Public Service Pension Plan

Slide 1:Public Service Pension Plan Retirement Planning Information Session

You and Your Pension Plan Introduce yourself and explain that you will be talking about their pension plan. Invite the participants to ask questions, to ensure that the session meets their needs. The Public Service Pension Center is the primary office responsible for the administration of the pension plan for federal public service employees. Over 718 employees located in Shediac, N.B. Over 297,600 active members to the pension plan. Over 225,500 pensioners. Introduce yourself and explain that you will be talking about their pension plan. Invite the participants to ask questions, to ensure that the session meets their needs. The Public Service Pension Center is the primary office responsible for the administration of the pension plan for federal public service employees. Over 718 employees located in Shediac, N.B. Over 297,600 active members to the pension plan. Over 225,500 pensioners.

Slide 2:Objective

� �to help you understand the benefits of your Public Service Pension Plan� This handout is provided for information purposes only and does not constitute a legal document on your rights and obligations. Should there be any conflict between the information in this document and that contained in the Public Service Superannuation Act and Regulations, or other applicable laws, the Act and Regulations apply. The objective is to help members take advantage of their pension plan. The objective is to help members take advantage of their pension plan.

Slide 3:Today�s Topics

How your pension plan works Elective Service Supplementary Death Benefit Plan Retirement Benefits Indexing CPP/QPP Coordination Survivor Benefits Pension Benefits Division Introduce the "agenda" for the session: How your pension plan works � Provide a brief overview of the pension plan. Elective Service - Address the different types of service members may buyback and methods of payment. Supplementary Death Benefit - This is the life insurance portion of the pension plan. Retirement Benefits - Address what types of benefits are available and how the member�s age and their years of pensionable service are required to qualify for each type. Indexing - Address how pensions increase with the cost of living every year. This is one of the features that makes our plan so good. CPP/QPP Coordonation - This is where we explain that the members pension will be reduced at age 65 due to the integration with CPP/QPP and why. Survivors � In this section explain who can be considered as the member�s survivors and how we calculate their pension entitlement. Pension Division Benefits - In cases of divorce or separation, the pension can be divided.Introduce the "agenda" for the session: How your pension plan works � Provide a brief overview of the pension plan. Elective Service - Address the different types of service members may buyback and methods of payment. Supplementary Death Benefit - This is the life insurance portion of the pension plan. Retirement Benefits - Address what types of benefits are available and how the member�s age and their years of pensionable service are required to qualify for each type. Indexing - Address how pensions increase with the cost of living every year. This is one of the features that makes our plan so good. CPP/QPP Coordonation - This is where we explain that the members pension will be reduced at age 65 due to the integration with CPP/QPP and why. Survivors � In this section explain who can be considered as the member�s survivors and how we calculate their pension entitlement. Pension Division Benefits - In cases of divorce or separation, the pension can be divided.

Slide 4:The web site address is www.pensionandbenefits.gc.ca Members should be encouraged to use the website to obtain information regarding their pension plan. During the presentation, refer to the website as an area to obtain up-to-date information regarding changes to the pension plan. They can also obtain an estimate of the cost of buying back previous periods of employment, a calculation of pension entitlements, forms members may need to complete, such as the PWGSC 2196 (Designation of Beneficiary Form), etc. The web site address is www.pensionandbenefits.gc.ca Members should be encouraged to use the website to obtain information regarding their pension plan. During the presentation, refer to the website as an area to obtain up-to-date information regarding changes to the pension plan. They can also obtain an estimate of the cost of buying back previous periods of employment, a calculation of pension entitlements, forms members may need to complete, such as the PWGSC 2196 (Designation of Beneficiary Form), etc.

Slide 5:Pension Plan Contributions for 2009

Contribution rate is 5.2%  on salaries up to yearly  CPP/QPP maximum of $46,300 Contribution rate is 8.4%  on salaries above yearly  CPP/QPP maximum of $46,300 The maximum amount of service a member can contribute into the pension plan is 35 years. Due to the coordination of the Public Service Pension Plan with CPP/QPP, plan members in effect contribute to the public service plan at two rates: 5.2 per cent on salary up to the maximum covered by CPP/QPP 8.4 per cent on salary above the maximum covered by CPP/QPP The maximum amount of service a member can contribute into the pension plan is 35 years. Due to the coordination of the Public Service Pension Plan with CPP/QPP, plan members in effect contribute to the public service plan at two rates: 5.2 per cent on salary up to the maximum covered by CPP/QPP 8.4 per cent on salary above the maximum covered by CPP/QPP

Slide 6:Pensionable Service

Current service Elective service Canadian Forces / RCMP service Pension Transfer Agreements The following are the types of pensionable service: Current Service - One day of employment as a plan member equals one day of pensionable service under the Pension Plan. This also includes part-time service. Elective Service - Members have an opportunity to purchase some types of prior service. Canadian Forces or RCMP - If a Canadian Forces or RCMP member is entitled to a pension under those plans, and then becomes a plan member under the PSSA, the RCMP/CFSA service would form part of the 35 years of service. For example, if a person retires from Canadian Forces with 25 years of service, they could only contribute 10 years with the PSSA. The total of the two being 35 years. It's also possible to transfer your service with the RCMP/CFSA into the PSSA. Pension Transfers Agreements - If upon joining the Public Service you transferred service from the previous employer, that service would also form part of the 35 years. The following are the types of pensionable service: Current Service - One day of employment as a plan member equals one day of pensionable service under the Pension Plan. This also includes part-time service. Elective Service - Members have an opportunity to purchase some types of prior service. Canadian Forces or RCMP - If a Canadian Forces or RCMP member is entitled to a pension under those plans, and then becomes a plan member under the PSSA, the RCMP/CFSA service would form part of the 35 years of service. For example, if a person retires from Canadian Forces with 25 years of service, they could only contribute 10 years with the PSSA. The total of the two being 35 years. It's also possible to transfer your service with the RCMP/CFSA into the PSSA. Pension Transfers Agreements - If upon joining the Public Service you transferred service from the previous employer, that service would also form part of the 35 years.

