Immediate Annuity
When to make your option: You are entitled to an immediate annuity when you reach 60 years of age (with at least two years of service) or when you
reach 55 years of age with at least 30 years of service. If you continue working, you will still contribute to the Public Service Pension Plan (PSPP). If you have earned
35 years of pensionable service, however, you will only contribute to the indexing portion of the benefits.
What about inflation: An immediate annuity is fully indexed as of the most recent date you leave the Public Service, in order to maintain your
purchasing power throughout your retirement. Your total pension amount is indexed according to the consumer price index (CPI). Refer to indexing for additional information.
Protection in case of disability: If you opt for an immediate annuity and become disabled as per the definition described under the Public Service
Superannuation Act (PSSA) after your departure from the Public Service, then it is important that you inform the Superannuation Directorate. In that circumstance,
your immediate annuity will not change, but it will be reduced at age 65 or if you begin collecting Canada Pension Plan (CPP) / Quebec Pension Plan (QPP) disability
benefits. The disability benefit is fully indexed annually.
Reduction at age 65: Your immediate annuity will be reduced at age 65 as a result of the integration with the CPP/QPP or as soon as you receive a
disability pension from the CPP/QPP. For additional information, see CPP/QPP Integration in "Formulas and Methods " or refer to:
co-ordination of the Public Service Pension Plan with the Canada Pension Plan or Quebec Pension
Plan.
What happens to your insurance plans: If you opt for an immediate annuity, then you are considered a PSPP member. As such, you or your eligible
survivors may ask to become a member of the Pensioners’ Dental Services Plan (PDSP) and the Public Service Health Care Plan (PSHCP). However, if you begin receiving
an immediate annuity within 30 days of your departure, then your PSHCP automatically continues, but at a different contribution rate than for Public Service employees.
Certain conditions apply. Learn more on My Benefits.
Protection in the event of death: In the event of your death, your plan offers you several types of benefits and a form of decreasing term life
insurance. If you are entitled to an immediate annuity, then your eligible survivor and children could receive a benefit. You can find out more about this topic on
Protecting Your Survivors.
Protecting your survivor: If you are entitled to an immediate annuity, then your eligible survivor may receive a benefit in the event of your death. A
survivors’ benefit normally comes to half (50%) of a pension (before reductions). See Survivor Benefit in "Formulas and Methods ".
This survivor's benefit is fully indexed on an annual basis and for the rest of your survivor’s life.
Protection for your children: If you are entitled to an immediate annuity, then your eligible children may receive a child’s allowance in the
event of your death. A child’s allowance is 20% of the survivor’s benefit for each of your children, up to a maximum of four children. If there is no survivor
or if the survivor does not receive any survivor’s benefits, then the child’s allowance is 40% of the survivor’s benefit for each child, up to a maximum
of four children (see Child Allowance in "Formulas and Methods "). A child’s allowance is fully indexed on an annual basis until your
child, according to the definition of child under the Public Service Superannuation Act (PSSA) reaches 18 years of age, or later if he or she is a full time
student and is deemed to be a dependant "child under the PSSA and its regulations.
Supplementary Death Benefits: The Supplementary Death Benefit (SDB) Plan is a form of decreasing term life insurance plan. The death benefit under this
plan is paid to your designated beneficiary. The benefit amount is twice your annual salary, rounded up to the nearest $1,000. This initial benefit amount decreases by 10%
annually, starting at age 66.
Your membership in the SDB Plan is automatically extended if you receive your immediate annuity within 30 days of your departure. You also remain entitled to the
employer's $10,000 paid-up benefit.
What happens if you are re-employed: If you again become employed in the Public Service and a PSPP contributor, then your immediate annuity will be
suspended. Your pension may be recalculated based on the entitlements accrued during your period of re-employment and indexed as of your new departure date.
Consult re-employment in the Public Service for more information.
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