A pension waiver is a program that allows someone who resigns or is laid off because of work force adjustment (WFA) prior to their normal retirement age (60 or 65) to receive an unadjusted pension benefit. In normal circumstances, a pension plan member who retires before their normal retirement age will incur a pension adjustment of five percent per year. This reduces the value of the pension to account for the longer benefit period. With a waiver, this adjustment is not applied – meaning a recipient obtains the full value of the pension upon retirement.
To be considered for a waiver of the pension reduction under the public service pension plan (referred to as ‘plan’), the member must:
- have retired involuntarily;
- If the person became a plan member before January 1, 2013, they must be at least 55 years old at the end of their employment.
- If the person became a plan member on or after January 1, 2013, they must be at least 60 years old at the end of their employment.
- have been employed in the public service for a period or periods totaling at least 10 years, with at least two years of pensionable service.
An involuntary retirement occurs when:
An indeterminate employee resigns or is laid-off due to a WFA or an employment transition because of:
- a lack of work,
- the discontinuance of a function,
- a relocation of a work unit in which the employee does not wish to relocate, or
- an alternative delivery initiative.
An indeterminate employee who is not affected by the WFA but is willing to leave employment in the place of an affected employee can be considered for a pension waiver. The alternate needs to meet the same other criteria than the affected employee.
In addition to the above mentioned, the following conditions also apply for the retirement to be considered involuntary:
- The member must not have received a guarantee of a reasonable job offer, as defined in the applicable WFA.
- The member must not have received an education allowance under a WFA.
The Deputy Head or the delegated authority must confirm an employee meets the criteria for a pension waiver and then make the request to the Pension Centre.
This waiver is not an entitlement within the WFA provisions of the collective agreement, and questions about the waiver should be directed to your Compensation Advisor, your manager and/or the Public Service Pension Centre at 1-800-561-7930.
More information can be found below:
- Group 1 (retirement at 60): Pension Eligibility at Age 60 - Workforce Adjustment and Pension Waivers - Canada.ca
- Group 2 (retirement at 65): https://www.canada.ca/en/treasury-board-secretariat/services/pension-plan/plan-information/pension-eligibility-age-65-workforce-adjustment-pension-waivers.html