Slide 7:Non-Pensionable Service

Strike Suspension Unauthorized Leave Without Pay Seasonal Lay-off Authorized Leave Without Pay (not purchased) The following types of service cannot be counted as pensionable service nor towards the 35 years of pensionable service. The initial 3 months of authorized LWOP must be paid upon returning to duty. Members have the option not to count the period of LWOP after the first 3 months. The following types of service cannot be counted as pensionable service nor towards the 35 years of pensionable service. The initial 3 months of authorized LWOP must be paid upon returning to duty. Members have the option not to count the period of LWOP after the first 3 months.

Slide 8:

Can you buyback prior service? Elective Service

Slide 9:Types of Elective Service

Prior public service (PSSA) Non-Contributory Contributory Canadian Forces / RCMP service Non-Contributory Contributory Pensionable Employment (other employers) Subject to pension plan 1. Public Service - Prior Public Service can be purchased to count as pensionable service. This can be prior service as a member for which you received a return of contributions, prior non-contributory service as a term employee (6 months qualifying) or even prior service as a part-time employee for service that occurred on or after 1/1/81. It could also include periods of LWOP service, beyond the first 3 months, which members opted not to count when they return to duty. 2. Canadian Forces/RCMP - Prior non-contributory or contributory service where a return of contributions was paid. 3. Employment outside the Public Service - Examples for this type of service would be the provincial governments, universities, private companies, etc. In order to purchase this type of service the following conditions must be met: must be registered under the Income Tax Act must be an Approved Plan, must have been subject to their pension plan, received a return of contributions, break in service can't be more than 2 years. 1. Public Service - Prior Public Service can be purchased to count as pensionable service. This can be prior service as a member for which you received a return of contributions, prior non-contributory service as a term employee (6 months qualifying) or even prior service as a part-time employee for service that occurred on or after 1/1/81. It could also include periods of LWOP service, beyond the first 3 months, which members opted not to count when they return to duty. 2. Canadian Forces/RCMP - Prior non-contributory or contributory service where a return of contributions was paid. 3. Employment outside the Public Service - Examples for this type of service would be the provincial governments, universities, private companies, etc. In order to purchase this type of service the following conditions must be met: must be registered under the Income Tax Act must be an Approved Plan, must have been subject to their pension plan, received a return of contributions, break in service can't be more than 2 years.

Slide 10:Methods of Payment

Lump sum payment and/or Monthly instalments Payment period - under age 45 / up to age 65 - age 45 and over / 20 years Debt cancelable by death Members can pay for the purchase of prior service by either lump sum and/or monthly instalments. Members can also make lump sum payments (cash, RRSP transfers, severance pay etc.) at anytime without a penalty. If members have not completed paying for the service when they retire, monthly payments will be deducted automatically from their pension cheques. Members can pay for the purchase of prior service by either lump sum and/or monthly instalments. Members can also make lump sum payments (cash, RRSP transfers, severance pay etc.) at anytime without a penalty. If members have not completed paying for the service when they retire, monthly payments will be deducted automatically from their pension cheques.

Slide 11:Sample of a Public Service Buyback

Service: 1/1/1975 to 31/12/78 (4 years) Born: 1952 (male) This slide will answer questions, such as, is it to my advantage to buy, what will it do for my pension, when should I buy, what type of service should I buy. The sex and age are important due to the life insurance charges. (i.e. females live longer than males and therefore the election cost is less for females) This table demonstrates that the longer the member waits, the more it will cost. A majority of the time, if a member waits until just before they retire to purchase their service, the resultant benefit is usually still greater than the cost if they are buying service at single rate (employees share only). However, if the cost of the service is at double rate (employee and employer share) it may not be beneficial. This slide will answer questions, such as, is it to my advantage to buy, what will it do for my pension, when should I buy, what type of service should I buy. The sex and age are important due to the life insurance charges. (i.e. females live longer than males and therefore the election cost is less for females) This table demonstrates that the longer the member waits, the more it will cost. A majority of the time, if a member waits until just before they retire to purchase their service, the resultant benefit is usually still greater than the cost if they are buying service at single rate (employees share only). However, if the cost of the service is at double rate (employee and employer share) it may not be beneficial.

