Reserve Pension- Merged

[titan_486]

Some things you should know; it's not an equal to the Reg Force plan - don't expect that your gonna get the same

Buyback
- using CFPMP slide in their presentation which shows buyback for a Cl A Major as over $10 K.  Right now, it's only $1K until 1 Mar 07.  When pension reg is approved, that's a 1000% increase for anyone doing a componenet transfer. Why should we be paying all this interest when the plan was supposed to be online years ago.  7% for each year of delay - this was approved in 1999!  Oh yeah, reg force doesn't pay interest on their buy-back payments, res force will have to pay 7% life insured payments until age 65 - reg force payback over a lifetime.

-admin of buyback for reg force, they just sign a sheet and some clerk tracks it down.  For res force, you have to do all the legwork yourself which is really hard since DND didn't give you any pay records before RPSR started in late 90's.  As for getting your own data from Library and Archives - they're not doing it any more cause they don't got the staff - so your going to get screwed trying to get the data DND was legally required as an employer to give to you anyway. The longer you have to wait to prove your pay, the more interest you pay

- for the full-time soldiers, reg force can start making contributions as soon as they enrol and they get vesting after two years in the plan - no interest on there contributions.  Res force has to work 55/60 months to get into the full-time plan, then there wages are updated and contributions get 7% interest over the nearly 5 years - talk about sticking it to reserves!

Annuitants - this is a plum for reg force only.  If you retire as a reservist and want to start work again, you can't work for a year with a 35 day break like a reg force guy can - he gets pension and res salary.  You only get salary and have to pay pension on that.

Disability - anyone notice the change? - res has to meet CPP definition to draw pension early - you have to be almost paralysed or brain dead.  Reg force still gets early pension if they burn a knee and can't work in their trade anymore

So half a loaf for 1000% of the price.  TB signs off on this tomorrow - tell your CO, MP, news, anyone NOW or your stuck with it.

 

[genericview]

As shocking as it may seem, when I was 16 when I joined my primary administrative task was not to horde my pay slips for 30 years to keenly position myself to prove my pay at the dawn of a new century.

I smell a class action lawsuit depending on how they address the landslide of complaints over lost (non proven) service.

What a mess.

 

[dapaterson]

Titan:

Reg F members do in fact pay interest on their buybacks; it's at a lower rate though.

The pay records maintenance is an abomination, no doubt - I've found copies of all but 3 of my pay guides, but many others are SOL.  I foresee many redresses over this - the CF has a legal responsibility to maintain those records and has failed.  Fortunately, as a "systemic failure", no one individual will be held to account.

Tha annuitants policy will change in time for the Reg F; it's costing Goverment way too much money.  I suspect the OAG will sniff around soon enough and expose this for what it is: a very self-serving internal policy that flouts the spirit, if not the letter, of the law.

 

[charlesm]

Dataperson,

  If I did a CT to the reg force I could buy back my reserve time at the following using the CFSA Part I

http://www.admfincs.forces.gc.ca/pension/handbook_e.asp?sel=3#toc_Elective_service

Prior Canadian Forces (Reserve) Service
For any portion of your prior Reserve Service that occurred before January 1, 1966, the rate of contribution is 6.5 percent for male contributors and five percent for female contributors. For service between January 1, 1966 and March 31, 1970, the rate is 6.5 percent for both male and female contributors, adjusted to take account of the CPP. From April 1, 1970 to December 31, 1999, the rate is 7.5 percent again adjusted to take into account the CPP. From January 1, 2000 to December 31, 2003 the rate is 4%, and, after that rate will be determined annually by the Treasury Board. During each year of the elective service, the pay rate on which the calculation is based is the Regular Force rate of pay for the equivalent rank in the Reserve during the time served, provided you make your election within a year of the date of becoming a contributor to the Canadian Forces Superannuation Plan. Four percent simple interest is also added, calculated from the mid-point of each fiscal year of elective service to the first of the month in which you make the election.


  Of course when I go and buy this pensionable time under the new CFSA Part I.1 as of March 1st we will be charge 7% Compound Interest.

