Pension Plan Improvement & Tax Information
Public Service Pension Plan Improvement
All eligible GNWT employees contribute to the Public Service Pension Plan (Superannuation).
A recent change to the Public Service Pension Plan will improve benefits for anyone reaching age 65 in 2008 or later. This change may also affect the amount plan members can contribute to an RRSP.
How Does It Work?
The Public Service Pension Plan is designed so that your pension benefit at retirement is linked to your Canada Pension Plan (CPP) payment.
Your Public Service pension payment is reduced based on a formula once you reach age 65, which is the normal age of eligibility for CPP. At age 65 you will receive a payment from your public service pension plan and CPP, which will be approximately equal to the amount of your public service pension payment before the reduction.
The recent improvement to the Public Service Pension Plan means your monthly payment will be reduced less once you start receiving your CPP.
This means a greater take-home amount when you start receiving your pension, compared to the previous reduction rules.
Tax Implications - less RRSP room
Each calendar year, Payroll generates a Pension Adjustment based on the amount you contribute to your Public Service Pension Plan. This amount is included on your T4 for income tax purposes. Due to the improvement to the pension plan, your Pension Adjustment will now be increased, resulting in less RRSP room to invest outside your pension plan.
You May Recieve a Pension Adustment (T215) Form
The Federal Government has recalculated Pension Adjustments retractive to 1990 and all employees affected by this change will receive a Past Service Pension Adjustment and a Pension Ajustment T215 form in the mail.
Although the T215's are issued in 2008, the reduction to your RRSP contribution room will not be effective until 2009.
What To Do If You Receive a T215 In The Mail
On the back of the T215 is a brief explanation about the adjustment. Please read the form carefully.
You don’t have to do anything with the form, but keep it in your records. There is a contact number on the form for the Superannuation Office if you have questions about your Past Service Pension Adjustment.
The number to call is 1-888-670-5454 and will be available for questions up to the end of June.
Contacts
For more information about tax implications please visit the Canada Revenue Agency Website at: www.cra.gc.ca or call 1-800-959-8281.
For more information on the pension changes, please contact the Superannuation Sector Call Centre at 1-888-670-5454 or visit the links below:
http://www.tbs-sct.gc.ca/pubs_pol/hrpubs/Pensions/fscppm-frcrrm_e.asp
http://www.tbs-sct.gc.ca/hr-rh/bp-rasp/pensions/pensionfacts-infopensions/improvement-amelioration_e.asp