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Backgrounder
Modernizing the CFSA : Providing Greater Flexibility and Responding to Emerging Human Resource Challenges
BG-03.020 - May 15, 2003
Why the Need for Flexibility?
The Canadian Forces face major pressures in responding to the growing and fluctuating demands placed on it both at home and abroad. To meet these requirements, the Canadian Forces must improve its employment flexibility to allow use of its human resources under more varied terms of service, including short-term and intermittent assignments, to meet surge demands in military operations.
It is important, therefore, that military pension arrangements have the flexibility to support the emerging employment strategies required to meet the obligations demanded by modern military operations.
An Employer of Choice
The Canadian Forces have taken major steps to improve career management, education and training systems with the goal of enhancing military service a career of choice. It must be able to compete for and attract the best and brightest into military service. An aging population, smaller family sizes and rising enrolments in post-secondary education mean that the military's traditional recruiting base (18 to 24-year-olds) has declined considerably in the last two decades. Competition for attracting skilled personnel has become intense; many educated new personnel are attracted to technological and other service sectors by high salaries, stock options and more flexible work arrangements. By offering exciting, challenging and flexible career paths, an improved quality of life and compensation packages that include competitive pensions, the Canadian Forces will continue to attract the best and the brightest and improve its status as an employer of choice.
Furthermore, to respond to the need for operational flexibility, the military must be able to employ and deploy its valued human resources for short or specified periods of time and provide for more seamless mobility between the Regular and Reserve components of the Forces.
Finally, there is also a greater need to retain highly trained personnel to develop, maintain and operate the more sophisticated, complex military equipment and systems that have emerged in recent years. Once the Canadian Forces has invested the cost, time and effort in the significant and unique training of military personnel, it becomes critical to retain or have readily available such skilled service personnel.
Flexibility Constrained by Terms of Service
Members of the Canadian Forces are enrolled for specific periods of service. These specified periods are known as "Terms of Service" and are similar to fixed-period employment contracts in the civilian world. The current Canadian Forces Superannuation Act is closely tied to these "terms of service" and has effectively acted to keep personnel while "in their prime" and permit early retirement to make room for new recruits. The pension regime, however, does not accommodate shorter-term or intermittent employment arrangements that could satisfy periodic special demands that contemporary military operations require. Existing pension arrangements also do not adequately accommodate interruptions in service that service members may require for various reasons.
CFSA Redesign Amendments
A pension regime that is based on accumulated years of pensionable service (a design feature found in many other pension plans) rather than formal "terms of service" would better support the use of shorter-term assignments often needed to temporarily augment Force requirements. It would also support re-enrolments into and movements within the Canadian Forces.
This approach would better accommodate breaks in service without adversely affecting earned pension credits. Potential candidates might also be more interested in trying shorter periods of service in the military. A pension plan that allows more flexibility in a military career would better support recruitment, retention and mobility of Canada's skilled military personnel. In addition, having benefits depend on pensionable service rather than terms of service should assist members in their financial and pension planning.
Finally, authority would also be provided to make regulations to permit specified Regular Force members who are currently on track for certain benefits under the current rules to elect to have their benefits follow the scheme in the present Act, in place of those set out in the amendments.
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