  This doesn't effect us old guys with lots of Class "A" Time too much, but those 1400+ on Class "B" Service it could be expensive.

  I asked about this at the last town hall meeting, and this was the response I got

http://armyapp.forces.gc.ca/Army/forum/topic.asp?TOPIC_ID=110
_____________________________

There are a number of reasons for the shift in election costs. First, most pension plans that allow electing prior service are moving towards a more actuarial cost for making those elections. The new methodology to be used moves the CFSA one small step in that direction (the true actuarial cost will be much higher than what members will have to pay). The second reason involves a give and take in deliberations with TB. Remember, the crown only committed to a Reserve Pension Plan in 1999. Hence TB’s position was that Reservists who come under the pension plan should only be able to elect time from that date onward. TB also had great concern about the reliability of data prior to 1999. The Department took the position that Reserve Force members should be able to elect all prior service with no restriction similar to Reserve Force members joining the Regular Force. The government’s share of the accrued liability for elective service (unlimited buy-back) under our proposed methodology is 175M. TB was not prepared to support unlimited buy-back of elective service using existing rules due to the prohibitive accrued liabilities it would have to assume.

Maj D.G. Day
________________________________

Of course when I explain that I could do a CT to the Reg and can the same pensionable time cheaper I get blown off and I don't get an answer

 

[geo]

Charlesm
A whole bunch of us will be going over the final details shortly.
Do we have grounds for grievance?  I sure think so.
It would appear that the 7% compound is an attempt to claw back some of that retirement gratuity we were all entitled to under the old rules.  Official position being that because we will benefit from one side.... they can offset some of the difference by making us pay more for the buyback...

Rifleman62 has provided a stack of references going back some 30 years with which we can document our grievances...... but, like everything else, this will take time.

 

[dapaterson]

... I feel like I'm channelling the spirit of Brent Spiner...

CharlesM:

Keep in mind that buying back service upon a CT would be credited at a different rate; the old system was based on 1:4 (an estimate) where this will be based on actual days worked.  For those who parade regularly, the new rules are somewhat better.  In addition, each day of class A service will be credited toward 1.4 days of calendar time counting towards benefits, another way to help out class A reservists.

An example:  If in 2003 you paraded 60 days class A and did a 70 day class B, under a CT you'd be credited for 91 days of service - since the class B was under 90 days, it doesn't count one for one; you get the whole year at 1:4.  Under the new rules, you'd be buying back 130 days, and get time credit for 60 x 1.4 days (class A plus 70 days class B, or 154 days.  Add up those extra days over a long period of service, and the different in benefits may be significant.

I do agree that it pretty much sucks paying 7% compound vice 4% simple interest.

And for the record:  I am one of the 1400+ (a gross underestimate, I think).  In my spare time I've been putting together a buyback cost estimator; I'll post it here once it's a little more polished (this weekend, I hope).

 

[54/102 CEF]

The 175 Million referred to above sounds to me like 2000 long termers who may have a lot of Class B.

I figure its 2000 x $800K they have to put in for each one. I seem to remember a figure of you put in $1 - they put in $4.7. But you still have to find your share. Given that many raise families and have real costs - it can be difficult to make the RRSP payments to the max every year - but one way or the other you still have to get your part to contribute.

As for redresses its probable that this will be opened up on the first pay deduction with no real information. So go Nuclear right away - write the Minister direct. Only 2000 ticked off wives will get their attention. Look at the recent blip about troops lost in Afghanistan and mortgages. The DAG system blew that one big time. These pers policies are put together by a committee - the old saw about a camel being a horse designed by committee applies. Not all pers policies are bad but all should be held to accountabilty - transparency. It should be very clear to the unschooled that its a fair policy. If something smells - then it should be referred to an independant arbitrator - and I'll go on record that the CF Grievance Board can, if it has all the facts, be pretty insightful.  If they say it has a concern - thats a code for an opening to improve things in your favour. But a grievance can drag out for 3 years, I put one in in Jan 04 and its just gone the 2nd time around at the Grievance Board. Lets not forget that the LAST thing DND needs is a policy that is not seen to be fair by all.

