Reserve Force Pension Plan Part 1.1
Reserve Force Members Who Qualify for Coverage Under the Reserve Force Pension Plan
1. All forms mentioned in the Reserve Force Pension Plan administrative process are available on the DCFPS web site. The Administrative Process for Reservists in the Reserve Force Pension Plan:
- In order to become a Participant in the Reserve Force Pension Plan, a member must earn 10% of the Yearly Maximum Pensionable Earnings (YMPE) for two consecutive 12 month periods, over a rolling 24 month period. The earliest 24 month period that can be counted for this purpose is the period that started 1 Apr 1999. The member will begin paying into the Reserve Force Pension Plan on 1 Mar 2007 or the month following the month in which the member becomes a Participant, whichever is later.
- To view more information on YMPE, please see the Canada Pension (CPP) Plan Web site.
- Once the member becomes a Participant in the Reserve Force Pension Plan, he/she must serve an additional two pensionable years in order to elect past earnings. A pensionable year is defined as having at least one day of CF earnings in a Calendar Year. It is possible to become a Participant in the Reserve Force Pension Plan and have the required two additional pensionable years in order to elect upon the plan Coming Into Force. Note: Members, who meet the requirement to become a Participant prior to 1 Mar 2007, may use service after that date to meet the two pensionable year requirement. However, they will not be eligible to make an election until they have at least one day of paid service as a Participant.
- The month following the month in which a member’s eligibility to begin paying into the Reserve Force Pension Plan, Pension Services will notify the member by letter of his/her Participation in the Reserve Force Pension Plan. It is important for members to wait for the eligibility letter before trying to make an election. If a member believes he/she is eligible to be a Participant as of 1 Mar 2007 and has not received notification by 15 Apr 2007, he/she should email the eligibility cell.
- Pension Services will notify the member by letter the month following the month in which the member becomes eligible to make an election of past earnings.
- A list detailing those members who are eligible to become Participants in the Reserve Force Pension Plan (and therefore have their pay deducted) will be sent to Command Representatives for distribution to their respective Units. The first list will be sent in Apr 2007, followed by monthly lists thereafter.
- To initiate a Past Service Election, the Reserve Force Pension Plan Participant must gather proof of service and earnings. Details of the required documentation can be found at Prior Service Buyback for Reservists.
- To determine an estimate for an election, the member must complete the Reserve Force Capture Earnings Report.
- The member will complete and print the Reserve Force Capture Earnings Report from the web calculator. The member will submit hard copies of the Reserve Force Capture Earnings Report, the Past Service Election and the proof of service and earnings to Pension Services, “Attention: Prior Service Information Centre”.
- If the member decides to elect, he/she must elect all prior service; however, they may choose how much of their past earnings to actually purchase (the more earnings he/she buys, the more it will cost however it will lead to a greater potential future pension benefit). If a member opts to purchase less than the full election cost, he/she may not elect afterward to increase the original purchase amount (the only exception to this rule is that a vested Reserve Force Pension Plan Participant may not purchase prior RCMPSA, PSSA or Foreign Service unless he/she becomes a Regular Force Pension Plan (CFSA Part I) Contributor) and then decide how much of the past earnings to purchase by completing the Past Service Election Form. Those members who are eligible as of 1 Mar 2007 have the latter of 3 years (28 Feb 2010) or 1 year from the date of notification of election entitlement. If the member ceases to be a Participant before the expiry of this time frame, their right to elect will reinstated and a new notice period given if they again become a participant.
- On the Past Service Election Form, the member must state how payments will be made: Monthly, Lump Sum, RRSP transfer, or a combination of these methods. If the cost of the election is $500.00 or less, the full amount must be paid for in lump sum. Depending on the method of payment, an additional form will have to be completed by the member. The method of payments and associated forms are as follows:
- Once the election has been submitted with a selected payment option, Pension Services will begin a provisional deduction based on the earnings report from the member until the election can be verified. This verification could take 12 months or more. The deduction will be made from the member’s bank account in the form of a PAD (Pre-Authorized Debit). (Pension Services will send a Past Service Pension Adjustment Form (PSPA) to the Canadian Revenue Agency (CRA) for certification.)
- In summary, a Participant making an Election shall forward to Pension Services:
- Reserve Force Pension Plan Past Service Election Form
- Method of Payment Form
- Proof of Service Documents
- Reserve Force Capture Earnings Report from the on-line Buyback Calculator
- If CRA certifies the PSPA, both the member and Pension service will be notified by letter. Pension Services will then complete the Reserve – Election Certification Cost Form to notify the member of the verified cost of the election. This Form will contain the actual monthly payment (including interest), refunds if applicable and payment period of the election. On this form, the member will also be notified if there is a difference between the provisional payment and the verified monthly payment and what adjustments to the original payment schedule need to be made. If the verified amount of the election is $500.00 or less, the full amount must be paid within 30 days of the date on the Reserve – Election Certification Cost Form.
- If CRA does not certify the PSPA, CRA will contact the member and inform Pension Services by letter. Pension Services will send the member a Notice of Invalid Past Earnings Election. If the member makes the necessary arrangements required by CRA, he/she may resubmit another Past Earnings Election request to Pension Services before the expiry date indicated on the Invalid Past Earnings Election notice.