Reserve Pension- Merged

[George Wallace]

Not being a Fin Clerk/RMS Clerk or any real financial wizard I would say that your big mistake was probably recieving the bad advice that some in Cornwalis gave to the new Recruits, to pay off their Previous Service at such a low rate, and not mentioning the fact that it was like a "Loan Payment".  If you calculate what your $6 payment has been over all these years, and had it in your pocket, it would be like winning the million.  As you raise in rank, your amount due increases.  I paid back my years (for over Six years Res and 1 and a half years Reg Previous Service) at $100/ month at a Ptes Rate and had it paid off in a couple of years.  Now years later, it is time to collect. 

If you still have payments due on buying back your time, try to increase them and get them over with.  I have recommended to all my guys in similar instances to bite the bullet for a while and pay off that time ASAP and get it over with.  It truly is like a Loan Payment and can become quite expensive in the end.

 

[George Wallace]

After my 20 , how will that effect my pension?

More time added, more $$

I will tell them to take it off my pay raise and end this nonsense.

Thanks by the way!

As Michael O"Leary posted, except you'll be paying back less dollars for it.

As the Amount of Pension that is in discussion for the Reserves is a complicated matter, there must be a simpler way.  That is why I am wondering why the calculations can't be done from the wages earned as stated on T-4 Slips for Revenue Canada.  That would also have a commonality with buying back time when one joins the Regular Force, in that the calculations for what one pays to buy back that time would be taken also form T-4 Slips of ones Previous Service.  Get rid of two seperate Fin Systems and make them both more common, and equal.

GW

 

[turretmonster]

"turretmonster, I don't follow your logic.

I suspect the 1985 limit allows those with 20+ years Reserve service to buy back enough time served to be eligible for a pension based on thier most recent 20 years of service. How then, would this "exclude" them from the program? Also, how would this measure cause Reservists to limit their service to the ranks of Warrant Officer or Captain?"

When you joined the Regs, and some policy person drew a line in the sand for a date and said no P Res time before this date counts, and you had 12 years PRes time prior to that date, would it be fair? No.

My favorite WO joined in 1973. If they allow him to go back 20 years to 85, they have discounted his time by 12 years, which may not make him too happy. Now if 1322 pers are in that boat, you have a large percenatge of the P Res getting the short end of the stick. If a mbr served 32 years, they should be able to elect for those 32 years.

If we assume that these 1322 pers are now the upper strata of the P Res and even 30% of them leave due to dissatisfaction with this pension, who is left and how does the Reserves absorb a hit of 400 Sn ppl leaving?


George, give us an example of your plan plse.


TM

 

[George Wallace]

Not being in the Pay Field, I may be taking an overly simplistic view at this, or but perhaps not.  I look at it this way.  Many of us have served long periods on different Classes of Callout.  I spent over six summers in Wainwright, Dundurn, Shilo, Aldershot, and Gagetown on Class A and only one summer in Aldershot on Class B.  My Class B was considered Full Time, while all those other summers on Class A was only 1/4 Time.  Do I feel ripped off?  YES, I do!

To simplify this confusing and sometimes unequal formula of calculating Time Served towards a Pension, I propose that the current system, mentioned here, be scrapped completely.  I would do away with that Twenty Year Clause (setting 1985 as the cut off date) and instead allow all Reserve Time to be claimed off of the Pay as indicated on one's T-4 slip.  Treasury Board and Revenue Canada issue serving members T-4 Slips for wages earned in Reserves as well as Regs.  Create a formula, similar to what they have to calculate your UI (EI) benefits, to create a reasonable payment system by which members can 'buy their Time' towards a Pension Plan.

That way if you wanted to claim 35 years you could, but you must remember that it could become very expensive, and for some not worthwhile, as they would have to pay more into the system than what they will be drawing out in the end.  There are exceptions to every rule, for instance, a very well off Snr NCO or Offr may be able to pay a humongous lump sum to buy back their time towards a pension and reek all the benefits.  Most others will buy back their time, towards a Pension, through Payroll Deductions.  The advice there is to consider it like a loan payment and pay it in as large an amount as you can, in as short a period as you can.  (This may be the reason that there was a 20 year cut off date - due to the expense on the member)  Remember, a Pte will not be paying as much as a MWO.  Your payments will be adjusted to your current rank, so if you are a MWO when you decide to buy back your Time, you will pay back all your time at the level of MWO.  That is why it is best to pay it back as quickly and as soon as you can at a lower rank.  Your end Pension is calculated on your last/best five years of service at whatever rank/Pay Scale you have in that five years.