As for doing you a freebie on contributions - your freebie is the 80% that the taxpayer contributes. I suspect that most lenders will see that as a very good bet for the remainder.

 

[Haggis]

And for the record:  I am one of the 1400+ (a gross underestimate, I think).  In my spare time I've been putting together a buyback cost estimator; I'll post it here once it's a little more polished (this weekend, I hope).

I still believe this is all smoke and mirrors for anyone with significant years of service.  As I posted back in reply 238, if you are an old-timer who can afford to buy into the Reserve pension plan, you probably don't need it.  If you're an old timer who cannot afford it (for whatever reason), then you're gonna be SOL.

Thanks for coming out.  Turn in your watch to the RQ.

 

[geo]

Haggis,

Obviously, you and I have been jaded by the same source...............

 

[Haggis]

Haggis,

Obviously, you and I have been jaded by the same source...............

NDHQ?  ;D

My take is that when the time comes, your calculation will be based on "available data" and presented to you as "Here, ya go, gramps.  Look it over and sign at the bottom.  What?? You don't like it?  You don't agree with it?  Well, we did the math for ya and that's what you get and that's what it'll cost.  Now, back of the line, buddy.  We'll sort you out later.  Oh, and your deductions begin on the next paycheque.  Next....?"

 

[charlesm]

If anyone is looking for a service buyback estimator here is the federal government one.

http://compensation.pwgsc.gc.ca/pbc_prod/escc-disclaimer-e.jsp


Other than the Interest is done at 4% SI. It still gives a good idea of how much it might cost to buyback your pension.

For example for me to buyback 22 years of Service with an annual wage of $12,000 (I wish) it would cost me $20,543.29

It should cost me a lot less to buy back because I never earned that much in the 80's or 90's.

 

[54/102 CEF]

As I posted back in reply 238, if you are an old-timer who can afford to buy into the Reserve pension plan, you probably don't need it. 

Ok - Pick your pension

A - An oldtimer RRSP and Reserve gratuity = 150K  ---- this is where your cheque comes from

B - Reserve Pension for long time pers - you'll get  your 150K + plus their 705K (1-4.7 I mentioned earlier) = 855K in your account

Whoever said that you don't need it if you can afford to buy back was not doing anyone any favours. And its no shot at you as you never said it first.

 

[Rifleman62]

A couple of points.

First of all, I hope, that I personally, will not have to pay for DNDs' ineptitude, and the years of  proven failure of very senior CF leadership to do their duty of caring for the welfare of soldiers. The Reserve Pension should have been enacted in 1992 when the part time Public Service got retroactive access. It was not. The CDS himself knew this, yet foot dragging continued.

The Reserve Pension buy back is FF - Fatality Flawed, or FFF Fatality F****** Flawed.

In my letter to the VCDS I quoted the following CANFORGEN and asked the rhetoric question  - Has this policy changed?  - ADM (PER) 068/97 CANFORGEN 102/97 291455Z OCT 97,  while not on the subject of pensions, rather restricted release policy, states at Para 3:  “The MND, CDS, and ADM(PER) have made it quite clear that indiv mbrs of the CF will not suffer as result of poor administration or bad advice of either the chain of command or NDHQ directorates.”. 

The following newspaper heading is interesting: Relocation contract trips over faulty logic. Treasury Board explanation leaves MPs incredulous. The mystery that stymied MPs for weeks over how incorrect information got into the bid documents for the federal government's $ 1- billion relocation contract was resolved when Treasury Board bureaucrats sheepishly admitted it was a case of faulty logic.

I agree that the 7% compound interest is an attempt by DND to recover some of the benefit of the RFRG from individuals.

This goes to Treasury Board today for final approval. Based on my letter to the VCDS, do you think that senior CF leadership intervened, and said this 7% compound interst is punitive and should be reversed?  Not likely, although they had almost two months to reconsider.

I went through the chain of command, as I was asked to. My letter was held up until recently at LFWA HQ by the COS, as he made the decision that my letter had been over come by events re the two recent CANFORGENS on the Reserve Pension.