Slide 12:The Buyback Process

Estimate of cost Legally binding agreement Medical examination Made while employed as a member Income Tax implications Public Service Pension Center 1-800-561-7930 The member should obtain an estimate of the cost prior to signing the contract. The contracts are irrevocable. Members may buy back prior service up to the last day they are employed and a member to the pension plan, but not the day after. A medical is required in order to validate the purchase of prior service (there are exceptions to the medical rule). Members should to contact their local district taxation office to determine the tax implications before they sign the contract (available RRSP room, tax deductibility etc.). The monthly installments paid towards the buy back may or may not be tax deductible.The member should obtain an estimate of the cost prior to signing the contract. The contracts are irrevocable. Members may buy back prior service up to the last day they are employed and a member to the pension plan, but not the day after. A medical is required in order to validate the purchase of prior service (there are exceptions to the medical rule). Members should to contact their local district taxation office to determine the tax implications before they sign the contract (available RRSP room, tax deductibility etc.). The monthly installments paid towards the buy back may or may not be tax deductible.

Slide 13:Plan members no longer contact their Compensation Advisors for an estimate of the cost of purchasing prior service. They can obtain estimates from the Service Buyback Estimator on the Web or by contacting the Public Service Pension Office at 1-800-561-7930. Plan members no longer contact their Compensation Advisors for an estimate of the cost of purchasing prior service. They can obtain estimates from the Service Buyback Estimator on the Web or by contacting the Public Service Pension Office at 1-800-561-7930.

Slide 15:Supplementary Death Benefit

Did you know that you have �life insurance� from your employer?

Slide 16:Supplementary Death Benefit

Term life insurance Coverage: double your annual salary (to next multiple of $1,000) Cost: 15� a month per $1,000 of coverage Coverage of $10,000 is free at age 65 Reduced by 10% per year effective age 66 Designation of beneficiary 1-800-883-1411 Supplementary Death Benefit is a term insurance only. It is not whole life, there is no cash-in value or cannot be used as collateral. These payments are tax free. The superannuable salary rate earned on the last day of employment determines what the member�s insurance will be as a pensioner, before the reductions commence. At 65, the pensioner will pay $1.50 less in premiums, the value of $10,000 which is the minimum payable. If the pensioner passes away at age 92, a cheque for $10,000 will be issued. There are some bonuses or allowances (i.e. bilingual bonus and penalogical factor allowance) where there is a minimum number of working days required to be eligible for this bonus or allowance for a particular month. For these bonus or allowances to be included in the final salary calculation, the member must have worked the minimum number of days in their retirement month for the final salary calculation required during the month the members retire. This could impact the SDB salary in cases where there are bonuses or allowances that are pensionable. Supplementary Death Benefit is a term insurance only. It is not whole life, there is no cash-in value or cannot be used as collateral. These payments are tax free. The superannuable salary rate earned on the last day of employment determines what the member�s insurance will be as a pensioner, before the reductions commence. At 65, the pensioner will pay $1.50 less in premiums, the value of $10,000 which is the minimum payable. If the pensioner passes away at age 92, a cheque for $10,000 will be issued. There are some bonuses or allowances (i.e. bilingual bonus and penalogical factor allowance) where there is a minimum number of working days required to be eligible for this bonus or allowance for a particular month. For these bonus or allowances to be included in the final salary calculation, the member must have worked the minimum number of days in their retirement month for the final salary calculation required during the month the members retire. This could impact the SDB salary in cases where there are bonuses or allowances that are pensionable.

Slide 17:Naming a Beneficiary

Estate A person over age 18 Charitable / benevolent / religious or educational institution Estate Exception: a male employee, married and a participant prior to December 20, 1975 A beneficiary can be: Where no beneficiary is named: Effective May 1st, 2008. if members are unsure as to who they designated as a beneficiary, refer them to the Public Service Pension Center. The members life circumstances may have changed since they completed the last designation form. Members can change their beneficiary anytime. The last designation form (PWGSC 2196) signed before the member passes away will be valid. The designation must be received by the Public Service Pension Center prior to the individual's death. Any person 18 or over - emphasis on the "one person". If a member would like more than one person to share the insurance, perhaps they should consider naming their "Estate" and have their will specify how the money should be distributed. The provisions of a will, separation agreement or court order under family law will not have any effect on the entitlement to the Supplementary Death Benefit. Payment will be made to the beneficiary in accordance with the Public Service Superannuation Act. Effective May 1st, 2008. if members are unsure as to who they designated as a beneficiary, refer them to the Public Service Pension Center. The members life circumstances may have changed since they completed the last designation form. Members can change their beneficiary anytime. The last designation form (PWGSC 2196) signed before the member passes away will be valid. The designation must be received by the Public Service Pension Center prior to the individual's death. Any person 18 or over - emphasis on the "one person". If a member would like more than one person to share the insurance, perhaps they should consider naming their "Estate" and have their will specify how the money should be distributed. The provisions of a will, separation agreement or court order under family law will not have any effect on the entitlement to the Supplementary Death Benefit. Payment will be made to the beneficiary in accordance with the Public Service Superannuation Act.

Slide 18:Retirement Benefits

What are my options when I retire?

Slide 19:Retirement Benefits

Two types of retirement benefits: Lump Sum Payments Return of Contribution Transfer Value Monthly Payments Immediate Annuity Annual Allowance Deferred Annuity There are two types of benefits, lump sum "one time" payments and monthly "payments for life". There are two types of benefits, lump sum "one time" payments and monthly "payments for life".

