly until only the paid-up portion of $10,000 remains, if applicable.
If you leave the Public Service with a pension benefit other than an immediate annuity or a disability annuity, or an annual allowance payable within 30 days after you leave, you will have to make an election to continue coverage, as described below. In this case, you will also have to contribute at an increased rate if you wish to retain your protection. Your compensation office can tell you about these commercial rates, which vary according to your age at the time you leave the Public Service. 
In effect, with commercial rate coverage, you have to pay the full cost of your coverage without any contribution from the government. For example, a person leaving the Public Service at age 50 with coverage of $80,000 (final salary of $40,000) would have to pay approximately $964.00 a year to retain this protection. In addition, no paid-up coverage is provided, and coverage is reduced to zero at age 75.
Election to continue coverage
If you have to make a formal election to continue your coverage under the Supplementary Death Benefit Plan, you must do so in writing on the prescribed form, which you can obtain from your compensation office. You must sign the form and have it delivered or send it by mail to the Superannuation Directorate within the time prescribed (from one year before, to 30 days after, the date you leave the Public Service). If you are entitled to a deferred annual allowance, a deferred annuity, or a transfer value, your first payment must accompany the form. The Superannuation Directorate will check your election and issue a document to confirm that you are an elective participant.
You will be asked for proof of age if you have not already submitted it. Those who re‑enter the Public Service will cease to be elective participants if they again become contributors to the PSSA, and their contributions will be adjusted accordingly.
If you receive an immediate annuity upon retiring, or an annual allowance within 30 days of ceasing to be employed, you may elect at any time to reduce your SDB coverage to $10,000. In such a case, you will make contributions on that amount only until you reach age 65, after which the $10,000 coverage is free. You must make an election to reduce coverage in this way on a form available from the Superannuation Directorate. Please note that such an election is irrevocable.
Cancelling coverage
Action taken by a plan member to cancel participation in the Supplementary Death Benefit plan will be considered an irrevocable election. You should note that once you have chosen to cancel your coverage, this coverage can never be reinstated. Participants eligible for $10,000 paid‑up coverage at age 65 should consider reducing coverage to $10,000 as an alternative to full cancellation of coverage.
How do I pay for my coverage after I leave the Public Service?
If you leave with an immediate annuity or an immediate annual allowance and become an elective participant, your contributions will be deducted automatically from your pension cheque each month. 
In all other cases, you should send the full contribution for the first year of coverage when you send in the necessary documents to make an election. Make the cheque, money order or bank draft payable to the Receiver General for Canada. In subsequent years, you must, as an elective participant, contribute within the time prescribed. If the Superannuation Directorate does not receive your contributions within 30 days from the due date, your coverage ceases. The Superannuation Directorate will provide instructions on how to remit the required contributions.
Once you begin receiving your deferred annuity or deferred annual allowance, your contributions will be deducted from your monthly pension cheque and you no longer have to send contributions to the Superannuation Directorate.
Beneficiaries
Who receives the Supplementary Death Benefit?
As a participant in the Supplementary Death Benefit Plan, you may designate one of the following as your beneficiary:
•	any person 18 or more years of age at the time of designation;
•	your estate or succession;
•	any charitable or benevolent organization or institution; or
•	any educational or religious organization or institution that is supported by donations.
Your compensation office will supply you with the form to name a beneficiary. The form must be signed, dated, witnessed and submitted to your compensation office, which will then send it to the Superannuation Directorate for your file.
You may, at any time, change your beneficiary by completing a new designation form and submitting it to your compensation office or the Superannuation Directorate.
Note:	Please remember that any minimum benefit payable under Part I of the PSSA will be paid to the beneficiary you have designated under the Supplementary Death Benefit Plan, if you remain an SDB participant and your beneficiary survives you.
How is the benefit paid?
Normally, the supplementary death benefit will be paid directly to the beneficiary you have named if your beneficiary survives you. If you have not named a beneficiary, it will be paid to your estate or succession.
However, there are some exceptions. For example, a male employee who was married and was a Supplementary Death Benefit Plan participant on December 19, 1975, who did not cease participation and who did not name a beneficiary before his death, will have the death benefit paid to his widow, provided that the marriage took place on or before December 19, 1975. If no widow survives, the death benefit is payable to his estate.
Under certain circumstances, all or a portion of the death benefit can be applied directly against the expenses for the maintenance, medical care or funeral of a participant. For example, part of the death benefit could be used to pay a funeral bill, or to reimburse a person or group who has already paid the funeral expenses. The expenses must be “reasonable.” Please note that this provision is intended primarily to cover difficult situations, such as those where there is no estate or one with insufficient assets, or where a long delay in settling the estate is expected. 

Part II – 
Contributions and Service
A. Contributions for Current Service
PSSA Contribution Rates
What is the rate of contribution for current service?