Once I see the regulations, which I am sure will include 7% compound interest, I will immediately launch a Redress of Grievance, with a maximum of 60 days for a reply. Concurrently, (good Battle Procedure) I will cc the letter to the Prime Minister, Minister of National Defence, and the President of the Treasury Board. This will kill the Redress, but others will redress. But, others should also cc their Redress. Let them know we are damn mad, and will not put up with this. There is a general election in the air.

The Reserve community was to be consulted WRT the pension process. It was not.

 

[dapaterson]

OK Folks:

I've tried to reverse-engineer the pension information from the information available on the CFPMP website to enable folks to figure out how much it will cost them to buy back their service for pension purposes, and indicate whether you should be enrolled in the part-time or full-time plan.  I can provide no guarantees of correctness or completeness.  With that out of the way, here's what I've put together:

The attached spreadsheet (in Excel format, ZIPPed), permits you to input your rank for every year from 1972 through the present, input the number of days worked class A, B and C in that year, then estimates your pay for each year, and what your estimated contributions will be for each year, including the 7% compound interest.  It will also determine whether you should be enrolled in the part-time plan or the full-time plan (part I.1 or part I).

There are many limitations to this spreadsheet:  It uses an average pay for each rank, not actual IPC levels.  The "Wage Index" that is used to translate old earnings into current earnings was only available on the website from 1993 through the present; the data from 1972 through 1992 is based on my rough estimate and may be well off compared to the actuals.

All those caveats out of the way, this should give you a rough idea of what it will cost for you to buy back your Reserve service.  And the more adventurous Excel users out there can examine my (at times) convoluted logic and try their own hand at cleaning it up.

Hope this is of some use to you folks; remember, if these calculations differ from later, official calculations by the good folks at the pension office, I'd take their figures as correct.


*** EDIT: I have removed the file as I have posted an updated version further down this thread.  My token attempt at version control.

 

[geo]

Thank you very much DAP
giving it a boo as we speak....
Ouch!!!

(still looking at filing a grievance on that 7% thing...
Politicians who contribute to the greenhouse effect and get off on 4% simple - while we get soaked for 7% compound... outrageous IMHO.

Now to try and figure out what the pension plan will bring me under the plan.......

 

[dapaterson]

Geo:  The "What will my benefits be" question is what I'm hoping to add when I next get some free time...  in fact, I may try a few things later tis week, and possibly get a "version 2" posted next weekend.  No promises on timelines, though...

 

[Rifleman62]

Att is the Wage Index 1960 to 2006.

 

[dapaterson]

Rifleman62: Many thanks for the Wage Index information.  Find attached the latest iteration of the file, which now attempts to estimate benefits as of 31 December 2006.  Again, no guarantees of accuracy, but I think it's reasonably accurate.

Note that the spradsheet only goes back as far as 1972, since that gives 35 years of buyback; it's also the earliest set of pay tables I could find.

Comments, questions, concerns, and generic insults are all welcome - my email address is in my profile and in the spreadsheet.  (Well, one email address, at least...)

 

[Nfld Sapper]

Wouldn't IPC come into play with the pension calculations?

 

[dapaterson]

Nfld_Sapper:

Yes, IPC comes into play.  As does holding two different ranks in the same year.  As do some years where different pay scales were in effect for different time frames.  As do...

Well, you get the idea.

But including that level of detail in the calculations is more work than I have free time... and really, gains not that much.  If you've been a streamer throughout your career, never at a rank longer than you needed to be before being promoted, then the earnings will probably be overstated.  if you've been at the same rank for 13 years, your earnings will be understated.  But it will give a big hand, small map indication of how much it will cost to buy back your service.  I'm not promising fidelity to the last cent; I'm offering an overview of how much it will cost.

This is a quick and dirty estimate - it's not 100%.  But it does the raw and dirty math and should be within 10% of the actual cost for buying back your service (in fact, I'll be interested to learn after the fact how well it predicted the amounts).

I originally put it together for myself, then expanded it (and cleaned it up) so others could use it as well.

Alternatively, you can wait for whatever the CFPMP office puts out.  I have idea what that will be, or when it will be.