The advice to buy back your Prev Service, towards your Pension, applies to the Regs just as much as to the Reserves.  Buy it back as soon as you can, and pay it off as fast as you can.  If you wait until you reach a higher rank, you are paying higher rates, in the end loosing a lot of cash, as you will receive the same Pension in the end as the guy who paid his time off as a Pte and retires after the same period of service and rank as you. 

I hopefully have provided something in these ramblings that makes some sense.

 

[turretmonster]

Merci George

I'm in the same boat but with many summers on A's in the 70's.

I think that using earnings could be a bit complex as most P Res will have multiple income streams amounting to that one figure on the CPP printout and breaking it down could be a nightmare. However, even if it was one income source, if I made 1200 dollars in 1977 as a trooper peeling spuds in TWP, does that mean I could buy back that whole year?

I think the payback of a baseline of 3 K per year is a way to not require mbrs to go through massive calculations. If I want to buy back 5 years of full time service, I guess I have to pony up 15K. If I want to buy back 20 its 60K. Paying back at current rank level would be impossible for anyone unless they won the lottery.

Now that opens the other pandoras box of severance packages vice gratuity.

Don't you wish someone actually knew what was going on and posted it?

TM

 

[Fishbone Jones]

I agree. Until the Reserve Pension plan criteria is release by the Treasury Board, we're just spinning our wheels with all this talk about buy backs, etc. Forwarned is forearmed, but I'm not making any plans until I see theirs. And with the way it's been stalled my expectaions are not great. :

 

[turretmonster]

My expectations are actually pretty good for the P Res.

If this turns into another combat bra fiasco, it won't be solved by giving each P Res 125 bucks to go buy their own.

However since this is an emotional issue near and dear to 16000 mbrs out there, they had better make this pension work or be prepared for the resulting fall out. Given the dependance of the whole trg system on the P Res, failure really isn't an option.

I'd just like the website that is suppose to feed the info updated since it's sat idle since May 03 and some real life sceanrios that fit the working stiff who plays army thursday night and the odd weekend added. The ones there now mean nothing to 95% of mbrs.

TB

 

[George Wallace]

Now you have touched on another sore point.  Now many on Class A parade one night a week and the odd weekend, but in my day we paraded two nights a week and every weekend, all considered 1/4 time.  It seems we paraded two to three times the amount that many parade today for equal credit.  No equality there, that is why I would like to have the T-4 amounts that reflected Pay included.  Why would a person who paraded once or twice a year be given the same credit as someone who paraded on a regular basis?  This is a problem with the implementation of any system.  Your idea of a 'Flat Fee' for all may be the simplest solution.  If one wants to buy a pension, one can; if one doesn't then they don't.....simple.

 

[Spr.Earl]

It is still scheduled for implementation in December of this year. From what I understand, Treasury Board has accepted that it go back as far as, I think, 1985 but the pension staff are going to ask that it go back further to include the 1322 members that the 1985 cut off year discludes. I also heard that if you want to buy back time, it will cost $3000 for 1 years worth of service. They are also looking at turning the gratuity into a severance package. That's all I know so far.

Thank's NMP,you mean that there is only 1,322 of us that pre date the 85 cut off?
When I went over seas my pay was judged by my time in,in 95 it was Cpl 4 and that was what I was paid at.
Re the Gratuity as a "gratuity into a severance package." can you elaborate please?

Oh NMP can I transfer my pension to my wife when I die?

Thanks for you help.

 

[Gunner]

All Reservists should view the attached link that discussion what the Reserve Pension Plan will look like.  It also outlines changes to the Regular Force Pension plan in case you have not been briefed by your units.

http://www.regions.cadets.ca/pac/support/pdf/PMP Oct 04_e.pdf

Note specifically the examples of Reservists serving at implementation.

For Spr Earl - What NMPeters was indicating was the Reserve Retirement Gratuity (3.5 days pay per year of service if you have between 10-20 years and 7 days pay per year of service if you have between 20-35 years) will be retermed a severance package vice retirement gratuity.  Regular Force members receive a similar severance package when they retire.  Your pension will be dependent on how much time you serve, how much you work (1 for 1 days for Cl B and C service, and 1/4 days for Cl A time).  I have no doubt that normal pension regulations will dictate that your wife will receive survivors benefits.

