Legislative Amendments to the PPMP
Changes to your public-sector pension plan
On 11 May 2017, the
Act to foster the financial health and sustainability of the Pension Plan of Management Personnel and to amend various legislative provisions was assented to.
The amendments to the Pension Plan for Management Personnel (PPMP) are presented below.
Maximum number of years of service used to calculate a retirement pension
Effective date: 1 January 2017
Beginning on 1 January 2017, the maximum number of years of service used to calculate a retirement pension will gradually increase from 38 to 40 years of service as at 31 December 2018. The maximum basic pension you can receive will increase from 76% to 80% of your average pensionable salary.
Important:
- If, on 31 December 2016, you had 38 years of credited service, you will begin contributing to your plan again on 1 January 2017. However, the total service credited for years prior 1 January 2017 cannot exceed 38 years of service.
Eligibility requirements for an unreduced immediate pension
Effective date: 1 July 2019
These requirements have been amended for members who completed their additional participation period, if required.
| Before the legislative amendments | After the legislative amendments |
|---|
| You had to be 60 or over. | You have to be 61 or over. |
| You had to be 55 or over and meet the 90 factor requirement (age + years of service for eligibility purposes). | You have to be 56 or over and have 35 years of service for eligibility purposes. |
| | You have to be 58 or over and meet the 90 factor requirement (age + years of service for eligibility purposes). |
These requirements will apply if you cease all employment under the plan after 1 July 2019.
Please note that the requirements will vary if you have not completed the additional participation period, if required.
Calculation of the average pensionable salary
Effective date: 1 July 2019
We will calculate your pension using the average pensionable salary for your 5 best paid years instead of your 3 best-paid years, regardless of whether you completed the additional participation period.
If you are entitled to an immediate pension, we will calculate it as described above if you cease all employment under the plan after 1 July 2019.
If you are entitled to a deferred pension, we will calculate it as described above if your pension takes effect after 1 July 2019.
Reduction due to early payment of an immediate pension
Effective date: 1 July 2019
The annual reduction due to early payment of a reduced immediate pension will increase from 4% to 6%.
This reduction will apply if you completed the additional participation period (if required) and you cease all employment under the plan after 1 July 2019.
Progressive retirement
Effective date: 8 February 2017
There is no measure to maintain the provisions in effect (prior to the legislative amendments) with regard to progressive retirement agreements ending after 30 June 2019.
However, transitional measures are in place for a progressive retirement agreement that began before 8 February 2017. You can:
- postpone the end date of your progressive retirement agreement;OR
- continue to work after the agreement ends.
To take advantage of either of these measures, you must notify your employer
in writing at least 12 months before your agreement ends. Your employer must respect your choice.
If your agreement ends in less than 12 months and you would like to take advantage of either of the measures, you must obtain your employer's written authorization
before the agreement ends.
Note that if your qualification period under the
PPMP began after 31 December 2012 but you have not yet completed your additional participation period when you cease to be a plan member, a
legislative amendment that was passed in June 2016 applies.
Indexation of the retirement pension and additional pensions [1]
Effective date: 11 May 2017
Indexation of additional pensions will be suspended for a six-year period, beginning in either 2018 or 2021, as applicable.
The suspension applies for 2018 through 2023 if you are:
- entitled to an immediate pension and ceased all employment under the plan
before 1 January 2017;OR
- entitled to a deferred pension that takes effect
before 1 January 2017.
The suspension applies for 2021 through 2026 if you are:
- entitled to an immediate pension and ceased all employment under the plan
after 31 December 2016 but before 1 July 2019;OR
- entitled to a deferred pension that takes effect
after 31 December 2016 but before 1 July 2019.
The suspension also applies to a surviving spouse's pension and a reduced immediate pension not yet in payment. In addition, it applies to retirees under the
PPMP who return to work or are taking advantage of progressive retirement and whose retirement pension has been partially or totally suspended. Lastly, it applies to employees who initially received a pension payable under the Government and Public Employees Retirement Plan for non-unionized employees (RREGOP 02).
For all retirement pensions subject to the 6-year suspension, indexation for each period of service resumes
after the suspension as follows:
| Period of service | Indexation rate |
|---|
| Years of service before 1 July 1982 | 50% of the PI |
| Years of service from 1 July 1982 to 31 December 1999 | PI minus 3% |
| Years of service since 1 January 2000 | PI minus 3% or 50% of the PI, whichever is greater |
For additional pensions subject to the 6-year suspension, indexation resumes after the suspension at the PI minus 3%.
Indexation is not suspended and the indexation rates do not change if you are entitled to:
- an immediate pension and you cease all employment under the plan after 30 June 2019;
- a deferred pension that takes effect after 30 June 2019;
- the portion of your retirement pension resulting from years of service transferred from the Teachers Pension Plan (TPP) or the Civil Service Superannuation Plan (CSSP);
- a pension credit from a supplemental pension plan;
- a transfer agreement pension credit;
- a buy-back pension credit;
- additional pensions paid further to a pension buy-back credit granted under the
TPP or the CSSP.
Indexation and actuarial value
Effective date: 8 February 2017
If certain conditions are met, the actuarial value of the following benefits takes into account the amendments to the legislative provisions described above:
- a deferred pension transferred to an
LIRA or LIF
- a disability benefit
- a terminal illness benefit while you are entitled to a deferred pension
- a death benefit for an individual who would have been entitled to a deferred pension on the date of his or her death.
If your application for benefits is received between 8 February 2017 and 30 June 2019 or the death occurred during that period, the actuarial value of the benefit will take into account the indexation amendments.
If your application for benefits is received after 1 July 2019 or the death occurred after that date, the actuarial value of the benefit will take into account the amendments to the early-payment reduction rate and the calculation of the average pensionable salary.
Partition of family patrimony
Effective date: 8 February 2017
During partition of the family patrimony, if your application for a statement of benefits is received between 8 February 2017 and 30 June 2019, the actuarial value of the benefits that you have accrued under the plan and that are used to determine the amounts allocated to your
spouse is decreased to take into account the indexation-related amendments.
Consequently, the partition-related reduction that will apply to your benefit will take into account the indexation-related amendments if your benefit takes effect between 8 February 2017 and 30 June 2019. If your benefit takes effect after 30 June 2019, the partition-related reduction will be recalculated without taking into account the indexation-related amendments.
These provisions do not apply if you are retired on the date the benefits are valuated.
Effective date: 11 May 2017
If your application for a statement of benefits is received after 30 June 2019 and you are not retired on the date the benefits are valuated, the value of the benefits will be determined using the new pension eligibility requirements and the average pensionable salary calculation method, even if the benefits valuation date is before 1 July 2019.
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Note 1The suspension of indexation and subsequent changes to the applicable indexation rates do not apply to certain portions of pensions. For more information, you can consult the relevant provisions of your pension plan or contact
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