Because of integration of the public service pension plan with CPP and QPP, employees in effect contribute to the public service plan at two rates: 
•	4 per cent on salary up to the maximum covered by CPP/QPP 
•	7.5 per cent on salary above the maximum covered by CPP/QPP
Basically, CPP/QPP covers average annual salary, which for the year 2000 is $37,600. In 2000, therefore, you contribute to the public service plan at rates of 4 per cent of your salary below, and 7.5 per cent of your salary above, $37,600. Your public service contribution rate covers both basic pension and pension indexing. 
Sometimes public service employees receive other payments, such as allowances, in addition to their basic salary. Some of these payments constitute salary for pension purposes and some do not. Your compensation office can tell you whether you must contribute on any such allowance. 
Payments under the PSSA for current service and, in some cases, for prior elective service are deductible for income tax purposes. To determine the extent of deductibility, consult your Canada Customs and Revenue Agency office.
How have the latest PSSA amendments affected contribution rates?
The 1999 amendments to the PSSA have affected contribution rates as follows: 
•	Employee contributions to the public service pension plan will be frozen at the above-noted 1999 rates for at least four years, from 2000 through 2003.
•	In 2004, the Treasury Board will review PSSA contribution rates and adjust them as necessary.
•	If increases to PSSA employee contribution rates are deemed necessary after 2003, no increase will exceed 0.4 per cent (i.e., four tenths of one per cent) of salary in any single year. 
•	In any event, employee contribution rates will not increase past the point where employees are paying 40 per cent of current service costs for the public service pension plan. (A 40 per-cent share of costs is the historical average for plan members.) 
•	From 2000 on, contribution rates for the CPP/QPP will be set independently from the employee contribution rates for the public service pension plan. This change in effect removes the former cap of 7.5 per cent on your total pension contributions. In future, the further scheduled increases in CPP/QPP contribution rates will affect you and other public service plan members in the same way as they affect all other Canadians. CPP/QPP contribution rates are expected to stabilize after 2003. 
For a comparative view of your pension contribution rates from 2000 through 2003, see Table III below. 
Table III – Contribution Rates for PSSA and CPP/QPP, 
2000–2003
Contribution Rates	
Year	Employee PSSA
contribution on
earnings above
CPP/QPP maximum	Employee PSSA
contribution on
earnings below
CPP/QPP maximum	Employee CPP/QPP
contribution on
earnings up to
CPP/QPP maximum	
2000	7.5%	4%	3.9%	
2001	7.5%	4%	4.3%	
2002	7.5%	4%	4.7%	
2003	7.5%	4%	4.95%	
Notes:	1.	In 2000, the maximum salary covered by CPP/QPP is $37,600. The maximum may vary from year to year. 
	2.	In 2003, as a result of CPP/QPP rate increases, a public service employee earning $30,000 a year will be paying about $265 a year more than his or her total pension contributions in 1999. For an employee earning about $40,000 or more, the increase in total contributions will amount to about $425 a year in 2003.
Is there a maximum period of contribution?
Yes, the maximum period for which you may contribute at the full rate is 35 years, including any elective service you may have to your credit. In addition, if you are entitled to, or have been granted, a benefit under certain other federal government plans, such as the Canadian Forces pension plan or the Royal Canadian Mounted Police pension plan, you will stop contributing at the normal (integrated) rate under the public service plan when your combined periods of service total 35 years. However, even after you have completed 35 years, you will continue to contribute one per cent of your salary for indexing benefits as long as you are employed.
You must also stop contributing to the plan on January 1 following the year that you reach age 69. Salary and service occurring after you stop contributing will not be included in your pension benefit.
Contributions on Leave Without Pay
Do I contribute for periods of leave without pay?
Ordinarily, contributions for periods of leave without pay are deducted from your salary, in equal instalments, over a period equal to twice the period of your absence, when you return to work.
You may also choose to pay the whole amount in a lump sum within 30 days of the date of your return to work. 
However, if you are on extended leave to serve on loan with a public service union, the government of another country, or an international organization, you must pay your contributions in advance – either annually, semi-annually or quarterly – to the Superannuation Directorate (see address in Annex A) . If your leave without pay falls into any of these categories, consult your compensation office about the amounts required and the method of payment.
What do I contribute for periods of leave without pay?
If you go on authorized leave of absence without pay for less than three months, you will still contribute at the single rate (the employee contribution only) and the service will be credited to you. For periods of more than three months, you will contribute at the single rate for the first three months of the leave period and at either the single rate or the double rate (both the employee and employer-matching contributions) for the balance of the leave, depending on the type of leave. For these longer periods, you may choose not to contribute after the first three months, in which case the service will not be credited to you. An election not to contribute for leave without pay can only be made during the period beginning three months after the leave commenced and ending three months following return to duty. If you elect not to count leave without pay, you may still choose to count it later on in your employment by electing to do so, but the costs will differ. See your compensation office for more information.