Slide 20:Lump Sum Benefit

Return of Contributions Only option available to those with less than 2 years of pensionable service (not vested). Members with less than 2 years are only entitled to a return of their contributions (plus interest,if applicable) Members with more than 2 years of service are vested and contributions are locked into the plan pension. The 2-year lock-in came into effect on 20/06/1996. Members with less than 2 years are only entitled to a return of their contributions (plus interest,if applicable) Members with more than 2 years of service are vested and contributions are locked into the plan pension. The 2-year lock-in came into effect on 20/06/1996.

Slide 21:Lump Sum Payment

Transfer Value Payment Must be less than age 50 at termination Must have at least 2 years of service Actuarial value of accrued pension benefits Must be transferred to a locked-in RRSP or annuity Members must be less than 50 years of age and have at least 2 years of pensionable service. A portion of the payment must be transferred to a locked-in fund. The intent is to pay the member an amount today that when invested will produce a similar pension to the one you would have received had you left your money in the PSSA and collected a pension at age 60. Members must be less than 50 years of age and have at least 2 years of pensionable service. A portion of the payment must be transferred to a locked-in fund. The intent is to pay the member an amount today that when invested will produce a similar pension to the one you would have received had you left your money in the PSSA and collected a pension at age 60.

Slide 22:

Lump Sum Payment Transfer Value Tax Considerations Amount within tax limit must be transferred to a locked-in RRSP or annuity. Amount in excess of the tax limit is paid to a contributor and taxed. Amount in excess of the tax limit paid to RRSP if you have available RRSP �room�. Must be transferred to: (i) a locked-in registered retirement savings plan (RRSP) as defined in the PBSA; (ii) a life income fund (LIF) as defined in the PBSA; (iii) another registered pension plan if the plan so permits; (iv) a financial institution or life insurance company for the purchase of either a deferred or immediate life annuity. Life annuities must be issued by a company authorized to carry on a life insurance business in Canada. The Income Tax Act (ITA) places certain restrictions on the amount of a pension benefit that can be transferred on a tax sheltered basis to a registered pension vehicle. The limit, for employees less than age 50, is the annual pension payable at age 65 (plus applicable indexing) multiplied by nine. Transfer Value Within Tax Limits: The portion of the transfer value within the tax limits will be deposited directly to the locked-in retirement vehicle that the contributor has chosen. Transfer Value Outside Tax Limits: Where there is a portion of the transfer value in excess of the tax limits, the payment will be made directly to the member. Tax is withheld on the full amount and it is reported as income on the T4A or Relev� 2. If the member has available RRSP "room" and wishes to transfer the portion of the transfer value in excess of the tax limits to an RRSP, the member will be permitted to do so. Must be transferred to: (i) a locked-in registered retirement savings plan (RRSP) as defined in the PBSA; (ii) a life income fund (LIF) as defined in the PBSA; (iii) another registered pension plan if the plan so permits; (iv) a financial institution or life insurance company for the purchase of either a deferred or immediate life annuity. Life annuities must be issued by a company authorized to carry on a life insurance business in Canada. The Income Tax Act (ITA) places certain restrictions on the amount of a pension benefit that can be transferred on a tax sheltered basis to a registered pension vehicle. The limit, for employees less than age 50, is the annual pension payable at age 65 (plus applicable indexing) multiplied by nine. Transfer Value Within Tax Limits: The portion of the transfer value within the tax limits will be deposited directly to the locked-in retirement vehicle that the contributor has chosen. Transfer Value Outside Tax Limits: Where there is a portion of the transfer value in excess of the tax limits, the payment will be made directly to the member. Tax is withheld on the full amount and it is reported as income on the T4A or Relev� 2. If the member has available RRSP "room" and wishes to transfer the portion of the transfer value in excess of the tax limits to an RRSP, the member will be permitted to do so.

Slide 23:Monthly Benefits

What do these terms mean to you? Immediate Annuity Annual Allowance Deferred Annuity If a plan member becomes re-employed in a position that does not require members to contribute to the Public Service Pension Plan (PSPP), they can receive both their pension and the salary from their new position. However, if they choose to become re-employed in the Public Service and begin contributing to the PSPP, the monthly pension (including indexing) will cease, as they are unable to receive a PSPP pension and accumulate PSPP service simultaneously. The monthly pension will only be reactivated once they stop contributing to the PSPP, and will most likely be recalculated based on their combined pension credits (those accumulated during both the initial period of employment and the re-employment period). The indexing amount payable will be based on the most recent date of retirement. If a plan member becomes re-employed in a position that does not require members to contribute to the Public Service Pension Plan (PSPP), they can receive both their pension and the salary from their new position. However, if they choose to become re-employed in the Public Service and begin contributing to the PSPP, the monthly pension (including indexing) will cease, as they are unable to receive a PSPP pension and accumulate PSPP service simultaneously. The monthly pension will only be reactivated once they stop contributing to the PSPP, and will most likely be recalculated based on their combined pension credits (those accumulated during both the initial period of employment and the re-employment period). The indexing amount payable will be based on the most recent date of retirement.

Slide 24:Benefit Formula (Full-Time)

2% X 35 years X $45,257 = $ 31,679 per year or $ 2,640 per month 2% X 25 years X $45,257 = $ 22,628 per year or $ 1,885 per month Years and days of Average salary for 5 2% X pensionable service X consecutive years of highest paid service Regardless which type of benefit members choose or are entitled to, everyone shares the same formula. The "Average Salary" is usually the last 5 consecutives years of employment. However, if a member was acting in a higher paying position, the best 5 would not necessarily be their last 5 years. Overtime is not pensionable and is not included in the average salary calculation. Regardless which type of benefit members choose or are entitled to, everyone shares the same formula. The "Average Salary" is usually the last 5 consecutives years of employment. However, if a member was acting in a higher paying position, the best 5 would not necessarily be their last 5 years. Overtime is not pensionable and is not included in the average salary calculation.

