CANFORGEN on Pay and PIL

[fraserdw]

There is only one Sipp Res - it was restructured about a decade ago.

Full-time service while on the Supp Res counts towards severance.  Just parked on the list time does not.

However:  If you were in the Reg F, transferred to the Supp Res, then rejoined the Reg F, your first period in the Reg F will count towards Severance; if you released, it will not.

So, compare Bloggins and Jones:  Both enrolled 01 March 2000.  On 29 Feb 2008 Bloggins transferred to the Supp Res and Jones released.  With less than 10 years in, neither received severance pay.  Both re-entered the Reg F on 01 Mar 2009, a year later.  Bloggins transferred from the Supp Res, Jones re-enrolled.

Now, with the new Severance rules, Bloggins will get: 12 years enrolled - 1 year Supp Res = 11 years of benefit, or 77 days of pay.  Jones, on the other hand, enrolled most recently in 2009, so he gets 3 years of benefit, or 21 days.

That's what I meant by Supp Time - it provides continuity between periods of Reg F and P Res service.

Roger that, I transferred to Ready Supp in 89 and gave back from the Supp in 95 when I lost interest in completing my PhD, so the 9 years of Reg F (1980 to 1989) is added in!  Thus 1980 to 2013 = 33 years - 6 Supp Years  = 27 years of benefit.

 

[CountDC]

going to be some very happy people and some not so happy people out of this one too.

Ex Reserve with over 10 years reserve time, did a CT to Regs and didn't apply for your RFRG - you are not going to get this instead for those years.  You will be given the chance to apply for your RFRG when they send your package.  It will be paid under the rules and your  pay rate that were in place at the time you CT.  If you do not apply for the RFRG then you will get nothing for that period. 

Ex Reserve with under 10 years reserve time and did a CT - be happy.  You are now going to get paid for those years under this program as you did not qualify for RFRG.

The guy that did 10 years will get 10 X reserve weekly rate of pay at time of CT / 2 (under 20 was 1/2 for RFRG)

The guy that did 9 years will get 9 x weekly rate of pay at time of release

Nice thing is where the RFRG was based on full years this is based on a two decimal percentile. Means the 7 months I didn't get RFRG for I will now get paid for (.58 better than nothing).

Get this - a person only needs four days to qualify for a payment.  That puts him at .01.

 

[Pusser]

So what happens to those of us who jumped to the Dark Side back in the days when we were released from the Reserve and then immediately enrolled in the Regular Force (i.e. we didn't transfer per se).  I've claimed and paid for the pensionable service, but will it bump up my severance pay?

 

[dapaterson]

So what happens to those of us who jumped to the Dark Side back in the days when we were released from the Reserve and then immediately enrolled in the Regular Force (i.e. we didn't transfer per se).  I've claimed and paid for the pensionable service, but will it bump up my severance pay?

The CBI refers to "a member’s number of years of service after the member’s most recent date of enrolment".  Thus, by the books, that time would not count.

That said, a member might reasonably grieve that interpretation, as the service was essentially without interruption and was done due to administrative direction of the CF.  It's a question worth raising if the interpretation goes against you.

 

[CountDC]

from what we were told in the release training as long as there was no break in service you are good to go.  That break is a key point for some as even 1 day starts the clock again. 

 

[Pusser]

The CBI refers to "a member’s number of years of service after the member’s most recent date of enrolment".  Thus, by the books, that time would not count.

That said, a member might reasonably grieve that interpretation, as the service was essentially without interruption and was done due to administrative direction of the CF.  It's a question worth raising if the interpretation goes against you.

I read it that way too.  According to my MPRR, my most recent date of enrolement is clearly the day I signed on to the Regular Force.  However, back in the dark ages, there were no "Component Transfers" (at least not like they do them today) and so anyone changing components was released from the Reserve and then immediately enrolled in the Regular Force.  I remember the conversation well as this also effectively denied me any vested rights to pay as a Reserve LS becoming a Regular Force Officer Cadet on ROTP pay (which was considerably lower).  Seeing as how we no longer do it this way, I would think I would have a pretty argument to say that I have no broken service as the switch was back to back (literally, I was a Reservist until 2400 and began in the Regular Force at 0000).  I will certainly be pressing the point.

 

[CountDC]

The way they are doing it is your most recent date of enrolment goes all the way back as long as there was no break.  If you did the same as me and went directly from reserves to regular with no break in between then your date of enrolment is the reserve one.

Some people either through their own action or the units were released from the reserves a few days prior to the date they became regular or vice versa and do not get to count that earlier time as the break exists.

Basic - it must be continuous service and a period with sup res counts in there but you do not get any money for it unless you did some full time during your sup res period.

 

[AliG]

The way they are doing it is your most recent date of enrolment goes all the way back as long as there was no break.  If you did the same as me and went directly from reserves to regular with no break in between then your date of enrolment is the reserve one.

I was told at the release section here that for CFIRP purposes any class A service breaks the time line. For example, if you have reg then a class A period with intermittent class B and C (deployments) and transferred back to reg then your most recent date of enrolment would be the day you last started reg force whether there was a break in service or not if your last day in the res was A class.  All the previous res (A/B/C and reg) time is not counted. In other words, don't count on that reserve time for the 10 years service requirement for the retirement move. Moving the dwelling related expenses to custom is a way to pay lip service to the CFAO last move entitlement.