Are there limits on how much leave without pay 
may be counted for pension purposes?
Yes. Effective January 1, 1996, as a result of Income Tax Act requirements for registered pension plans, the PSSA restricts the amount of pensionable leave without pay, other than sick leave without pay, to a career maximum of five years. The government will track any leave without pay that you take on or after January 1, 1996, to ensure that you don’t exceed the five‑year maximum.
An exception to the five‑year rule relates to periods of leave without pay for parenting reasons. In addition to the maximum of five years of unpaid leave of absence countable for pension purposes, plan members may also be credited under the plan with up to three more years of leave without pay for parenting purposes. Only parenting leave without pay that falls in the year following the birth or adoption of a child may be included for purposes of computing the additional three‑year limit.
Another exception to the five‑year rule is that of “on-loan” situations, where the services of a public service employee are loaned out to another employer by formal agreement between the two employers. For example, the restriction on the amount of pensionable leave without pay does not apply in cases where an employee is on loan serving with an international organization or as a full-time paid official of a bargaining agent representing public service employees. When considering serving with another employer, you should consult your compensation officer to determine the period of leave without pay you are allowed under certain circumstances. 
B. Elective Service
Current vs. Elective Service
You acquire pensionable service on a current or an elective basis.
Current service is service for which you contribute to the superannuation plan each day during your employment.
Elective service is any period of employment, either in the Public Service or with some other employer that occurred before you became a contributor to the superannuation plan.
It also includes active war service and certain types of civilian war service. As the term implies, you must make a special election in order to count elective service towards your pension.
When do I start to build up current service?
If you are employed in the Public Service and work an average of at least 12 hours a week, you may start to build up pension credits as soon as you are appointed. In some instances, you must be employed continuously for up to six months before you may start to contribute. All of the service for which you contribute will be included in your pensionable service credits at retirement.
The term “Public Service” covers employees of all federal government departments. It also includes employees working for the following organizations: 
•	the Senate, the House of Commons or the Library of Parliament;
•	certain agencies and corporations that have been designated as part of the Public Service for pension purposes; and 
•	certain agencies participating in the public service pension plan under the PSSA by virtue of their own statutes. 
The following groups do not contribute to the Public Sector Pension Fund:
•	part-time employees working an average of less than 12 hours a week;
•	part-time employees who have been employed in the Public Service since July 3, 1994, and who have not chosen to contribute within the prescribed period;
•	employees locally engaged outside Canada; 
•	employees covered by another Canadian government pension plan (notably, the pension plans under the Canadian Forces Superannuation Act and the Royal Canadian Mounted Police Superannuation Act);
•	employees working on an “as-required” basis; and
•	seasonal employees and employees appointed for a term of six months or less, until they have completed six months of substantially continuous service.
Some employees, such as sessional employees and employees of certain commissions, must meet certain conditions and be specifically designated as contributors.
How can I benefit the most from my pension plan?
All pension benefits payable under the plan relate directly to service and salaries. As the number of years of pensionable service to your credit increases and you reach higher levels of salary, the benefits that you and your family can expect to receive increase accordingly. This is so even when you cease contributing at the full rate after 35 years of pensionable service. Although your contributions drop to one per cent, the salary you earn after that time will be used to calculate the average annual salary for pension purposes, if this is to your advantage.
It is important that you know how to increase your pensionable service credits and how much it would cost you to do so.
Each continuing year of employment in the Public Service for which you make ordinary contributions is a year of pensionable service. In addition, if you had one or more periods of employment, either in the Public Service or with another employer, before becoming a contributor under the Act, you may be able to obtain credit for that service on an elective basis.
Such periods of prior service, if they can be counted under the Act, are known as elective service. As the term implies, they are periods of service for which you may make a special election to count them as periods of pensionable service. You may make an election at any time while you are employed in the Public Service and contributing to the Public Sector Pension Fund. Costs and other requirements may vary, depending on when you make the election.
Advantages of electing for prior service include:
•	increased service, which increases your pension;
•	increased protection for your beneficiaries;
•	the possible completion of 35 years of service at an earlier date; and
•	the possibility of retiring earlier.
The main types of elective service, the method to determine the cost of each type and the conditions to be met are covered in the following sections of this booklet.
Types of Elective Service
You may make an election to obtain credit for several types of prior service, as discussed below.
Prior public service
You may elect to count virtually any prior full-time service in the Public Service, including periods of leave without pay during contributory service that you previously chose not to count. 
You may also elect to count prior part-time service that occurred after December 31, 1980, as long as you were engaged to work an average of at least 12 hours a week.
Service with the Canadian Forces or the Royal Canadian Mounted Police
You may elect to count prior service under the Canadian Forces Superannuation Act and/or the Royal Canadian Mounted Police Superannuation Act, subject to the conditions described below.
