Fixed Period of Service contract

[hiv]

Back in July I was offered a new contract that would bring me to July 2021 (my 20 years). However, instead of being an IE it was marked as an FPS contract. Will this have any bearing on anything? Will it make it more difficulty to get out should I choose to do so? I tried looking over the CFAOs but they weren't really that clear. Maybe a clerky type could lend their expertise.

 

[sinblox]

Sorry to distract, but what does the 20 year contract mean? you're in for 20 years regardless? do you get extra benefits for that as opposed to just renewing every few years?

 

[AmmoTech90]

The QR&O states "Fixed Period of Service" (6.22) or "Indefinate Period of Service" as the two types of contract an NCM may be on.  There are different types of FPSs (IE/CE/BE) etc.  Therefor you are signing a Fixed Period of Service that takes you to 20 years service which in CFAO 6-2 is designated an IE.  As the QR&Os is the "senior publication" I would think the terminoligy used in contract would be taken from them but the details of that FPS should be included in the re-engagement form.  CFAO 6-2 defines what the different FPSs/IPSs are.

For sinblox, it means that you can serve up to 20 years.  Normally this means 14 or 15 more years as it is offered after or during your second three year contract.  You can apply for release at anytime during your IE but may be held for six months.  After twenty years your on the 30/30 plan, 30 seconds to piss you off and you're out in 30 days.  Of course during deployment the rules are a bit different.  Very rarely will anyone be offered anything other than a IE (20 years) after your second BE (3 year) contract.  The main benefit of the IE is that as long as you complete you are (currently) eligible for an immediate unreduced annuity (pension) upon completion of your contract.  This means you could release at age 37 (having joined at 17) and draw 40% of your salary.  In theory you could get up to 42% if you had joined the reserves at age 16 and somehow worked full time during that year and then joined the regular force (very unlikely).

 

[Inch]

Tribal, ask the OR for a copy of your MPRR before you get too excited, in the second paragraph titled "Military Data" next to "Engagement Type"  it'll say what type of engagement you're on.  Typically, it's 2 BE's followed by an IE for NCMs.

Now, I don't claim to be an expert by any stretch of the imagination, but I don't believe an FPS is an actual contract. It just means "Fixed period of Service" which is what all contracts are with the exception of Indefinite Period of Service contracts (IPS). After your IE you may be offered an IPS or a Continuing Engagement (CE). The IPS is just what it sounds like, indefinite, whereas the CE is a fixed period of 5 years or whatever the case may be.

How it works is like this, if you finish a contract other than an IE, you'll get severance pay as well as your pension contributions and a few other things. If you break any contract by releasing, you'll only get your pension contributions returned and that's it. If you complete an IE, you get a pension. Don't worry too much about the IPS right now, that's still 15 years down the road.

sinblox, you're not obligated to stay in the CF unless you're on restricted release. I'm not sure how it works for NCMs but for Officers it's dependant on whether or not you get your school paid for, what trade you are, etc. Take me for example, when I got my pilot wings I was put on Restricted release until 2011, meaning I cannot get out before then regardless of what I want to do. You don't get anything extra by signing an IE, except a guaranteed job that will result in a pension. They don't have to renew your contracts.

Hope that clarifies it somewhat.

Cheers

AmmoTech, you answered while I was typing, glad to see we're in agreement.  ;D

 

[hiv]

Thank you for your answers. I was somewhat curious though because my unit went on a big IE signing binge once the CF announced the new pension plan. In fact, I never even got my 2nd BE and I only have 3 years in right now. My question stems from the fact that the majority of my colleagues had the Indefinite Engagement box ticked on their contract extensions whereas I'm the only one that I know of who has the FPS box ticked. Anyway, I'll swing by the OR next week and see if I can get a definitive answer from them.

Thanks for your input.

 

[Release Section]

The reason you were offered FPS rather than IE is because you are either:  (1) a re-enrollee with previous Reg F experience; or (2) you were >35 yrs old when you enrolled which means you would not be able to complete a 20 yr IE before CRA (still age 55 for those who enrolled before July 2004).