Knowing that, I would never have moved on my last posting and used IR for the duration instead.

 

[Stoker]

Guys we've being told that for the RFRG its being based on what rate of pay you we're receiving on April 1st for example if you were receiving Class C then it will be calculated on Class C rate.  Anyone hear anything similar?

 

[AliG]

From the release interview last week; unless the rules change again the gratuity is based on the rate of pay you have *at release*. It's just the length of time in the calculation no longer increase as of 1 Apr.

 

[dapaterson]

Guys we've being told that for the RFRG its being based on what rate of pay you we're receiving on April 1st for example if you were receiving Class C then it will be calculated on Class C rate.  Anyone hear anything similar?

According to the CBI, if you were on class C on 29 Feb 2012 and elect for payment in lieu you will be paid out at the class C rate of pay in effect on 01 March 2012. - CBI 204.40(6).

 

[Stoker]

According to the CBI, if you were on class C on 29 Feb 2012 and elect for payment in lieu you will be paid out at the class C rate of pay in effect on 01 March 2012. - CBI 204.40(6).

Good to know, I was lucky enough to be on a 10 day Class C tasking at the time.

 

[CountDC]

AIG - moves is a whole other matter and no your class a time would not factor in.

Chief - note that the rate is dependant on you electing PIL.  If you wait until you release then it will be based on the rate of pay at that time.

Some will really have to look carefully at what they may gain by waiting versus taking the PIL as there are a lot of factors - pay increase, promotion, ipc are some.  I am still flipping a coin myself.

 

[Harris]

I've searched here and online and still am not clear as to what this statement actually means from the DGCB page: "If a CF member has unused RRSP room, they can request for a reduction of Income Tax at source. Please consult the Canada Revenue Agency (CRA) for further details."  Does this mean I can have the PIL go direct to my RRSP (I have the room) and not have to pay taxes on it?  If that is not that case what does this statement mean?

 

[Occam]

I've searched here and online and still am not clear as to what this statement actually means from the DGCB page: "If a CF member has unused RRSP room, they can request for a reduction of Income Tax at source. Please consult the Canada Revenue Agency (CRA) for further details."  Does this mean I can have the PIL go direct to my RRSP (I have the room) and no have to pay taxes on it?  If that is not that case what does this statement mean?

Yes, you have it right. (With the caveat that I'm not a financial planner, nor a CRA agent...though I did stay at a Holiday Inn Express last night).

For complete peace of mind, why not give the SISIP financial planners a call, while you still have time to elect what you're going to do with the money?

 

[Harris]

Thanks.  I will call them.

 

[captloadie]

I was at my bank the other day signing some mortgage papers when I overheard a conversation in the hallway. One of the financial planners was telling a customer that they would be silly not to cash out the severance now as "A dollar today is always worth more than a dollar tomorrow". Although true, without considering things like promotion, pay increase etc. not the best of advice. However, the customer also had a the same problem many others have written here. The lack of understanding that no matter what amount is cashed out and not put it into an RRSP is taxed at source. They also didn't understand that it doesn't mean a bigger tax return at the end of the year.

I think that they need to be doing coast to coast briefings with mandatory attendance so members understand what their true choices are. The briefings should include a financial planner, and a member from CRA as well. But, I won't be surprised if there is nothing more than a website with some FAQ's and scenarios, and a powerpoint with no speaking notes or explanations.

 

[jollyjacktar]

Was just on a SCAM seminar last week.  The topic was covered and explained in detail.  They also explained that if you cash out, the rate is based on your pay as of 29 Feb 2012.  It is also anticipated it will take months to process (payouts) as well as they have a small cell of 12 folks working on it and they're expecting a flood.

 

[NavyShooter]

I'm planning to cash out my severance. 

I do not plan to roll it into my RRSP's.  I intend to pay down my mortgage.

That, alas, means that I'm going to take a big hit on the amount coming out due to taxation.

I'll be due about 19.5 weeks of severance pay. 

My monthly salary at the time of cashout calculation is $6,127. 

Multiply by 12 months gives $73,524.00

Divide by 52 weeks gives me $1,413.92

Multiply by 19.5 weeks will give me a severance payout of about $27,571.5

On which I expect to be taxed at approximately 40% resulting in a payout of about $16,542.90... ish.

And I can pay down a maximum of $15,000 per year on my mortgage, and I owe just around $35,000 right now on it.  By the time the severance payout comes around, I'll be down to about $28,000 remaining on my mortgage...and tossing $15,000 on that will bring me down to less than 12 months worth of payments.  Which is a good thing.  So, basically, 12 months after I get my severance payout, I will be mortgage free.

At which point, I'll be able to calve off some of my income to put towards other investments (and of course, the obligatory house repairs which will no doubt crop up.)

Is that the BEST thing I can do with the money?  I don't know.  It's what I plan to do.  I echo the suggestion that there should be briefings and financial advisors making the rounds as people try to figure out what to do with this money.  That said, my mind is made up, and I know what I'm going to do.

YMMV, but I don't like owing the bank, and I will be very pleased the day I make my last mortgage payment.

NS

 

[jollyjacktar]

I forgot to mention that for this instance they also are going to take into account partial years as well in the calculation.  eg.  I joined on 12 Jan 89, so I'll have 23 years, 48 days which comes to 23.13 weeks of severance.

They stressed again and again, talk to a SISIP financial planner to get your best bang for your buck at whatever you want to accomplish with this payment.