Service as a member of Parliament
You may elect to count prior service during which you were subject to the Members of Parliament Retiring Allowances Act. The conditions for counting this type of service are also described below.
Pensionable employment outside the Public Service
If you previously worked for any employer with an approved pension plan, or a pension plan that can be approved for PSSA purposes, you may be eligible to count any part of that employment during which you were subject to the pension plan. However, the pension plan must also have been registered for Canadian Income Tax Act purposes when the service occurred. To be eligible, this pensionable employment must have taken place immediately before your public service employment. If the employment ended more than six months but less than two years before you entered the Public Service, special consideration is required to determine whether the service falls into this category.
Other types of elective service
You may be able to elect for a few other types of prior service, such as war service. You should consult your compensation office if you have any questions about whether a period of prior service with any employer is elective.
Calculation of Elective Service
How much will I have to pay for elective service?
The formula used to determine the cost of a period of elective service is, in principle, the same as the one applied to ordinary current service. You are considered to have received a certain salary during each year of elective service and a certain contribution rate is prescribed for each year. Your contribution rate may be single or double, depending on whether the type of service requires you to pay both employee and employer-matching contributions. The final lump-sum cost normally includes four per cent simple interest, calculated from the middle of each fiscal year of the elective service to the first day of the month in which you make the election.
In addition, the cost of any election for service occurring after April 1, 1970 includes contributions for indexing benefits at a single or double rate, depending on the type of service.
Normal elections
The following paragraphs apply if you forward your election within one year of being notified that you are a contributor. This is called a normal election.
Prior public service
•	For any portion of your prior public service that occurred before January 1, 1966, the rate of contribution is 6.5 per cent for male contributors and 5 per cent for female contributors. 
•	For service between January 1, 1966, and March 31, 1970, the rate is 6.5 per cent for both male and female contributors, adjusted to take into account the rate of CPP/QPP contributions payable during those years. 
•	Service from April 1, 1970, to December 31, 1976, is costed at a rate of 7 per cent, adjusted to take account of CPP/QPP contributions that would have been payable during those years. 
•	For service between January 1, 1977 and December 31, 1999, the contribution rate is 7.5 per cent of salary less the CPP/QPP contributions that would have been payable. 
•	For service after December 31, 1999, the contribution rate is 4 per cent on salary up to the maximum covered by CPP/QPP and 7.5 per cent on salary above the maximum covered by CPP/QPP. In 2000, the maximum salary covered by CPP/QPP is $37,600. 
During each year of the elective service, the salary rate on which the calculation is based is your salary rate when you last became a contributor, provided you make your election within a year of the date on which you are notified that you have become a contributor under the PSSA. Four per cent simple interest is also added, calculated from the mid-point of each fiscal year of elective service to the first of the month in which you make the election.
Pensionable service with the Canadian Forces 
and the Royal Canadian Mounted Police
The cost of paying for service of this kind depends on your status under the Act to which you were previously subject – that is, the Canadian Forces Superannuation Act, the Defence Services Pension Continuation Act, the Royal Canadian Mounted Police Pension Continuation Act or the Royal Canadian Mounted Police Superannuation Act. 
If you are entitled to an annuity under one of these Acts, you may surrender your pension entitlement under that Act and elect to combine your previous service with your service under the PSSA, so that all of your service is subject to the terms of the PSSA. However, you must make this election before leaving the Public Service. You must also pass a medical examination, as explained below.
You must also repay to the former plan all pensions received after your first year as a contributor under the PSSA. Furthermore, you must continue to pay any amount you may still owe under the former plan.
Note:	Certain people are entitled to pensions under the above-named Acts even though they did not contribute. If you are in this category and surrender your pension, in addition to repaying any pension benefits received, you must also contribute for the service in order to count it under the PSSA. The cost is based on your salary rate when you most recently became a contributor under the PSSA; interest is added from the time the service occurred until the date you made the election under the PSSA.
The rates of contribution that apply to prior public service are used in this calculation. See page 29 of this booklet.
If you are not entitled to a pension or similar benefit under one of these Acts and wish to count the service under the PSSA, you may also do so. The cost of the service will depend on whether you received any lump-sum payment under the other Act.
If you are in any of these categories, you should seek more information from your compensation office.
Service under the Members of Parliament Retiring Allowances Act
The cost of counting prior service under this plan depends on whether you became entitled to a pension or a withdrawal allowance (lump-sum payment) on ceasing to be subject to the plan.
If you are entitled to a pension, you may elect to transfer your service to the PSSA at any time before you leave the Public Service. To do this, you must surrender the pension and repay, with interest at four per cent per annum, any pension you received after your first year as a PSSA contributor. You must also pay any contributions still owing under the Members of Parliament (MPs) plan and pass a medical examination.