Slide 25:Benefit Formula (Part-Time)

2% X 5 years X $45,257 X 20.0/37.5 = $ 2,413 per year or $ 201 per month Years and days Average salary Assigned 2% X of pensionable X for 5 consecutive X Work Week service years of highest Standard paid service Work Week For those that have some part-time service in their career, the formula would continue with Assigned/Standard work week. If the member has both full-time and part-time, both formulae would be used. Regardless when the period of part-time service occurred, the members pension will be reduced. The average salary is calculated based on Full Time Equivalent salaries. The reduction takes place when the benefit is calculated. Members who have grandfathered part-time service, we use two methods to calculate the pension (the old and the new) and the members will receive the greater benefit. For those that have some part-time service in their career, the formula would continue with Assigned/Standard work week. If the member has both full-time and part-time, both formulae would be used. Regardless when the period of part-time service occurred, the members pension will be reduced. The average salary is calculated based on Full Time Equivalent salaries. The reduction takes place when the benefit is calculated. Members who have grandfathered part-time service, we use two methods to calculate the pension (the old and the new) and the members will receive the greater benefit.

Slide 26:Benefit Formula (Full-Time and Part-Time)

Full-Time Service 2% X 35 years X $45,257 X 37.5/37.5 = $ 31,679 annually $ 2,640 monthly Full-Time and Part-time Service 2% X 30 years X $45,257 X 37.5/37.5 = $ 27,154 annually $ 2,263 monthly 2% X 5 years X $45,257 X 20.0/37.5 = $ 2,413 annually $ 201 monthly Total = $ 29,567 annually $ 2,464 monthly This example compares two members with 35 years of pensionable service. One member with only full-time service and the other with full-time and part-time service. This example compares two members with 35 years of pensionable service. One member with only full-time service and the other with full-time and part-time service.

Slide 27:Monthly Benefits

Immediate Annuity � (unreduced benefit) Members over 60 years of age with 2 years of pensionable service have no option, the unreduced pension will commence immediately. The same applies to members attaining age 55 and having at least 30 years of pensionable service. The 55/30 also has some misconceptions attached to it. People will call it the "85 formula", the "85 pension�, etc. Members may assume that they can play with the numbers and as long as they total 85 they can retire. That's not the case! A member age 53 with 35 years of service, would be have 5% reduction for every year that they are not 55, therefore the resultant reduction is 10%. If on the other hand you were 56 years old with 29 years of service the reduction would be 5% because they are one year shy of 30 years of pensionable service. The Canadian Forces, RCMP and Correctional Services have an 85 formula for determining entitlement to indexing only. Members over 60 years of age with 2 years of pensionable service have no option, the unreduced pension will commence immediately. The same applies to members attaining age 55 and having at least 30 years of pensionable service. The 55/30 also has some misconceptions attached to it. People will call it the "85 formula", the "85 pension�, etc. Members may assume that they can play with the numbers and as long as they total 85 they can retire. That's not the case! A member age 53 with 35 years of service, would be have 5% reduction for every year that they are not 55, therefore the resultant reduction is 10%. If on the other hand you were 56 years old with 29 years of service the reduction would be 5% because they are one year shy of 30 years of pensionable service. The Canadian Forces, RCMP and Correctional Services have an 85 formula for determining entitlement to indexing only.

Slide 28:Monthly Benefit

Immediate Annuity Payable upon termination Indexed from year of termination Supplementary Death Benefit coverage is automatic Payable upon retirement means members pensions will commence the day following the last day worked or deemed to have worked. Indexing commences Jan 1st following the year members retire, however, is based on the month and year of retirement. Members retain the same life insurance as a pensioner as when they worked. Coverage is automatic. As pensioners, they may cancel the coverage or reduce it to $10,000. Payable upon retirement means members pensions will commence the day following the last day worked or deemed to have worked. Indexing commences Jan 1st following the year members retire, however, is based on the month and year of retirement. Members retain the same life insurance as a pensioner as when they worked. Coverage is automatic. As pensioners, they may cancel the coverage or reduce it to $10,000.

Slide 29:Monthly Benefit

Payable at the latest of : age 50 : date of option or : date of termination Subject to reduction Immediate annuity possible in the event of permanent disability Supplementary Death Benefit coverage can be automatic Annual Allowance (reduced benefit) Members must be at least 50 to receive a benefit. If members were under age 50 at termination, and are not sure when they would like their annuity to commence, they choose a Deferred Annuity (payable at 60). They would then have the flexibility of choosing any payment date they wish (after age 50). Members will incur a reduction to their pensions if they don�t meet the age and years of pensionable service at the time they make the request for benefits. In the event of disability, all reductions are waived. Supplementary Death Benefit coverage is automatic if annuity is payable within 30 days of termination. Members must be at least 50 to receive a benefit. If members were under age 50 at termination, and are not sure when they would like their annuity to commence, they choose a Deferred Annuity (payable at 60). They would then have the flexibility of choosing any payment date they wish (after age 50). Members will incur a reduction to their pensions if they don�t meet the age and years of pensionable service at the time they make the request for benefits. In the event of disability, all reductions are waived. Supplementary Death Benefit coverage is automatic if annuity is payable within 30 days of termination.

