Allowance Account
An account that records the estimated potential losses on the realization of government financial claims or estimated financial obligations that would otherwise not be recorded in the financial statements. These accounts, whether on their own or when grouped with other accounts, allow for a fair presentation of the assets or liabilities of the Government in its financial statements.

Annual Allowance
Benefit available to plan members who retire before age 60 and have at least two years of pensionable service. This benefit is a deferred annuity reduced to take into account the early payment of the retirement pension. It becomes payable at age 50 at the earliest.

Average Salary
Earnings 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.

Beneficiary
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.

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.

Children of a Plan Member
Dependant children who are 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 18^th birthday. The allowance is equal to one tenth of the plan member's pension (maximum of four tenths).

Consolidated Revenue Fund
The total of all public moneys that are on deposit at the credit of the Receiver General for Canada and from which most government expenditures are made.

Contributions
A sum paid by the employer (Government of Canada) and the Public Service employees to fund future retirement benefits. Each year, the government, as the employer, contributes amounts sufficient to fund the future benefits earned by employees in respect of that year, as determined by the President of the Treasury Board.

D - L

Deferred Annuity
Benefit available to 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. There are 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.

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.

Elective Service
Elective service is any 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.

Immediate Annuity
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 permanent 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.

Liability Account
An account that records financial obligations of the government.

M - Q

Minimum Benefit
Benefit is equal to the payment of the plan member pension for a period of five years. If the plan member or his eligible survivors 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 or, if none, to his estate.

Pension Transfer Agreement (PTA)
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.

Pensionable Service
Periods for which lifetime retirement benefits are provided to a plan member. It includes any periods of elective service regardless of whether he/she has paid fully for that service.

Plan Member
Person who contributes to the Public Service Pension Plan.

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 in the financial markets.

Public Service Pension Plan
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)
The Act that provides pensions for employees of the Public Service of Canada.

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 - Z

Return of Contributions
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.

Supplementary Death Benefit
Decreasing term life insurance benefit equal to twice the annual salary of the plan member; coverage decreases by 10 per cent 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 coverage is maintained for life.

Survivor
The survivor of a contributor is the person who, at the time of the contributor's death and before his retirement:

was married to the contributor (plan member); or
was cohabitating in a relationship of a conjugal nature with the contributor for at least one year.

Survivor Benefit
Pension benefit that is paid to the spouse of a plan member who dies. The same-sex 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 for at least one year at the time of death.

Transfer Value
Benefit available to contributors who leave the Public Service before age 50 with at least two years of pensionable service. This benefit is a calculated lump-sum 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.

Vesting
The establishment of the right to a retirement benefit after a period of pensionable service, and in the case of the federal public sector pension plans, that period is 2 years.

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.

Your Pension Plan
Booklet published by the Treasury Board Secretariat. It provides a factual, concise description of the major provisions of the Public Service Superannuation Act (PSSA), the Public Service Pension Plan.