If you received a lump-sum payment under the MPs plan, you will contribute under the PSSA at the single rate, based on your salary when you most recently became a PSSA contributor. In this case, you must make your election within one year of becoming a PSSA contributor, and pay interest.
Pensionable employment outside the Public Service
For any period of pensionable employment with a previous employer outside the Public Service, you are considered to have received a salary equal to your salary on most recently becoming a contributor under the PSSA, if you make the election within one year of becoming a contributor. You have to contribute at the double rate, as follows: 
•	13 per cent for male contributors and 10 per cent for female contributors for any service before January 1, 1966;
•	(6.5 per cent less the CPP/QPP rate) times two for both male and female contributors for any service between January 1, 1966, and March 31, 1970;
•	(7 per cent less the CPP/QPP rate) times two for any service between April 1, 1970, and December 31, 1976;
•	(7.5 per cent less the CPP/QPP rate) times two for any service between January 1, 1977, and December 31, 1999;
•	8 per cent on salary up to the maximum covered by CPP/QPP and 15 per cent on salary above the maximum covered by CPP/QPP for service after December 31, 1999. In 2000, the maximum salary covered by CPP/QPP is $37,600.
Sometimes contributions paid into a registered retirement savings plan or registered pension plan can be transferred directly to the Public Sector Pension Fund with no deduction of income tax at source. This is a point you should look into because contributions transferred this way would be applied directly against the cost of your election. 
Note:	Please keep in mind that you must surrender any annuity entitlement you may have with another employer, if the other employer paid for it in whole or in part, before you can elect for the service under the PSSA. You should remember too that, if you leave the Public Service voluntarily with less than two years of continuous employment, you are entitled only to a return of contributions with interest.
Consequently, if you intend to leave within that period, you should consider whether it is in your interest to surrender the entitlement under the outside plan. This provision does not apply if your separation from the Public Service is involuntary. You should, of course, ensure that the service in question can be counted under the PSSA before you surrender the entitlement. Check this with your compensation office.
Late elections
If you do not make an election within one year of becoming a PSSA contributor, you may still be able to make a late election. The contribution rates used to determine the cost remain the same, but the salary rate used is the salary payable to you on the date of the election. In many cases, this could cost you substantially more.
The higher charge reflects the additional value of the benefits you may expect to receive because of salary increases. As discussed later in this booklet, a late election can only be accepted if you have passed a medical examination. You must forward an application for late election to the appropriate address within one month of the date you signed the election form.
Elections for periods of leave without pay
The cost of electing for periods of authorized leave without pay that you chose not to count on return to work will be based on your salary at the time of making the election. They will be at the single or double rate, depending on the type of leave. Interest will be added in the same way as it is for other elective service; that is, four per cent simple interest from the date of the service to the month of election. 
Medical Examinations
With few exceptions, if you elect to purchase prior service you will have to undergo a medical examination. If you make a late election, you must pass a medical examination. If you don’t pass, the election is void.
For a normal election – that is, one you make within one year of becoming a PSSA contributor – you may not need a medical examination. In other circumstances, the election can continue in force even if you fail the examination. You should discuss these exceptional circumstances with your compensation office.
If, as a former member of the Canadian Forces or the Royal Canadian Mounted Police, or as a former member of Parliament, you elect to surrender an annuity entitlement under the Canadian Forces Superannuation Act, the Royal Canadian Mounted Police Superannuation Act or the Members of Parliament Retiring Allowances Act in order to count the service under the PSSA, you must pass a medical examination when you make that election. 
You must undergo the examination not more than 90 days before or six months after the date of the election. 
Cost Estimates
Before electing, you should obtain an estimate of what your prior service will cost. Contact your compensation office shortly after you become a contributor. 
The office will give you whatever information you need and an estimate of the cost well before the expiry date. However, if your expiry date is approaching and your estimate has been delayed for some reason, you will have to consider electing without an estimate. The PSSA doesn’t require an estimate, so failure to receive one won’t affect your expiry date for making a normal election.
How to Make an Election
If you are making a normal election, you must complete a special election form and send it to the address shown on the election form before the normal election period expires. Action will be taken to start deductions, where necessary, and then the election will be forwarded to the Superannuation Directorate, Public Works and Government Services Canada, for verification. 
If you are making a late election, you must complete the election form and forward it within one month of the date on which you signed it. 
For either a normal or a late election, you must complete the election form while still employed as a PSSA contributor. Any election not forwarded within the prescribed time will be invalid. 
How to Pay for an Election
You may pay for prior service in a lump sum or by instalments. As the instalment method is more costly than a lump-sum payment, you should compare the two totals before deciding. The instalment method costs more because the monthly instalment includes a mortality charge to cover the cost of insurance and interest on the unpaid balance. In the event of your death, neither your estate nor your survivor have to make any more payments as the cost of this service is considered to be paid in full. 
