Canadian Armed Forces pensions
Release (Active member): Regular Force enrolled on or after March 1, 2007
Find out about your pension entitlements and benefit options if you are releasing from the Canadian Armed Forces (CAF).
On this page
- Pension benefits received at release
- Eligibility for an immediate pension at release
- Calculation of the amount to be received
- Reasons for a reduced pension when taken early
- How much a pension is reduced when taken early
- Estimate your pension at release
- Pension benefits available at release for those under age 50 with 2 or more years of service
- Benefits provided at release with fewer than 2 years of pensionable service
- Factors to consider when choosing between a deferred pension and a transfer value
- How a pension benefit option is selected at release
- Impact of releasing and working for the Federal Public Service or the Royal Canadian Mounted Police
- Factors to consider before transferring pension credits to the Federal Public Service or the Royal Canadian Mounted Police
- Transfer of pension credits to employers outside the Federal Public Service or the Royal Canadian Mounted Police
- Considerations when choosing what to do with your pension
- What happens when you have no paid service in the Reserve Force for 12 months
- Availability of a deferred pension estimate at release
- Steps to take for your pension when you are ready to release
Pension benefits received at release
At release, the type of pension benefit you receive depends on your age and pensionable service or on your Canadian Forces (CF) service:
- if you are age 60 or older with at least two years of pensionable service, you release with an immediate pension
- if you are any age and have at least 25 years of CF service, you release with an immediate pension
- if you are any age and have less than two years of pensionable service, you release without being eligible to immediately start a pension
- if you are under age 50 with at least two years of pensionable service, you release without being eligible to immediately start a pension
Eligibility for an immediate pension at release
You are entitled to an immediate unreduced pension when you:
- have 25 years (9,131 days) of CF service
- are age 60 with at least two years of pensionable service
- are age 55 with 30 years of pensionable service
- as a member of the Regular Force pension plan have 10 years of pensionable service and are disabled on release
- as a member of the Reserve Force pension plan have 2 years of pensionable service and are disabled on release or
- are involuntarily released due to a reduction in the Canadian Armed Forces (CAF) and either:
- have 20 years of pensionable service or
- are age 55 or older with 10 years of pensionable service
An unreduced pension is calculated according to the pension formula.
You are entitled to an immediate reduced pension if you don't meet any of the above criteria, are age 50 or older and have at least two years of pensionable service.
Check out the Scenarios to see examples of different situations at release
Calculation of the amount to be received
Your pension is calculated using formulas.
For members of the Regular Force pension plan
The lifetime pension formula uses your pensionable service and average earnings
The bridge benefit formula uses the average maximum pensionable earnings Average Maximum Pensionable Earnings (AMPE) or your average earnings (whichever is lower) and your pensionable service
Annual lifetime pension
1.375% × total pensionable service × average earnings up to the AMPE
+
2.0% × total pensionable service × average earnings above the AMPE
Annual bridge benefit paid until you reach age 65 or until you become eligible for a Canada Pension Plan/Quebec Pension Plan disability pension
0.625% × total pensionable service × AMPE or your average earnings (whichever is lower)
For members in the Reserve Force Pension Plan
The lifetime pension formula uses your pensionable earnings
The bridge benefit formula uses the average Year's Maximum Pensionable Earnings (YMPE) or your pensionable earnings (whichever is lower)
Annual lifetime pension
1.5% × total pensionable earnings (updated for wage growth)
Annual bridge benefit paid until you reach age 65 or until you become eligible for a Canada Pension Plan/Quebec Pension Plan disability pension
0.5% × total pensionable earnings (updated for wage growth) up to the average YMPE
Check out the Scenarios to see examples of different situations at release.
You may also be entitled to severance pay when you release (Not applicable to Reservists in the Reserve Force Pension Plan).
Contact the Canadian Armed Forces Pension Centre for an estimate of your pension.
Reasons for a reduced pension when taken early
If you are age 50 or older, have at least two years of pensionable service and are not entitled to an unreduced pension, you are eligible for a reduced pension. Your pension is reduced to take into account the fact that it will begin sooner than expected and you will receive it for a longer period of time.
How much a pension is reduced when taken early
Your pension is reduced for every year and fraction of a year by whichever of the following calculations provides the lowest reduction.
- 5% × (60 minus your age) or
- if you have 25 or more years of pensionable service and are at least age 50 when you stop participating in the plan, the greater of:
- 5% × (55 minus your age) or
- 5% × (30 minus your pensionable service)
In the reduction calculation, your age and pensionable service are rounded to the nearest one-tenth of a year.
This is how it works:
Scenario: Jacky releases at age 52 with 25 years of pensionable service. To determine her reduction, consider which of the calculations below provides the lowest reduction:
Calculation 1:
5% × (60 minus Jacky's age)
5% × (60 - 52) =
5% × 8 = 40%
40% reduction, which means Jacky would receive a pension of 60% of the amount from the formula.
or
| The greater of… | ||
|---|---|---|
| 5% × (55 minus Jacky's age) 5% × (55 - 52) = 5% × 3 = 15% |
and | 5% × (30 minus Jacky's pensionable service) 5% × (30 - 25) = 5% × 5 = 25% |
25% reduction, which means Jacky would receive a pension of 75% of the amount from the formula
Answer: The 25% reduction is the lowest, so Jacky gets 75% of her pension according to the formula.
Estimate your pension at release
Your most recent personal Pension Benefits Statement provides you with a summary of your entitlements and their approximate value.
This can be found on the My CAF Pension portal, which can help you estimate your yearly and monthly pension based on the information you enter.
You may also contact the Canadian Armed Forces Pension Centre to get an estimate of your pension.
