The following information will answer your questions as to what happens when a plan member under the public service pension plan continues to work past age 65.

You may want to know…

• Do you continue to contribute to the public service pension plan after age 65?
• How are public service pension plan benefits coordinated with the Canada Pension Plan (CPP) or the Quebec Pension Plan (QPP)?
• If you begin receiving retirement benefits from CPP or QPP, will your contributions under the public service pension plan change?
• If you continue to work past age 65 and you retire at age 71, is your pension calculated using the same formula as for a plan member retiring at an earlier age?
• Is there a co-relation between the amount of retirement benefits payable under the CPP or QPP and the adjustment to your public service pension at age 65?
• Are you still covered by the Supplementary Death Benefit provisions after age 65?
• What happens if you become employed or re-employed in the federal public service past age 71?
• What happens to your Public Service Health Care Plan (PSHCP) and Public Service Dental Care Plan (PSDCP) coverage if you work past age 65?
• Will you still be covered by the Disability Plan or the Long-Term Disability Insurance Plan after age 65?
• How is your coverage under the Public Service Management Insurance Plan (PSMIP) affected if you continue to work after age 65?

Do you continue to contribute to the public service pension plan after age 65?

Yes. If you continue to be employed in the federal public service you must continue contributing under the plan until your retirement date, or to the end of the calendar year in which you reach age 71. The salary and service accrued after age 71 will not be included in the calculation of your pension.

Even after you reach the maximum of 35 years of pensionable service, you continue contributing but at a lower rate. When you reach the maximum of 35 years of pensionable service, your public service pension plan contribution rate reduces to one percent of your salary. This lower contribution amount ensures your future pension is fully protected from inflation. Although you will not accrue additional years of pensionable service after reaching 35 years, the salary paid to you during this period may be used in the calculation of the best consecutive 5-year average salary on which your pension will be based.

How are public service pension plan benefits coordinated with the Canada Pension Plan (CPP) or the Quebec Pension Plan (QPP)?

The public service pension plan is coordinated with the Canada Pension Plan (CPP) or Quebec Pension Plan (QPP). Your public service pension benefits include a lifetime pension and a temporary bridge benefit (previously referred to as the CPP/QPP reduction) which is payable until the first of the month following your 65^th birthday, or immediately when you begin to draw disability benefits. If you are still working at age 65, the bridge benefit will not be paid upon retirement. Please see Reaching age 65 for more information about the coordination between the plans.

If you begin receiving retirement benefits from CPP or QPP, will your contributions under the public service pension plan change?

No. Your contributions will not change. Your contributions under the public service pension plan are not dependant upon whether you pay CPP or QPP contributions or whether you are in receipt of CPP or QPP benefits.

If you continue to work past age 65 and you retire at age 71, is your pension calculated using the same formula as for a plan member retiring at an earlier age?

Yes. Your public service pension will be calculated using the same basic formula:

Lifetime pension

When you retire, you will receive a lifetime pension. Your annual lifetime pension is based on your average salary and years of pensionable service, as follows:

Note: If your pension includes part-time service, the benefits are adjusted to reflect the part-time assigned hours of work compared to the full-time hours of the position.

¹ This percentage applies if you will reach age 65 in 2012 or later, i.e. you were born in 1947 or later. The percentages if you were born before 1947 are indicated below:

• Before 1943: 1.3%
• 1943: 1.315%
• 1944: 1.330%
• 1945: 1.345%
• 1946: 1.360%

² This value, set by the Canada Pension Plan, is the average maximum pensionable earnings for your year of retirement.

Bridge benefit

Plan members who retire at age 65 or after do not receive the bridge benefit.

³ This percentage applies if you will reach age 65 in 2012 or later, i.e. you were born in 1947 or later. The percentages if you were born before 1947 are indicated below:

• Before 1943: 0.700%
• 1943: 0.685%
• 1944: 0.670%
• 1945: 0.655%
• 1946: 0.640%

Is there a co-relation between the amount of retirement benefits payable under the CPP or QPP and the adjustment to your public service pension at age 65?

No. Despite the coordination between the plans, the public service pension plan and the CPP or QPP are separate plans. The benefits provisions of each plan are different and the benefit amount is calculated independently of each other. The formula for the bridge benefit portion of your public service pension is the same whether or not you pay CPP or QPP contributions or receive CPP or QPP benefits. The bridge benefit calculation and the stop date are based on the fact that during your pensionable service you paid a lower rate of contributions under the public service pension plan on the salaries for which you were required to pay CPP or QPP contributions. For further information on the coordination of these plans, please consult The coordination of the public service pension plan with the Canada Pension Plan or the Quebec Pension Plan.

Are you still covered by the Supplementary Death Benefit provisions after age 65?

Yes. You will continue to be covered by the Supplementary Death Benefit provisions. This life insurance is equal to twice your annual salary, payable to your designated beneficiary or to your estate upon your death. The coverage decreases by 10 per cent each year starting at age 66 to a minimum of $10,000 by age 75. If you are still employed in the public service past age 65, the minimum coverage is the greater of $10,000 or one third (1/3) of your annual salary. After you reach age 66, your contributions will decrease as your coverage declines.

What happens if you become employed or re-employed in the federal public service past age 71?

If you become employed or re-employed in the public service past age 71, you cannot contribute to the public service pension plan after the end of the calendar year in which you reach age 71. If you have already retired and begin working again after age 71, your monthly pension (including indexing) will temporarily cease to be paid and it will be reinstated once you stop working. Please see Re-employment After Retirement for more details.

What happens to your Public Service Health Care Plan (PSHCP) and Public Service Dental Care Plan (PSDCP) coverage if you work past age 65?

There are no age restrictions on participation under either the PSHCP or the PSDCP. As long as you remain employed, you can retain your coverage as an employee under both plans.

Will you still be covered by the Disability Plan or the Long-Term Disability Insurance Plan after age 65?

No. The Disability Plan and the Long-Term Disability Insurance Plan are not available after age 65.

How is your coverage under the Public Service Management Insurance Plan (PSMIP) affected if you continue to work after age 65?

If you are entitled to PSMIP life insurance, you may retain your coverage as long as you continue working in the federal public service. However, coverage for basic and supplementary life insurance will be reduced at a rate of 10 per cent per year starting at age 66 to a minimum of no less than 10 per cent of your adjusted annual salary.

The age-related reduction at age 66 does not apply if you are entitled to employer-paid basic life insurance. Once you decide to retire, coverage may be converted to a private life insurance contract through arrangements you can make with the insurer, Industrial Alliance (www).