Special circumstances and elective service payments
As a general rule, additional interest is charged on any overdue instalments. Accordingly, if you are not paying through salary deductions, you should send in the instalments on time. If you change departments, check to make sure the instalments continue to be deducted from your salary. If you retire on pension before paying all your instalments for prior service, your pension will be calculated to include all your elective service, but the unpaid instalments will be deducted monthly from your pension benefit. If, on leaving the Public Service, you choose to receive a deferred annuity at age 60, you must remit your instalments regularly between the time you leave and the time your pension starts.
If you intend to opt for a transfer value, you must pay the remaining cost of any elective service you wish to have included in the benefit before you opt. 
Can I revoke an election?
You may revoke an election only in certain unusual situations, so you should consider any election carefully. Even if a revocation is approved, you may be charged a subsistence fee for the insurance that resulted from the election while the election was in force. Normally, if a person revokes an election and later wishes to count either part or all of the service that the revoked election covered, the second election is treated as a late election.
Some General Points About Elections
An election may be for all or part of a period of prior service. If it is for only a part, it usually must be for the part that occurred most recently. Your compensation office can provide you with information about exceptions to this requirement. You may extend your election to cover additional periods without penalty by completing another election within the normal one‑year time limit.
You may not elect for service that is based in whole or in part on employer contributions and is counted for pension purposes under another employer’s pension plan, unless you lose or surrender the pension or benefit entitlement under the other plan.
Under Income Tax Act rules for registered pension plans, a plan may not recognize past periods of elective service that occurred after December 31, 1989 for pension purposes unless income tax officials certify a past service pension adjustment (PSPA) for that service.
If you do not have enough room in your registered retirement savings plan (RRSP) to permit the certification of a PSPA, your election will be declared void and any elective service payments you may have made will be refunded to you. As there may be other tax implications to making an election, you may wish to check with your Canada Customs and Revenue Agency office. In particular, you should determine to what extent your elective contributions will be deductible for tax purposes. 
Pension Transfer Agreements
The PSSA permits transfer agreements providing portability of accrued pension benefits and service between the Government of Canada and eligible employers. PSSA amendments of 1996 set new rules for pension transfer agreements.
Transfer agreements under the old rules 
Existing agreements negotiated under the old rules will remain in force only until October 15, 2000. The Government of Canada has negotiated more than 300 such agreements with other levels of government, universities, health care organizations and private employers.
Employers who do not want their agreements to lapse must renegotiate them under the new rules by that date. 
The older agreements, known as Reciprocal Transfer Agreements, provided for the transfer of employee and employer pension contributions along with the associated interest. Persons seeking transfers under the older agreements are subject to the following eligibility requirements, among others:
•	Generally, there must be no more than a six-month break in service between employers.
•	There must be no return of contributions made or other benefit received in respect of the period of pensionable service with the prior employer.
•	A medical examination must be undergone and passed.
•	The request for the pension transfer must be made within one year of either the person becoming a PSSA contributor or the date of the agreement, whichever is later.
Transfer agreements under the new rules 
Agreements negotiated under the new rules are to be known simply as Pension Transfer Agreements (PTAs). The new PTAs provide for the transfer of the actuarial value of accrued pension benefits.
The new rules for transfer agreements also include several changes in eligibility requirements, notably the following:
•	There is no longer any limitation on breaks in service between employers.
•	Ordinarily, the pension plan into which the transfer is to be made must have at least 10 members.
•	The medical requirement is less stringent.
More information
For further information on old or new transfer agreements and their eligibility requirements, please contact your compensation office. 
Note:	Please see Annex B of this booklet for the list of Pension Transfer Agreements.

Part III – Funding of 
the Public Service Pension Plan
Under the 1999 amendments to the PSSA, a new funding arrangement for the pension plan took effect on April 1, 2000.
Funding Before April 1, 2000
Employer and employee contributions to the public service pension plan have been held in the Superannuation Account forming part of the accounts of Canada. Since 1969, the entire balance of the Superannuation Account has been credited with interest as if it had been invested in Government of Canada long-term bonds. No amounts have ever been invested in other vehicles available in financial markets (e.g., stocks). 
Contributions made before April 1, 2000, will remain in the existing Superannuation Account and will continue to be credited with interest as if invested in Government of Canada bonds. Pension benefits for plan members’ service before April 1, 2000 will continue to be drawn from the existing account.
There is also a provision that allows the investment of contributions that were made in respect of service prior to April 1, 2000. This can only be done at the discretion of the Minister of Finance.
Funding After April 1, 2000
As of April 1, 2000, new contributions under the public service pension plan by employees and the employer will be deposited into a newly created Public Sector Pension Fund. A new Public Sector Pension Investment Board, operating independently of the government and plan members, will invest these new contributions in the financial markets. It is expected that, over the long term, market investment of contributions will generate higher returns.
