Retirement & Pension Benefits

On retirement, a range of retirement income and benefits are available to employees. These include the Public Service Pension Plan, Canada Pension Plan (CPP), Old Age Security (OAS), personal Registered Retirement Savings Plans, retirement allowance and the 50% sick bank.

• The Public Service Pension Plan
• The Canadian Pension Plan
• RRSP
• Retirement Allowance

The Public Service Pension Plan

The Public Service Pension Plan of British Columbia is a defined benefit pension plan that provides designated employees in the provincial public sector with income at retirement.

The amount of retirement income is based on your age, years of pensionable service, and your salary level.

The plan is administered by the Pension Corporation. The Pension Corporation publishes a Plan Member Booklet which explains various benefits. It is recommended that you review this booklet to learn about your pension plan.

How to Enroll

Enrollment is compulsory for public sector employees who hold a regular position with an employer participating in the plan. Enrollment is actioned through payroll.

An auxiliary employee in a participating employer group with a gross salary — within a calendar year — equal to 50 per cent of the year’ s maximum pensionable earnings under the Canada Pension Plan is automatically enrolled in the plan.

Other auxiliary employees may elect to enroll after completing two years of continuous employment.

Once enrolled, you must continue to contribute to the plan even if your employment status changes, either from regular to auxiliary or from full-time to part-time.

At the point of entering or leaving the Public Service Pension Plan, it is important that you contact your personnel office to ensure you receive enrollment information, or details regarding your termination entitlements.

The Public Service Pension Plan has agreements with many other pension plans to recognize service, contributions and/or pension values, but only if contributions are left on deposit. You should contact the Pension Corporation well in advance of a planned change in employer to determine if an agreement is in place.

The Canada Pension Plan

The Canada Pension Plan (CPP) is designed to provide income to retired and disabled workers, and to orphans and surviving spouses of deceased contributors.

Participation is compulsory between the ages of 18 and 65, and the benefits are earnings-related.

Employee contributions are deducted from your paycheque and submitted to the Canada Customs and Revenue Agency (CCRA) along with an equal contribution made on your behalf by your employer.

The maximum contribution is based on the declared " Year’ s Maximum Pensionable Earnings" set by CCRA and adjusted annually.

Additional information about CPP is available from your local Canada Pension PlanOffice.

RRSP’ s

Effective immediately, employees will have the option to apply for a tax reduction at source for regular contributions to an RRSP. Forms to apply for this through Canada Customs and Revenue Agency (CCRA) are available on the forms page under the Payroll & Leave section.

Retirement Allowance

Upon retirement from service, an employee who has completed 20 years of service with the BC Government, and who under the provisions of the Public Service Pension Plan Rules, is entitled to receive a pension benefit on retirement, is entitled to an amount equal to their salary for one month, and, for each full year of service exceeding 20 years, is entitled to an additional amount equal to 1/5 of their monthly salary, to a maximum of three months salary (30 or more years service). The employee may opt to take the allowance as equivalent paid leave of absence to be taken immediately prior to retirement.

The BC Public Service Agency is responsible for the administration and payment of the retirement allowance.

Eligibility for Retirement Allowance

The retirement allowance is payable, upon retirement, to:

1. an employee who has completed twenty or more years of service (or equivalent*) with the BC Provincial Government and is scheduled to receive an immediate pension under the provisions of the Public Service Pension Plan Rules;
2. a salaried physician who has completed ten or more years of service (or equivalent*) and is scheduled to receive an immediate pension under the provisions of the Public Service Pension Plan Rules;
3. an employee who has completed 20 or more years of service (or equivalent*) and retires within ten years of mandatory retirement age, and elects to receive a deferred pension under the provisions of the Public Service Pension Plan Rules, payment of the retirement allowance will be made following the effective date of the pension and will be calculated based on the employee’ s basic monthly salary rate as at the last day on ministry payroll;
4. an employee retiring from Long Term Disability who has completed twenty years of service (or equivalent*) and had attained age 55 (50 for firefighters and persons employed in a correctional centre) before being accepted under the provisions of the Long Term Disability Plan. The retirement allowance is calculated based on the employee’s basic monthly salary rate in effect at the commencement date of the Long Term Disability benefit.

*EQUIVALENT SERVICE is service which was less than full time. A statement of service in hours and earnings must be completed and submitted to BC Public Service Agency. The number of years used in the calculation of the retirement allowance will be determined by dividing the total hours worked by 1827.

1. An approved LEAVE OF ABSENCE, with or without pay, is not considered to be a break in service. The period of approved leave of absence will be used when determining the amount of the retirement allowance payable
2. Employment other than BC Provincial Government service, including service transferred under a reciprocal pension transfer agreement, will not count towards eligibility for a retirement allowance.

Amount of Allowances

Employees Other Than Salaried Physicians

An employee, other than a salaried physician, who is eligible for a retirement allowance will receive a payment equal to one month’ s salary after twenty full years of service. An additional amount of one-fifth of one month’ s salary is payable for each subsequent year of full service to a maximum benefit of three month’ s salary upon completion of thirty or more years of full service. The retirement allowance may be taken either as paid leave or as cash. There is no option to split the retirement allowance between cash and paid leave.

Retirement Allowance Entitlement Chart

For the purposes of calculating the following entitlements, one month equals 21.75 (7 hour) days.

Salaried Physicians

A salaried physician who is eligible for a retirement allowance will receive a payment equal to one month’ s salary after ten years of service. An additional amount of one-tenth of one month’ s salary is payable for each subsequent year of full service to a maximum benefit of three month’ s salary upon completion of thirty or more years of full service. The retirement allowance may be taken either as paid leave or as cash. There is no option to split the retirement allowance between cash and paid leave.

Salaried Physicians Retirement Allowance Entitlement Chart

For the purposes of calculating the following entitlements, one month equals 21.75 (7 hour) days.

Retirement Allowance Disbursement Options

Prior to proceeding onto pension, the employee and their Human Resource/ Pay office must complete and forward the Paid Absence Prior to Retirement form to BC Public Service Agency.

a) Cash payment

i) if the retirement allowance is paid to the employee, it is subject to withholding of tax as follows:

• 10% on payments up to $5,000;
• 20% on payments up to $15,000;
• 30% on payments exceeding $15,000

ii) if all or a portion of the retirement allowance is transferred directly to either the Public Service Pension Plan, for purchase of service or reinstatement, or to a Registered Retirement Savings Plan, a TD2R Direct Transfer form must be completed for each transaction and forwarded to BC Public Service Agency.

iii) in order for the payment(s) to be made on a timely basis, the completed Paid Absence Prior to Retirement form must be received by BC Public Service Agency at least 4 weeks in advance of the employee’s last day on pay.

iv) a T4A will be issued by BC Public Service Agency to the employee, the February following the year in which the payment(s) were made.

b) Paid Leave

i) where the retirement allowance is taken as time off, it will be the last leave taken after all other leaves have been concluded in accordance with the paid absence prior to retirement policy.

ii) if the retirement allowance as time off takes an employee into the next calendar year, the employee will NOT be eligible for vacation in that new year, nor for an additional 1/5 of a month of retiring allowance when the retirement allowance overlaps the service anniversary date.

iii) statutory holidays are counted in the number of paid days off when the Retirement Allowance is taken as paid leave