We are waiting to hear how the Reserve plan will be implemented, etc.  We have come a long way from when I joined....

 

[Long in the tooth]

I found out recently that class BC time only counts as full time service if it's over 90 days.  Out of 8 years working 70 or 80 days during the summer, I only get credit for 180 days of that time.  Kind of burns my a**, as I'll be retiring from the RegF in 5 years.  I'm losing over a year of pensionable service and no one had the knowledge or guts to tell me.

Caveat Emptor

 

[Gunner]

WOG (Worn out Grunt - always wondered what WOG stood for  )

Do you have any type of reference?  As I mentioned previously, I had always heard that Cl A was counted at 1/4 time but Cl B and C were counted 1 for 1.

Cheers

 

[Long in the tooth]

Respectfully, please wait out while I post a source.  I discovered this not long ago, thought I had more time.  I kept sending copies of my UER to Ottawa, and they said 90 days are required....
LOL 2 mos RCR counted as 0.  Gotta lov it.
2 Mos Airbourne counted as 0.  Gotta lov it.

But I'm not bitter.

When the new system is in place they had better look ahead.

 

[turretmonster]

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

Its under types of elective service.

TM

 

[bossi]

Well ... ya know ... personally, I'm not gonna hold my breath ... seeing as how this poor guy fought in WWII ... and is still getting the runaround ...
(and, as an aside, it's infuriating if one individual with an axe to grind was able to screw this guy ...)

Sun, March 27, 2005
Genuine hero still fighting
Pension now up to the defence minister
By Peter Worthington
http://www.canoe.ca/NewsStand/Columnists/Toronto/Peter_Worthington/2005/03/27/pf-973540.html

Readers of this column will remember the saga of Cliff Wenzel, who was denied a reduced military pension because it was "not in the public interest" that he transfer from active service in the Royal Canadian Air Force to the RCAF reserve.

This was in 1960, when Wenzel had spent 14 of his 20 years of service as a flight lieutenant, and felt his career was going nowhere.

In the RCAF reserve, he taught pilots to fly for another 10 years, until mandatory retirement. It was only relatively recently, under Access to Information legislation, that he discovered he was virtually the only officer denied a reduced pension because it was "not in the public interest."

Thus began his campaign to get the reduced pension re-instated.

What makes his case different is that Wenzel was a genuine hero and something of a legend in the RCAF. He earned a Distinguished Flying Cross in bomber command in World War II; an Air Force Cross flying in the Berlin Airlift; he flew against Communist insurgents in Malaya; and flew in the Korean war.

Four wars on behalf of Canada, yet switching to RCAF reserve was "not in the public interest."

Other officers got reduced pensions when they left the RCAF to go to school, work for government, or become lawyers or teachers. But not Wenzel.

Wenzel's lawyer, retired Col. Michel Drapeau, took his case to court, but the court declined to hear it because it was "out of time." So Wenzel appealed to a succession of defence ministers, (Bill Graham is now reviewing the case) and to various MPs and Veterans Affairs Canada.

Opposition leader Stephen Harper has responded "to the unfair and unjust treatment you have received from the government of Canada" and unleashed the Conservative defence critic, Gordon O'Connor, to present Wenzel's case to the Standing Committee on Defence in hopes that the government "will recognize your service and sacrifice to this country and give you what you so greatly deserve."

Liberal MP Pat O'Brien, Chair of the Standing Committee, has written Graham supporting Wenzel's case. When it was brought forward to the committee, however, MP Keith Martin (who ran for the leadership of the Canadian Alliance before switching to the Liberals, where he is parliamentary secretary to Bill Graham) opposed restoring Wenzel's reduced pension.

"It was brought to court and the court said he didn't have a case," Martin said.

In fact, the court said no such thing -- it said it would not hear the case because of the time lapse.

When Martin insisted the "letter of the law" be followed (hence the minister's review), chairman O'Brien insisted that the "spirit of the law" be fairly applied in Wenzel's case.

Conservative defence critic Gordon O'Connor argued on the principle involved and noted that when he left the RCAF, Wenzel immediately went into the air reserve and helped organize it and train a generation of pilots -- "which was certainly in the interests of the military."

But not, apparently, in the public interest.

What the Wenzel case indicates is that one RCAF personnel officer in 1960 resented Wenzel and had it in for him -- and this prejudice has been echoed ever since.