Cost-Sharing
The employer and the employees have always shared the costs of the public service pension plan. Historically, the government has assumed a larger share of costs – approximately 60 per cent on average. Since 1988, owing to integration of employee contributions with the CPP/QPP, the cost‑sharing ratio between the government and the plan members has gradually widened from the historical 60/40 to more than 70/30 in 1999. In other words, the government is now paying more than 70 per cent of the current service costs of the public service pension plan.
Under the PSSA amendments of 1999, the Treasury Board has authority to set employee contribution rates as needed for the public service pension plan after the year 2003. There are two significant limitations on this authority:
•	No increase in employee contribution rates may exceed 0.4 per cent (i.e., four tenths of one per cent) of a plan member’s salary in any single year.
•	Employee contribution rates will not increase past the point where the employees are paying more than 40 per cent of the current service costs of the public service pension plan. 
From 2000 through 2003, employee contribution rates will remain frozen at 1999 levels. During that time, the government will make up the difference between the full cost of pensions being earned and employee contributions. In the year 2000, the government pays more than 70 per cent of current service costs. 
Deficit and Surplus Management
As the sponsor of the PSSA, the federal government has always assumed responsibility for the cost of benefits that exceed the regular contributions made by employees and the government. Thus the government made up any deficits that occurred when actual plan experience differed from the actuarial assumptions used to determine the necessary government contributions. For instance, if the rate of interest actually earned was lower than the predicted rate, the federal government contributed additional amounts to ensure benefits were fully funded. Under the PSSA amendments of 1999, the government will continue to be sole sponsor of the public service pension plan. Accordingly, it will also continue to assume sole responsibility for any deficits that may occur in the new Pension Fund. 
Surpluses may also arise when certain factors such as investment returns and inflation produce more favourable results than anticipated by the plan’s actuaries. Mechanisms for managing surpluses were introduced as part of the 1999 amendments to the PSSA. When surpluses arise in the future, the amended legislation will allow contribution holidays for the employer, or for both the employer and the employees, as well as withdrawals from the new Public Sector Pension Fund. These mechanisms are the same as those used by other pension plans, both in the public and private sector. If a surplus arises in the future, the Treasury Board ministers will decide on the most appropriate mechanisms to be used, depending on the circumstances prevailing at the time. The legislation also provides mechanisms for managing the surplus in the existing Superannuation Account by allowing the withdrawal of amounts from this account over periods of up to 15 years. 
Because surpluses are determined after taking into account prudent actuarial estimates of future liabilities relative to the main factors affecting those liabilities, the application of mechanisms to manage occasional surpluses does not jeopardize the future benefits of contributors.

Annex A – List of Important Addresses and Phone Numbers
1.	My compensation officer		
	My financial advisor		
2.	Superannuation Directorate	Public Works and Government Services Canada
P.O. Box 5010
Moncton, N.B. 
E1C 8Z5
1-800-561-7930 	
3.	Treasury Board Secretariat	http://publiservice.tbs-sct.gc.ca/hr_connexions_rh
http://www.tbs-sct.gc.ca/hr_connexions_rh
http://publiservice.tbs-sct.gc.ca
http://www.tbs-sct.gc.ca	
4.	Canada Pension Plan and
Old Age Security	Human Resources Development Canada
Income Security Programs
1-800-277-9914
TDD/TYY: 1-800-255-4786	
5.	Quebec Pension Plan	P.O. Box 5200
Quebec (Quebec)
G1K 7S9
1-800-463-5185
TDD/TYY: 1-800-603-3540
http://www.rrq.gouv.qc.ca	
6.	Canada Customs and
Revenue Agency	See the Government pages of your 
local telephone directory.	

