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1 |
PURPOSE |
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1.1 |
The purpose of this bulletin is to provide further information regarding the changes to the Public Service Superannuation Act (PSSA) as provided in Bill C-71 (the Budget Bill).
This bulletin should be read in conjunction with Special Bulletin 1999-05 dated April 20, 1999.
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1.2 |
In this text, use of the masculine is generic and applies to both men and women.
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2 |
POLICY |
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2.1 |
Bill C-71 (the Budget Bill) received Royal Assent on June 17, 1999.
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2.2 |
Bill C-71 changes the average salary for benefit purposes from 6 years to 5 years and the Average Maximum Pensionable Earnings (AMPE), used for benefit reduction purposes, from 3 years to 5 years.
These changes are effective from June 17, 1999.
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2.2.1 |
Average Salary for Benefit Purposes |
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For employees terminating employment on or after June 17, 1999, the average salary used for benefit purposes will be based on the 5 best consecutive years of pensionable service.
For employees who terminated prior to June 17, 1999, benefits will be based on the 6-year average.
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For Pension Division, the 5-year average salary will apply when the end of the cohabitation period is on or after June 17, 1999. The 6-year average will apply when the end of the cohabitation date is prior to June 17, 1999.
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2.2.2 |
Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) Reduction |
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The reduction applicable at age 65, or earlier if the member receives disability benefits under the CPP or QPP (see section 4.7 of the Superannuation Administration Manual), will be based on the lesser of the plan member's average salary or the AMPE over the past 5 years.
This provision is effective June 17, 1999 and applies to employees for whom the reduction takes effect on June 17, 1999 or later and employees who have opted for a Transfer Value, where the valuation date (i.e. the later of termination date or option date ) is on or after June 17, 1999.
Pension Division calculations performed on or after June 17, 1999 will also take into consideration the new AMPE.
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3 |
PROCEDURES/INSTRUCTIONS |
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3.1 |
PSSA - Average Salary for Benefit Purposes |
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The Pension Support System (PSS) has been amended to calculate a 5-year average where the termination date is June 17, 1999 or later, and a 6-year average where the termination date is prior to June 17, 1999.
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3.2 |
Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) Reductions |
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The Pension Quotation System has been amended to apply the appropriate AMPE in situations where the CPP/QPP reduction takes effect on June 17, 1999 or later. The new reduction formula will automatically be used by the Superannuation Directorate when applying the CPP/QPP reduction at age 65 (or earlier if in receipt of CPP/QPP disability benefits).
The new AMPE will also be used by the Superannuation Directorate when processing Transfer Value payments where the valuation date is June 17, 1999 or later.
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4 |
Other plan changes |
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The plan changes contained in Bill C-78 (the pension Bill) are expected for later this fall. Further information will be issued when the legislation receives Royal Assent.
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5 |
INQUIRIES |
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5.1 |
Any request for information regarding the foregoing should be addressed to your Public Works and Government Services Canada (PWGSC) Compensation Services Office.
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