Due to the co-ordination of contributions and benefits under the public service pension plan and the Canada Pension Plan (CPP) / Quebec Pension Plan (QPP), your pension under the public service pension benefits are reduced automatically by a standard formula once you reach age 65, or immediately when you begin to draw disability benefits at any age. The following information is intended to help you understand the reduction in your pension under the public service pension plan in relation to the CPP/QPP co-ordination.

You may want to know…

• Why are the contribution rates under the public service pension plan co-ordinated with those under the CPP/QPP?
• When will your pension under the public service pension plan be reduced?
• Does the reduction date of your pension under the public service pension plan change if you choose to receive your CPP/QPP benefit at an age other than 65?
• What is the formula for calculating the reduction of your pension under the public service pension plan?
• Is the indexing payable on your pension affected by the co-ordination with the CPP/QPP?
• Is the pension benefit payable to your survivors affected by the co-ordination with the CPP/QPP?
• What happens when Quebec residents reach the age of 65 in relation to Régie de l'assurance maladie du Québec (RAMQ) coverage?

Why are the contribution rates under the public service pension plan co-ordinated with those under the CPP/QPP?
When the CPP and the QPP were introduced on January 1, 1966, the federal government decided to co-ordinate the contributions and benefits under the public service pension plan with the contributions under the CPP/ QPP, rather than stacking them. This means that you have contributed to the public service pension plan at a reduced rate for your pensionable service since January 1, 1966 to take into account that you were also contributing to the CPP/QPP . Your pension under the public service pension plan is therefore reduced to reflect the number of years during which you contributed at the reduced rate. For more information, consult The Co-ordination of the public service pension plan with the Canada Pension Plan or Quebec Pension Plan.

When will your pension under the public service pension plan be reduced?
Your pension under the public service pension plan will be reduced on the first of the month following your 65th birthday, regardless of whether or not you are receiving benefits under the CPP/QPP. If you begin receiving a CPP/QPP disability pension before age 65, your pension under the public service pension plan will be reduced immediately. It is your responsibility to inform the Public Service Pension Centre immediately if you start to receive a disability benefit under the CPP/QPP, otherwise you will be required to repay any overpayments.

Does the reduction date of your pension under the public service pension plan change if you choose to receive your CPP/QPP benefit at an age other than 65?
Receipt of early or deferred CPP/QPP benefits will not change the date on which your pension under the public service pension plan will be reduced, nor will it change the amount of your reduction. Your pension under the public service pension plan will still be reduced on the first of the month following your 65th birthday or on the date that you become entitled to a CPP/QPP disability pension.

What is the formula for calculating the reduction in your pension under the public service pension plan?
At age 65 (or earlier if you are entitled to a CPP/QPP disability benefit), your pension under the public service pension plan reduction is calculated using the following method:

Once the amount of the reduction is calculated, it is then deducted from the pension under the public service pension plan you had before age 65. The reduction factor applicable to your pension is determined by the year you turn age 65. If you turned age 65 before 2008, then the reduction factor is 0.7%. If you turn age 65 in 2008 or after, then the reduction factor will be between 0.685% and 0.625%. The lower the reduction factor, the smaller your pension reduction will be. Reduction factor applied to your pension when you reach age 65

Refer to the Reduction Factor Table for further information concerning the incremental improvements to the reduction factor.

Is the indexing payable on your pension affected by the co-ordination with the CPP/QPP?
As the indexing payable on your pension under the public service pension plan is directly related to the amount of your basic pension, any reduction in your basic pension results in a corresponding reduction in the indexing payable.

Is the pension benefit payable to your survivors affected by the co-ordination with the CPP/QPP:)?
Survivors' pensions are not subject to this reduction. A survivor benefit is normally equal to half of your basic pension entitlement, that is, half of your pension calculated before it is reduced. Your survivor can receive survivor benefits under the CPP /QPP and also receive a full survivor benefit under the public service pension plan.

What happens when Quebec residents reach the age of 65 in relation to Régie de l'assurance maladie du Québec (RAMQ) coverage?

When Quebec residents reach the age of 65 they are automatically covered under the drug insurance plan of the Régie de l'assurance maladie du Québec (RAMQ) (www). They do not have to contact the Régie to register. However, a member can choose to be covered by both RAMQ and the PSHCP.

For further information on coverage under the RAMQ plan or to find out how to cancel your enrolment in this plan, please visit the Régie de l'assurance maladie du Québec (RAMQ)  (www) site.