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Home > Glossary


Glossary

Here you will find a list of useful pension and benefits terminology.

Please select a letter from the alphabet to go to terms beginning with that letter, or browse the full list of terms.
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A

Annual Allowance



A benefit available to plan members who have more than two years of pensionable service, who retire before age 60 and are not entitled to an immediate annuity. This benefit is a reduced pension that takes into account the early payment of a retirement pension. It becomes payable at age 50 at the earliest.

Average Salary for Pension Purposes



Salary of the five consecutive years of highest paid pensionable service in the Public Service. The average salary of those five years is then used to calculate pension benefits under the Public Service Pension Plan.

Average Maximum Pensionable Earnings (AMPE)



The calculation of a five-year average using:
  • the Year's Maximum Pensionable Earnings (YMPE) under the Canada Pension Plan / Quebec Pension Plan (CPP/QPP) for the year of your retirement from the Public Service or the year in which your CPP or QPP regular retirement pension commences, whichever is earlier and
  • the Year's Maximum Pensionable Earnings (YMPE) for the four preceding years.
Where the CPP/QPP reduction commenced prior to June 17, 1999, the AMPE is calculated over a three-year period.

Example:  The AMPE for someone retiring in 2004 is $39,080.

This is the average of the YMPE for 2004, $40,500, and the YMPE for the four preceding years; that is $39,900 in 2003, $39,100 in 2002, $38,300 in 2001 and $37,600 in 2000.

$195,400 (total YMPE) ÷ 5 = $39,080 (AMPE)
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C

Canada Pension Plan (CPP)



A mandatory earnings-related pension plan implemented January 1, 1966, to provide basic retirement income to Canadians between the ages of 18 and 70 who work in all the provinces and territories, except in the province of Quebec. Quebec operates its own pension plan similar to the CPP for persons who work in that province.
D

Date of Retirement



The date on which a pension plan member most recently ceased to be employed, which is normally the day following the last day for which the plan member received salary. If the plan member was on authorized leave without pay, the retirement date is the day following the date on which the employing department advises the Superannuation, Pension Transition and Client Services Sector that the plan member ceased to be employed.

Deferred Annuity



A benefit available to most plan members who leave the Public Service before age 60 and have at least two years of pensionable service. This benefit is calculated using the same formula as an immediate annuity, but payment is deferred until age 60. A plan member entitled to a deferred annuity may request an annual allowance at any time after he/she reaches age 50.

Defined Benefit Pension Plan



A type of registered pension plan that promises a certain level of pension, usually based on the plan member's salary and years of service. The Public Service Pension Plan is a defined benefit pension plan. This is contrasted with defined contribution pension plans where the benefit at retirement is determined by the amount of annuity that the accumulated contributions plus interest can purchase at retirement.

Designated Beneficiary for Supplementary Death Benefit Plan Purposes



The individual that is named by a plan member to receive the Supplementary Death Benefit and, if applicable, the minimum benefit payable under the Public Service Pension Plan after the death of a member. If there is no designated beneficiary named, then the benefit will be paid to the member's estate.
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E

Elective Service



An eligible period of employment, either in the Public Service or with some other employer that occurred before the employee became a contributor to the Public Service Pension Plan. The plan member may choose to count these periods of prior service as pensionable service.
G

Garnishment, Attachment and Pension Diversion Act (GAPDA)



An Act to provide for the diversion of pension benefits payable under various Acts, including the Public Service Superannuation Act, to satisfy or partially satisfy an obligation to pay maintenance or support to a spouse, child or other dependant.
I

Immediate Annuity



A benefit payable to plan members who retire at any time after reaching age 60 with at least two years of pensionable service or after reaching age 55 with at least 30 years of pensionable service or at any age in case of disability.

Indexing



Automatic adjustment of pensions in pay, or accrued pension benefits (deferred annuities), in accordance with changes in the Consumer Price Index. Public Service pensions are indexed in January of each year in order to maintain their purchasing power.
M

Minimum Benefit



Benefit is equal to the payment of the plan member's basic pension for a period of five years. If the plan member or his eligible surviving spouse or children have not received, in total, pension payments equal to five times the amount of the plan member's annual basic pension, the balance in the form of a lump sum becomes payable to his designated beneficiary under the SDB or, if none, to his estate.
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P

Pension Benefits Division Act (PBDA)



An Act to provide for the division of pension benefits payable under the Public Service Superannuation Act (and various other federal statutes) after the breakdown of a marriage or common-law relationship. An application for division may be submitted if a written agreement or court order states that the plan member's pension is to be divided.