Pension benefits available at release for those under age 50 with 2 or more years of service
If you release before age 50 and have at least 2 years of pensionable service, you are entitled to the value of your pension earned up to the date of your release. Your earned pension includes the share of your pension paid by the Federal Government on your behalf. This pension is a valuable part of your overall compensation as a member of the Canadian Armed Forces (CAF).
Although you may not need this money for many years, you have an important choice to make about your earned pension.
If you are not entitled to an unreduced pension on release and you have more than two years of pensionable service you are entitled to a deferred pension, payable at age 60 or as early as age 50 with a reduction (see calculation above).
If you are entitled to a deferred pension and are under age 50 on release you may opt for a transfer value instead.
A transfer value
Transfer the value of your earned pension out of the pension plan as a lump sum. The amount of money you transfer is called your "transfer value". You can choose to transfer the lump-sum, to the maximum allowed by the Income Tax Act (ITA), to:
- a locked-in retirement plan, such as a locked-in registered retirement savings plan (RRSP) or a locked-in retirement account (LIRA)
- an insurance company, to purchase a pension or
- to your new employer's registered pension plan (RPP), if that plan accepts transfers
Consider carefully when making your decision.
Check out the Scenarios to see examples of deferred pensions and transfer values at release.
You may also be entitled to severance pay when you release (not applicable to Reservists in the Reserve Force Pension Plan).
Benefits provided at release with fewer than 2 years of pensionable service
You receive a refund of your contributions, plus interest. You can choose to:
- take your contributions, plus interest, in cash less income tax or
- transfer your contributions, plus interest, to a registered retirement savings plan (RRSP). If you do, no income tax is deducted
Factors to consider when choosing between a deferred pension and a transfer value
| If you take a deferred pension | If you choose a transfer value |
|---|---|
|
|
How a pension benefit option is selected at release
Once the Government of Canada Pension Centre is notified of your release, the Pension Centre will provide you with a personalized Pension Benefit Options Statement outlining your pension choices.
Find more information at Pension Entitlement.
Impact of releasing and working for the Federal Public Service or the Royal Canadian Mounted Police
Contact your Pension Centre at the Federal Public Service or at the Royal Canadian Mounted Police for information on whether or not you can transfer or buy back your service.
Factors to consider before transferring pension credits to the Federal Public Service or the Royal Canadian Mounted Police
Note: Not applicable to Reservists in the Reserve Force Pension Plan
The decision of whether or not to transfer your pension credits to the Federal Public Service or to the Royal Canadian Mounted Police (RCMP) is a personal one and depends on many factors. You may wish to consult an independent financial advisor before making the decision.
The following table lists some of the questions you may wish to ask yourself if you are considering transferring your pension credits:
| Question | Consideration |
|---|---|
| Do I expect my salary at the Federal Public Service or at the RCMP to increase during my employment there? | Your pension calculation is based in part on your pay – the higher your pay, the higher your pension. |
| Am I eligible for an unreduced pension from the Regular Force Pension Plan? | In the Regular Force Pension Plan, you are eligible for an unreduced pension after 25 years of CF service with no age restriction. Under the Federal Public Service pension plans, you have to be at least age 55 to be eligible for an immediate unreduced pension. |
| Do I plan on staying at the Federal Public Service or at the RCMP until age 55 or later? | Transferring your service may allow you to retire earlier. |
Transfer of pension credits to employers outside the Federal Public Service or the Royal Canadian Mounted Police
You can transfer the value of your pension to another employer's pension plan, if that plan accepts the transfer. Consider your decision carefully, since it may not always be to your advantage. Inquire with your new employer about how your transferred funds will be treated.
Considerations when choosing what to do with your pension
If you leave the Canadian Armed Forces (CAF) before you are eligible to start collecting your pension, you will need to make a number of financial decisions, including what to do with the money you have accumulated in your pension plan. These decisions can affect your financial security for the rest of your life. Even if you have only a few years in the CAF, your pension is a valuable asset and can make a difference in financial security at retirement down the road.
It is important to weigh your options carefully to make an informed decision. Be sure to take your entire financial situation into account before making this decision.
For assistance with these decisions, you may wish to seek the advice of an independent financial advisor. An independent advisor can be a financial planner, an actuary or an accountant whom you trust to give you impartial advice and who is qualified to do so. However, remember that as a CAF member, you have exclusive access to Service Income Security Insurance Plan (SISIP) Financial Services, a division of the Canadian Forces Personnel and Family Support Services. Their team of certified financial planners and licensed insurance representatives can help you access your financial status at time of release.
What happens when you have no paid service in the Reserve Force for 12 months
Your participation in the pension plan ends and the Government of Canada Pension Centre will advise you of your pension options.
Contact Canadian Armed Forces Pension Centre for more information.
Availability of a deferred pension estimate at release
Contact Canadian Armed Forces Pension Centre for an estimate of your deferred pension if you release today or in the future.
Steps to take for your pension when you are ready to release
1. Buy-back estimate
If you have not missed the buy-back deadline and you previous service that you can buy back, you may wish to examine the benefit of buying back that service. Buying back service may increase your pension, deferred pension or transfer value. It may also increase the pension payable to your survivor or children and you can make payments in monthly life-insured instalments up to age 65 or for 20 years, whichever is longer.
For more information see Service buyback
2. Pension estimate
To obtain an estimate of your pension entitlement and the choices available to you at release, contact the Canadian Armed Forces Pension Centre
3. Consider consulting an independent financial advisor
To assist you with your decisions, you may wish to seek the advice of an independent financial advisor
4. Contact your Unit
Contact your Unit to ensure that your release date has been recorded.