Slide 30:Annual Allowance Reduction Formula

Formula 1 5% x (60 � age) Formula 2 5% x (55 � age) Greater reduction of: or 5% x (30 � service) Under 50 years of age or Formula 1 Under 25 years of service Over 50 years of age Formula 1 and Smaller reduction of: or 25 or more years of service Formula 2 The pension plan provides us with two reduction formulae. Provide possible scenarios for the participants. The pension plan provides us with two reduction formulae. Provide possible scenarios for the participants.

Slide 31:Waiver of Annual Allowance Reduction

Involuntary termination Age 55 with 10 years employment in the Public Service Subject to Treasury Board approval Reduction for Annual Allowancemay be waived If a member is involuntary retired/terminated and the only entitlement is an Annual Allowance, the reduction may be waived if the member meets the conditions established by Treasury Board. With the introduction of the Early Retirement Incentive/Early Departure Incentive (ERI/EDI) program (1996 to 1998), the minimum age was reduced to 50. This program was in place for 3 years. When this program ended the minimum age went back to age 55. If a member is involuntary retired/terminated and the only entitlement is an Annual Allowance, the reduction may be waived if the member meets the conditions established by Treasury Board. With the introduction of the Early Retirement Incentive/Early Departure Incentive (ERI/EDI) program (1996 to 1998), the minimum age was reduced to 50. This program was in place for 3 years. When this program ended the minimum age went back to age 55.

Slide 32:Monthly Benefits

Payable on 60th birthday Indexed from year of termination Annual allowance can be requested after age 50 Immediate annuity possible in the event of permanent disability Supplementary Death Benefit coverage not automatic Deferred Annuity (paid in the future) This option is available for members who are less than age 50 and want a pension entitlement in the future or between age 50 and 60 and do not want a reduction applied to their pension . If members become permanently disabled, they do not need to wait until age 60. The pension will become payable on the date of disability. This option is available for members who are less than age 50 and want a pension entitlement in the future or between age 50 and 60 and do not want a reduction applied to their pension . If members become permanently disabled, they do not need to wait until age 60. The pension will become payable on the date of disability.

Slide 33:Monthly Deductions

Pension cheques are payable at the end of the each month and paid in arrears (not in advance). In effect, paid for the month just past. The first pension cheque is paid within 45 days after the date of termination, provided that Public Service Pension Center has received the required documentation prior to retirement. The Provincial Sales Tax refers to Quebec (9%) and Ontario (8%) and applies to medical and insurance premiums. Pension cheques are payable at the end of the each month and paid in arrears (not in advance). In effect, paid for the month just past. The first pension cheque is paid within 45 days after the date of termination, provided that Public Service Pension Center has received the required documentation prior to retirement. The Provincial Sales Tax refers to Quebec (9%) and Ontario (8%) and applies to medical and insurance premiums.

Slide 34:Public Service Health Care Plan

Individual Monthly Premium Employee: Pensioner: Family Monthly Premium Employee: Pensioner: Pensioners have the same health care insurance coverage as members. The only difference is that pensioners pay more (see chart). Coverage for semi private or private hospital accommodation is available at three levels: Level I - up to $60 per day Level II - up to $140 per day Level III - up to $220 per day The charges for hospital accommodation vary considerably from one hospital region to another. When choosing a level of coverage, members should determine whether it will be adequate for their area. If members wish to change the level (I, II or III) or the type (single or family) of the PSHCP coverage, they should contact Human Resources. Pensioners must contact the Public Service Pension Center to obtain a PSHCP application form. Survivors in receipt of a pension are also entitled to obtain PSHCP coverage. Pensioners have the same health care insurance coverage as members. The only difference is that pensioners pay more (see chart). Coverage for semi private or private hospital accommodation is available at three levels: Level I - up to $60 per day Level II - up to $140 per day Level III - up to $220 per day The charges for hospital accommodation vary considerably from one hospital region to another. When choosing a level of coverage, members should determine whether it will be adequate for their area. If members wish to change the level (I, II or III) or the type (single or family) of the PSHCP coverage, they should contact Human Resources. Pensioners must contact the Public Service Pension Center to obtain a PSHCP application form. Survivors in receipt of a pension are also entitled to obtain PSHCP coverage.

Slide 35:Pensioners� Dental Services Plan

There is no time limit for enrolling. Members cannot voluntarily terminate membership under the Dental Plan before having been a member for three complete calendar years. If they voluntarily terminate after 3 years, they cannot obtain coverage again. There is no time limit for enrolling. Members cannot voluntarily terminate membership under the Dental Plan before having been a member for three complete calendar years. If they voluntarily terminate after 3 years, they cannot obtain coverage again.