The re-enrollee scenario is due to some legal technicality of the CF Superannuation Act.  Read it if you have insomnia:  http://laws.justice.gc.ca/en/C-17/index.html.  Much better explanation for the layman (laysoldier?) is in the booklet "Your Pension Plan and Release Pay Benefits":  http://www.dnd.ca/admfincs/dappp/handbook_e.asp.  Every soldier should read this booklet!!!

If you are a re-enrollee with previous Reg F time - the end of your FPS should be the point you will have 20 cumulative years of Reg F service.  If it is the age thing the FPS will expire on your 55th birthday.  Simple?  nuh-uh!

Good news:  Pension Modernization makes all this complex bullshit go away finalement:  http://www.forces.gc.ca/dgcb/dpsp/engraph/modernization_e.asp?sidesection=5&sidecat=17.  Pension benefits will be based on cumulative years of service PERIOD. 

If someone out there is on a FPS and is considering requesting an IPS (yes, I said "requesting" - IPS will NOT be offered - read on for reason...) keep in mind that there are currently very nasty penalties (5% for every year short of 24 yrs + 1 day) and that for FPS/IPS folks these *&#! penalties apply to your ENTIRE PENSION!!!!!!!  Relax IE/IPS people - you have penalties too but you have "IE Protection" - your pension will not dip below the 40% earned at end of IE.  In fact, despite the percentage of a percentage penalties mentioned above - your pension is actually growing between 20 and 24 years + 1 day.  The penalties are just slowing the growth of your pension. 

The only drawback to the new pension is that the IE is 25 years.  No immediate unreduced annuity until you have 25 years of service!  That is why there was a big push to get folks signed up to IE 20.  If you are on IE 20 or FPS 20 or IPS you have no worries mate.  If you are on a BE or SE (for officers) you might want to rattle your boss' cage and take a look at DMCARM 7337.  I couldn't find a link but the text is here in CFSU Ottawa's ROs: http://www.cfsuo.forces.gc.ca/csss/ro/ro2004/01prt2_e.asp.  Get your bad self on an IE toute suite mon ami.  I am looking forward to hitting my 20 years of service in a little under two years and will have FREEDOM to choose at that point.  Right now they have me by the short hairs.  I will go where they want, when they want 'cause I want/need the pension baby.  I will probably continue to go where "they" want after I have 20 because I LOVE IT - but that will be my call.  FREEDOM BABY!

 

[Release Section]

I forgot to mention WHY you need to get on the IE asap friends.  The DMCARM 7337 message linked above is a limited time offer.  It will go away as soon as the new Terms of Service (TOS) modernization is released.  Scuttlebutt has it that TOS will be released in Jan 05 at which point the only IE available will be IE 25 YOS.  Yikes!  Retiring at 37 with 40% is too good to be true I guess.  Again:  those of us with IE 20s or FPS 20s or CEs or IPS are SAFE.  No worries...

 

[hiv]

I forgot to mention WHY you need to get on the IE asap friends.   The DMCARM 7337 message linked above is a limited time offer.   It will go away as soon as the new Terms of Service (TOS) modernization is released.   Scuttlebutt has it that TOS will be released in Jan 05 at which point the only IE available will be IE 25 YOS.   Yikes!   Retiring at 37 with 40% is too good to be true I guess.   Again:   those of us with IE 20s or FPS 20s or CEs or IPS are SAFE.   No worries...

Thanks a lot for clarifying all of that for me. I do indeed have some previous Reg Force time where I got out and then got back in again, so that makes a lot more sense now. Another question I have, however. Is the FPS as easy to get out of as the IE? I may have an opportunity stirring up in the RAF and I'd hate to get stuck in a paperwork quagmire if I need to get out again.

Thanks!

 

[Release Section]

Once you have completed your initial 3 year Basic Engagement it doesn't matter if you are on a FPS or IE as far as the release process is concerned.  It is rather difficult to squeeze out of the initial BE but after that, normally 6 months notice is all that is required for a 4(c) release.  4(c) release (breaking a contract with less than 20 YOS) means no severance pay if you have less than 10 YOS and 1/2 severance pay (3.5 days for every completed YOS) if you have over 10 but less than 20 YOS.  4(c) also means no move benefits.  But FPS or IE - you can normally release by providing 6 mos. notice to your C of C.