Pensionable Service



Periods of service to the credit of a Public Service Pension Plan (PSPP) member. This includes any periods of purchased service (service buyback/elective service).

Pension Transfer Agreement (PTA)



An Agreement negotiated between the Government of Canada and an eligible employer to provide portability of accrued pension credits from one pension plan to the other.

Pension Portability



Arrangements for the transfer of an employee's pension credits to another pension plan. See the explanations on Pension Transfer Agreement and Transfer Value.

Public Sector Pension Investment Board (PSPIB)



Board established on April 1, 2000 under the Public Sector Pension Investment Board Act. The Board's mandate is to invest the employer and employees pension contributions made on or after April 1, 2000 in the financial markets.

Public Service Pension Plan (PSPP)



Pension plan implemented on January 1, 1954 under the Public Service Superannuation Act that provides benefits for Public Service employees payable on retirement, termination of service or disability and for their survivors after death.

Public Service Superannuation Act (PSSA)



An Act to provide pension benefits to eligible federal public servants and their dependants. The Public Service Pension Plan (PSPP) provides benefits for Public Service employees payable on retirement, termination of service or disability and for their survivors after death under the provisions of the PSSA.
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Q

Quebec Pension Plan (QPP)



A pension plan similar to the Canada Pension Plan, which covers persons working in the province of Quebec. It is administered by the Régie des rentes du Québec.
R

Retirement Compensation Arrangement (RCA)



A plan which provides benefits that exceed the allowable limits for a registered pension plan under the Income Tax Act.

Return of Contributions (ROC)



Benefit available to contributors who leave the Public Service with less than two years of pensionable service under the Public Service Pension Plan. It includes employee contributions plus interest, if applicable.
S

Service Buyback



Purchase of prior eligible service that a contributor may count as pensionable, at his option, subject to certain conditions.

Superannuation, Pension Transition and Client Services Sector (SPTCSS)



The primary office responsible for the administration of the pension plan for federal public service employees. It is a sector of Public Works and Government Services Canada (PWGSC) and is located in Shediac, New Brunswick.

Supplementary Death Benefit (SDB)



Decreasing term life insurance benefit equal to twice the annual salary of the plan member; coverage decreases by 10% per year starting at age 66. A minimum amount of coverage ($10,000) is provided at no cost to the plan member at age 65 for plan members entitled to an immediate annuity or an annual allowance payable within 30 days after termination of employment in the Public Service. This minimum coverage is maintained for life.

Supplementary Retirement Benefits Act (SRBA)



An Act to provide supplementary retirement benefits (indexing) for those in receipt of pensions payable out of the Consolidated Revenue Fund. For the full Act, refer to the Department of Justice.

Survivor for Pension Purposes



The survivor of a contributor is the person who, at the time of the contributor's death:
  • was married to the contributor (plan member) before retirement; or
  • was cohabitating in a relationship of a conjugal nature with the contributor prior to retirement and for at least one year prior to the date of death.

Survivor Benefit



Pension benefit that is paid to the eligible survivor of a plan member who dies. The common-law survivor of a plan member may be entitled to a survivor benefit if this person has lived with the plan member in a relationship of a conjugal nature prior to retirement and for at least one year prior to the date of death.
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T

Transfer Value



Benefit option available to contributors who leave the Public Service before age 50 with at least two years of pensionable service. This benefit is the actuarial value of the plan member's future pension benefits. It must be transferred to another registered pension plan, to a retirement savings vehicle or to a financial institution to purchase an annuity. For more information, visit the Transfer Value Information Package.

Transformation of Pension Administration



This transformation will modernize the public service pension systems and enhance services to you and your beneficiaries. Over the next four and a half years, PWGSC will: replace the pension systems, improve client services and offer self-service options and automated initiation of service requests.

Treasury Board of Canada, Secretariat (TBS)



The administrative arm of the Treasury Board. The TBS provides advice and support to the Treasury Board. The President of the Treasury Board is the minister responsible for the Public Service Superannuation Act (PSSA), including financial management of the Public Service Superannuation Account and the Public Service Pension Fund.
Y

Year's Maximum Pensionable Earnings (YMPE)



The maximum earnings for which contributions can be made to the Canada Pension Plan / Quebec Pension Plan (earnings ceiling) during the year.
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Last updated:  2007-11-05 Important Notices