Slide 36:The basic pension calculator allows members to estimate the amount of their pension benefit from the convenience of any personal computer with Internet access. The pension calculator forecasts annual/monthly pension entitlements using information provided solely by the member. This program has no direct links to personal information. The personalized pension calculator is a secure website and the data is extracted from the pay and pension systems. It is updated on a quarterly basis and allows members to do the following: Calculate their Total Pensionable Service based on information extracted from the pay and pension records as of the Termination Date the member entered; Estimate the value of pension entitlement for members with full-time and part-time service; and Estimate the adjustment to the members pension benefits if they have been divided after a divorce or separation.The basic pension calculator allows members to estimate the amount of their pension benefit from the convenience of any personal computer with Internet access. The pension calculator forecasts annual/monthly pension entitlements using information provided solely by the member. This program has no direct links to personal information. The personalized pension calculator is a secure website and the data is extracted from the pay and pension systems. It is updated on a quarterly basis and allows members to do the following: Calculate their Total Pensionable Service based on information extracted from the pay and pension records as of the Termination Date the member entered; Estimate the value of pension entitlement for members with full-time and part-time service; and Estimate the adjustment to the members pension benefits if they have been divided after a divorce or separation.

Slide 37:Indexing

Am I on a �fixed income� as a Public Service pensioner?

Slide 38:Indexing

Annual cost of living increase Based on average of Consumer Price Index Increase is effective January 1 First increase is pro-rated and based on  month of termination Every Jan 1st, pensioners receive an increase to their pensions based on the cost of living. This increase is based on the Average Consumer Price Index over the preceding 12 months. The following are the cost of living increases during the past 10 years. 2009.�.2.5% 2008�..1.8% 2007�..2.3% 2006.....2.2% 2005.....1.7% 2004.....3.3% 2003.....1.6% 2002.....3.0% 2001.....2.5% 2000.....1.5% Every Jan 1st, pensioners receive an increase to their pensions based on the cost of living. This increase is based on the Average Consumer Price Index over the preceding 12 months. The following are the cost of living increases during the past 10 years. 2009.�.2.5% 2008�..1.8% 2007�..2.3% 2006.....2.2% 2005.....1.7% 2004.....3.3% 2003.....1.6% 2002.....3.0% 2001.....2.5% 2000.....1.5%

Slide 39:Month of Retirement Percentage of Indexing

Members should be made aware that when they choose their retirement date, to consider not working the last day of the month. As a result, it may increase their pension because it gives them an extra month of indexing which is compounded for the rest of their life. Members should be made aware that when they choose their retirement date, to consider not working the last day of the month. As a result, it may increase their pension because it gives them an extra month of indexing which is compounded for the rest of their life.

Slide 40:Canada/Quebec Pension Plan Coordination

How does the CPP/QPP coordination affect my pension benefits?

Slide 41:CPP/QPP Coordination

Reduced pension contributions while employed Reduced pension benefits after age 65 2009 This chart shows how the pension contributions are apportioned this year. For a portion of the year, members contribute 5.2% to the pension fund rather than 8.4% that is required. This chart shows how the pension contributions are apportioned this year. For a portion of the year, members contribute 5.2% to the pension fund rather than 8.4% that is required.

Slide 42:CPP/QPP Reduction Formula

Examples: 0.00625 x 35 years x $ 43,620.00 = $ 9,541.87 / annually $ 795.15 / monthly 0.00625 x 25 years x $ 43,620.00 = $ 6,815.62 / annually $ 567.96 / monthly On January 1, 2008, the reduction factor used to calculate the reduction at age 65 is based on the year the member was born or the year they reach age 65 or earlier in case of disability. It is important to remember that the average maximum pensionable earnings under the CPP/QPP (or the average salary if it is lower) and the years of service at the retirement date are also factors used in the calculation of the reduction at age 65.On January 1, 2008, the reduction factor used to calculate the reduction at age 65 is based on the year the member was born or the year they reach age 65 or earlier in case of disability. It is important to remember that the average maximum pensionable earnings under the CPP/QPP (or the average salary if it is lower) and the years of service at the retirement date are also factors used in the calculation of the reduction at age 65.

Slide 43:CPP/QPP Reduction Factor

The factor used in calculating the reduction to the pension at age 65 will be adjusted for plan members reaching age 65 in 2008 or later. The pension reduction at age 65 (or in case of disability) will be smaller commencing in 2008. The year the member reaches age 65 or the year of birth will determine the reduction factor applied to the pension. The factor used in calculating the reduction to the pension at age 65 will be adjusted for plan members reaching age 65 in 2008 or later. The pension reduction at age 65 (or in case of disability) will be smaller commencing in 2008. The year the member reaches age 65 or the year of birth will determine the reduction factor applied to the pension.

Slide 44:CPP/QPP Coordination

Reduction in benefits is effective: First of the month following 65th birthday or Entitlement to CPP/QPP disability benefits Application must be made for CPP/QPP Benefits Early retirement benefits available with CPP/QPP The CPP reduction is calculated the day the member retires and will normally never change even if they turn 65 fifteen years later. The pension will be reduced automatically at 65, regardless if they are not in receipt of CPP/QPP benefits. A pensioner entitled to CPP/QPP disability pension prior to reaching age 65 must contact the Pension Center in order to reduce the pension benefits immediately in order to avoid an overpayment. The CPP reduction is calculated the day the member retires and will normally never change even if they turn 65 fifteen years later. The pension will be reduced automatically at 65, regardless if they are not in receipt of CPP/QPP benefits. A pensioner entitled to CPP/QPP disability pension prior to reaching age 65 must contact the Pension Center in order to reduce the pension benefits immediately in order to avoid an overpayment.