Annex B – Pension Transfer Agreements
List of employers and effective dates
Name of Employer	Effective Date	
Ville de St. Hubert	July 8, 1999	
Public Service Alliance of Canada	July 19, 1999	
City of Fredericton	December 20, 1999	
Journal de Montréal	December 21, 1999	
Ontario Public Service Employees' Union	January 19, 2000	
Province of Nova Scotia	June 1, 2000	
Confédération des syndicats nationaux (CSN)	July 26, 2000	
The following Fishery Commissions: 
•	Great Lakes Fishery Commission
•	Inter-American Tropical Tuna Commission 
•	International Pacific Fisheries Commission 
•	International Pacific Halibut Commission
•	Northwest Atlantic Fisheries Organization
•	Pacific Salmon Commission	October 15, 2000	
Province of Manitoba (Civil Service Superannuation Board) 	September 15, 2000 	
Canada Mortgage and Housing Corporation 	December 20, 2000 	
Metropolitan Life Insurance Company 	March 3, 2001 	
The Co-operative Superannuation Society	March 3, 2001	
The Native Benefits Plan Pension Committee	May 10, 2001	
Royal College of Physicians and Surgeons of Canada	May 11, 2001	
City of Saint John	May 16, 2001	
Société de transport de la Communauté urbaine de Québec	June 5, 2001	
Province of British Columbia (Board of Trustees for the British Columbia Public Service Pension Plan) 	June 14, 2001	
Province of British Columbia (Board of Trustees for the British Columbia Municipal Pension Plan) 	June 14, 2001	
Province of British Columbia (Board of Trustees for the British Columbia Teachers’ Pension Plan) 	June 14, 2001	
Province of British Columbia (Board of Trustees for the British Columbia College Pension Plan) 	June 14, 2001	
Province of Newfoundland and Labrador	June 23, 2001	
Province of Ontario (Ontario Pension Board)	July 2, 2001	
Province of Prince Edward Island	July 2, 2001	
Northwest Territories (Participating Employers under the Northern Employees Benefits Services Pension Plan)	July 2, 2001	
University of Moncton-personnel de soutien, techniciens, personnel administratif ou professionnel.	July 5, 2001	
University of Moncton-professeurs, professeures et bibliothécaires	July 5, 2001	
Province of Manitoba (participating municipalities under the Manitoba Municipal Employees Pension Plan)	July 10, 2001	
Ville de Montréal Nord	July 19, 2001	
Canadian Broadcasting Corporation	July 29, 2001	
Halifax Regional Municipality	July 29, 2001	
Colleges of Applied Arts and Technology (Ontario)	August 7, 2001	
Province of Manitoba (Participating Employers under the Healthcare Employees Pension Plan)	October 3, 2001 	
l'Université Laval (le Comité de retraite du Régime de retraite des employés et employées de l'Université Laval)	October 3, 2001	
l'Université Laval (le Comité de retraite du Régime de retraite des professeurs et professeures de l'Université Laval)	October 3, 2001 	
University of Western Ontario	November 22, 2001	
Association of Universities and Colleges of Canada	November 29, 2001 	
Canada Post Corporation	January 7, 2002	
Communauté urbaine de Montréal (unionized employees)	January 7, 2002	
Communauté urbaine de Montréal (management employees)	January 7, 2002	
Province of Quebec (RRE, RRF, RREGOP, RRCE) des enseignants, des fonctionnaires, employés du gouvernement  et des organismes publics et certains enseignants.	February 1, 2002	
Province of Quebec (RRPE) régime de retraite du personnel d’encadrement 	February 1, 2002	
Ontario Power Generation Inc.	February 24, 2002	
Province of British Columbia (Workers’ Compensation Board)	February 24, 2002	
Concacan Inc. (The Canadian Conference of Catholic Bishops)	March 7, 2002	
Bank of Canada	March 19, 2002	
Province of New Brunswick (Public Service Superannuation Act - NB)	June 3, 2002	
Province of Manitoba (Manitoba Teachers’ Society)	June 25, 2002	
Province of Ontario (participating employers under the Ontario
Municipal Employees Retirement System – OMERS)	July 18, 2002	
Canadian Teachers’ Federation	July 18, 2002	
Hydro-Québec	August 15, 2002	
Ottawa Macdonald-Cartier International Airport Authority	October 1, 2002	
Province of Quebec (RRAPSC) services correctionnels 	November 4, 2002 	
The Professional Institute of the Public Service of Canada	December 9, 2002 	
Workplace Safety and Insurance Board (Ontario)	February 3, 2003	
Ville de Gatineau; applies to participants under the pension plans for the following groups of employees:
•	Municipal employees, policemen and firemen
	of Ville de Hull
•	Manual labourers of Ville de Hull	July 16, 2003	
Aéroports de Montréal	July 22, 2003	
Abegweit First Nation	August 5, 2003	
Ville de Montréal (Arrondissement Montréal); applies to participants under the pension plans for the following groups of employees:
•	Management
•	Foremen
•	Manual Labourers
•	Municipal employees
•	Professionals
•	Firemen	September 8, 2003	
Université du Québec	October 2, 2003	
Archdiocese of Vancouver	October 15, 2003	
Canadian Air Transport Security Authority (CATSA)	October 15, 2003	
Queen’s University	October 15, 2003 	
Institut National d’Optique	November 27, 2003	
Mount Allison University	February 10, 2004	
Canadian Health Services Research Foundation	March 3, 2004	
University of Prince Edward Island	March 9, 2004	
National Bank of Canada	October 26, 2004	
NAV CANADA	October 27, 2004	
Le Comité de retraite du Mouvement Desjardins	December 17, 2004	
Régime de Retraite des employés syndiqués du Fonds de solidarité FTQ	May 13, 2005	
Régime supplémentaire de rentes des fonctionnaires et employés de la Ville de Gatineau (Secteur Gatineau)	May 30, 2005	
Régime de Retraite des employés et employées de la Ville de Sherbrooke	July 29, 2005