WFA Answers: Pensions
- If a position is declared surplus and the incumbent is between 55 and 59, is the employee entitled to both a pension waiver and the TSM payment if opting for Category B or is it one or the other?
Yes, if you opt for the TSM, you are entitled to both, as they are separate entitlements (the TSM is pursuant to the collective agreement, while the pension penalty waiver is pursuant to legislation).
- If I am surplused at 52 with 30 years service, will I receive my pension at age 55 without penalties, or do I have to wait until age 60? My understanding is that, once under WFA, all penalties are waived in order to receive pension benefits at age 55 rather than age 60.
The waiver only applies in certain circumstances. If you are declared surplus and not provided with a guarantee of a reasonable job offer, you may be eligible for the waiver if you choose the Transition Support Measure or are laid off.
- Can TSM, severance or other payments be rolled directly into registered retirement plans without penalty? Do your normal contribution limits apply? Will tax waivers be available for these payments?
Individual employees can use personal unused RRSP room. For example, if an individual has $20,000 of unused RRSP room, and they receive a cash payment of $20,000, then the employer will not withhold income tax on the $20,000.
Members should consult the latest Canada Revenue Agency Income Tax Interpretation Bulletin on severance pay (Retiring Allowances) for complete details.
- Why is pension penalty waiver not offered to employees opting to take Option B (Education Allowance)?
This is in accordance with the regulations in place, which are pursuant to the Public Service Superannuation Act.
According to this criteria, “employees who receive an educational allowance pursuant to the… WFAA will NOT be considered to have “involuntarily ceased to be employed” “ and are therefore not eligible for the waiver.
This is not something that is subject to negotiations between the union and the employer.
- There is mention of pension waivers for those employees aged 55-59 what about those over 50 but not 55 who have in excess of 30 years service? Will there be any consideration to waive the age penalty?
At this time, there is no penalty waiver available for those between 50 and 55, nor have we heard of any plans for the government to do so.
- Do you have to be 55 years old on the date you receive the surplus letter to be eligible for the pension reduction waiver, or at the time of termination?
You would have to be 55 at the time of retirement.
- If there is any lump sum payment, is it pensionable? With education leave and the benefits that one is entitled to, does that include additional pension entitlements such as 2% per year?
In accordance with the provisions of the Public Service Superannuation Act and Regulations (PSSA), the transitional support measure and education allowance are not considered as pensionable earnings.
If you choose Option C, education leave, you can either resign or go on leave without pay for two years while going to school. While on leave without pay, you could continue to contribute to your pension as long as you pay both your share and the employer’s share.
For more information see PSAC’s WFA & Retirement page or Public Works and Government Services Canada’s Waiver Reduction Eligibility page. Also, the PSAC handbook “Retiring from the Public Service of Canada: Some Useful Tips.”