Slide 45:Survivor Benefits

What benefits are available for my survivors?

Slide 46:Survivor Benefits

Surviving Partner 50% of the member�s basic pension (1% x years/days of service x average salary) Dependants 10% of member�s basic pension to each child or student (maximum 40%) Orphans 20% of member�s basic pension to each child or student (maximum 80%) In the event of death, benefits are payable to eligible survivors immediately, regardless of whether death occurs during employment or after retirement. A marriage or common law/same sex relationship must have commenced prior to retirement in order for surviving partner to be entitled to pension benefits. Survivors allowances are not reduced due to the CPP or Annual Allowance reductions. The pensioners accumulated indexing is applied to survivors pension immediately. Children amounts are in addition to partners pension entitlements. Dependants over 18 who are full-time students will continue to receive their allowance until age 25 or no longer attend school, whichever comes first. If there is no surviving partner receiving a pension, the dependants will be considered orphans. Survivors who remarry will continue to receive their pension. In the event of death, benefits are payable to eligible survivors immediately, regardless of whether death occurs during employment or after retirement. A marriage or common law/same sex relationship must have commenced prior to retirement in order for surviving partner to be entitled to pension benefits. Survivors allowances are not reduced due to the CPP or Annual Allowance reductions. The pensioners accumulated indexing is applied to survivors pension immediately. Children amounts are in addition to partners pension entitlements. Dependants over 18 who are full-time students will continue to receive their allowance until age 25 or no longer attend school, whichever comes first. If there is no surviving partner receiving a pension, the dependants will be considered orphans. Survivors who remarry will continue to receive their pension.

Slide 47:Survivor Entitlements

Divorced Partner is not entitled Separated Partner is entitled Common Law / Same Sex Partner - Must provide proof that relationship started prior to retirement - Pension Center must approve documentation submitted Occasionally we will have two individuals apply for a survivor's pension (a separated spouse and a common-law/same-sex partner). The pension will then be divided based on the time the member spent with each applicant. Documentation is required to make a claim for survivor benefits. For a legal spouse, a copy of the marriage certificate is required. For a common-law or same-sex relationship, sworn statements and other evidence demonstrating the conjugal nature and the period of the relationship are required. If a relationship started prior to the date the plan member ceased to be employed in the Public Service, the partner may qualify for a survivor allowance. They may wish to provide a sworn statement as well as other documents as evidence of the nature and period of their relationship. Records should be retained on an ongoing basis so that they are available in the event that they are needed to support a claim. Occasionally we will have two individuals apply for a survivor's pension (a separated spouse and a common-law/same-sex partner). The pension will then be divided based on the time the member spent with each applicant. Documentation is required to make a claim for survivor benefits. For a legal spouse, a copy of the marriage certificate is required. For a common-law or same-sex relationship, sworn statements and other evidence demonstrating the conjugal nature and the period of the relationship are required. If a relationship started prior to the date the plan member ceased to be employed in the Public Service, the partner may qualify for a survivor allowance. They may wish to provide a sworn statement as well as other documents as evidence of the nature and period of their relationship. Records should be retained on an ongoing basis so that they are available in the event that they are needed to support a claim.

Slide 48: Five Year Minimum Benefit

How and when is a minimum benefit paid?

Slide 49:Five year Minimum Benefit

Issued when no further benefits payable to any survivors Minimum benefit payable is the greater of: Return of Contributions plus interest or Five years of basic pension benefits (less any amount already paid) Members are guaranteed a minimum of five years of pension benefits. The grand total of all the benefits that were paid would be subtracted from the total of five years worth of pension benefits. If there is a balance of benefits that was not paid, payment will be made to the recipient of the Supplementary Death Benefit or the members/pensioners estate. This amount is taxable. Members are guaranteed a minimum of five years of pension benefits. The grand total of all the benefits that were paid would be subtracted from the total of five years worth of pension benefits. If there is a balance of benefits that was not paid, payment will be made to the recipient of the Supplementary Death Benefit or the members/pensioners estate. This amount is taxable.

Slide 50:Pension Benefits Division Act

Can my pension be divided?

Slide 51:Pension Division

Requirements: an agreement or court order must exist living apart for at least one year (when based on a separation agreement) normally cohabitation benefits only are available for division (court can order a different period) Maximum benefit available to the ex-partner is 50% of the value of the member�s pension This is possible where the family assets are to be divided (no support payments) in cases of divorce, with a court order, or in cases of legal separation. The money must be invested into a locked-in vehicle. On occasion, a member will choose to settle their divorce by providing the ex-partner other assets in exchange for not applying for Pension Division. The pension reduction is for life. Both the member/pensioner and the spouse/partner may request an estimate or an application for division. This is possible where the family assets are to be divided (no support payments) in cases of divorce, with a court order, or in cases of legal separation. The money must be invested into a locked-in vehicle. On occasion, a member will choose to settle their divorce by providing the ex-partner other assets in exchange for not applying for Pension Division. The pension reduction is for life. Both the member/pensioner and the spouse/partner may request an estimate or an application for division.

Slide 52:Pension Division continued�

Requirements: Lump sum payment transferred to a locked-in registered retirement vehicle Member�s pension is reduced accordingly Either party can request a division estimate Non-applicant partner has a 90-day objection period For information contact Public Service Pension Center at 1-800-883-1411.