To let the injustice stand is a slap at every serving military person. One hopes Graham works out a compromise with Cliff Wenzel, and rights the wrong that was done him so long ago.

While to some this may seem a forlorn hope, I'd disagree -- especially in 2005, officially designated as the Year of Veteran.

There's much about Bill Graham that can be disputed, but he's always seemed a fair man who, if given the chance, makes up his own mind on the facts presented.

And that's all that Cliff Wenzel asks for.

 

[Spr.Earl]

Thank's Bossi

As to the 1300 + I'm one of them I know a quite few who go back to 73,74, and there are those who joined in the late seventies.
All those I know and including myself used to be Professional Militia Plug's in our youth and are still proud to serve in our chosen disciplines with in our Forces  

If they have a cut off date I think we the few "The Old Guard   ;D" so to speak should get some credit for pre 85.

As to how they judge service is it paid day's?,Date of enlistment?
The buy back I think it's fare as my own Provincial Plan charges $3,500 per year!

All's you have to do is take out a lone and pay for your years and it's a tax deduction !
It's the same as a RSP but under Pension Contributions which are Tax Decutible and you recieve it under the Pension Tax vs RSP Tax on retirement!
Also if this falls under reguler Tax laws you can also transfer RRSP funds over with out penelty to buy your years back plus it's a indexed Pension and Guranteed 

 

[bossi]

Personally, I feel it will be impossible for them to enforce their brainfart "cutoff" date.  Why?
Well, if somebody does a Component Transfer from Reserve to Reg Force, there's no cutoff date ...

And, if the argument is that they don't have accurate pay records ... we all know Revenue Canada can supply us with T4 slips dating back to Confederation ...

Thus, I'd even go one step further:  Keeping in mind the formula for full-time members is a percentage of their pay, then it should be possible to calculate this same percentage on previous fulltime reserve service
(i.e. presently they're suggesting members would buy back their time, but at their present rank ... which may be prohibitively expensive if somebody has had a couple of promotions during 20 years of service ...)

And, also keeping in mind that it's not as if they invest our pension contributions, and therefore they need to recover compounded interest, too ... it could prove to be much simpler in the end to have calculations similar to those found on income tax returns (i.e. a percentage, with minimums/maximums)

Otherwise, the administrative burden resulting from overly complex formulae could result in serious, even unreasonable workloads/delays ...

But, what do I know about mathematics ... ?

 

[Fishbone Jones]

Mark,

If I'm reading you right, I agree. I should be able to buy back my time based on my wage at the time.
ie: approx $7.50 a day (yes, your reading it right) cause lunch was supplied. Normally some sort of mystery stew that you peeled the potatoes and carrots for yourself (and the rest of the Regiment) 

 

[George Wallace]

And, if the argument is that they don't have accurate pay records ... we all know Revenue Canada can supply us with T4 slips dating back to Confederation ...

I was thinking along those lines earlier here.

(i.e. presently they're suggesting members would buy back their time, but at their present rank ... which may be prohibitively expensive if somebody has had a couple of promotions during 20 years of service ...)

Unfortunately for those who have gone on ahead, (Dave and I are a couple such cases), they have had to pay back in this manner.  To change it now would be very cost prohibitive, if earlier contributers petition for the same rights as you propose.  If a person was a Warrant under this (old) system and bought back his time at his current pay rate, how much would the Gov't have to refund him for overpayments, as he should pay only at a Pte rate under your new scheme?  That would seriously complicate the funding formulas and cause much consternation to the Pay Gods.

 

[bossi]

... Unfortunately for those who have gone on ahead, (Dave and I are a couple such cases), they have had to pay back in this manner.   To change it now would be very cost prohibitive, if earlier contributers petition for the same rights as you propose.   If a person was a Warrant under this (old) system and bought back his time at his current pay rate, how much would the Gov't have to refund him for overpayments, as he should pay only at a Pte rate under your new scheme?   That would seriously complicate the funding formulas and cause much consternation to the Pay Gods.

You're absolutely right - Dave's post brought it home - contributions made using Roman pecunia would have to be translated into modern day loonies ... and so, without going through intricate gyrations vis-a-vis actually translating/converting earlier contributions into present day values ... I guess the simplistic solution isn't the worst in the world.  Oh, well ... guess I'll have to scrape together some extra cash (... sigh ... and my days as a potential male escort service are long past ... so I guess I'll have to sell a kidney or something ... thank goodness I haven't worn them out ... like some people we know ... chuckle!)