Reduction of pension indexation payment
March 16, 2016
From RCMPVA President David Leblanc
During the month of January 2016, 817 RCMP pensioners received written notice from the RCMP Pension Centre announcing a reduction of their pension indexation payment,
commencing on their January 2016 payment.
At my request, Veteran Ron Lewis, Association Chief Advocate, and Veteran Steve Walker, RCMP Veterans’ Association representative on the Pension Advisory Committee (PAC) and the Pension Financial Oversight Committee (PFOC) contacted the RCMP and RCMP National Compensation Services to seek clarification about this reduction of payment notice. During the transition of the administration of the RCMP Pension to Public Works and Procurement Canada, an error in the way indexation of pension entitlements is calculated was discovered.
The error, which has been ongoing since 1982, only affects those pensioners who retired on the last day of a month. Paragraph 39(2)(b) of the RCMP Superannuation Act states that for the purpose of calculating the indexation entitlement for the retirement year, only the number of complete months following the retirement month up to the end of the year are used.
For example, if the member’s last day was April 30, the retirement month would be May; the indexation calculation month would be June, and there would be 7 complete months in the retirement year.
Subsection 39(3) of the RCMPSA defines the retirement month as the month a member ceased to be a member of the Force. For example, if a member’s last day in the Force was April 30, the member’s first day as a retired member would be May 1. The retirement month would be May. The error affecting the 817 pensioners has been rectified and the corrected and reduced payment amount appeared on the January 2016 pension payment. The issue ofrecovery of overpayments has not been resolved. Each individual’s overpayments will need to be calculated which is a labour-intensive process.
The overpayment review will start in April 2016. The RCMP is exploring the available options to resolve the overpayment issue, and once the appropriate method has been determined, the affected pensioners will be contacted directly. The RCMP Veterans’ Association will remain in contact with the RCMP as this issue progresses and will pass along any relevant information that we receive to you.
Contributions and benefits under the RCMP Pension Plan are coordinated with those under the Canada Pension Plan (CPP) and the Quebec Pension Plan (QPP). As a result, the RCMP Pension Plan provides a lifetime pension and a temporary bridge benefit. When you reach the age of 65 or start receiving CPP/ QPP disability benefits before age 65, the bridge benefit portion of your RCMP pension stops. Therefore, it is crucial upon receipt of CPP/QPP disability benefits, that you immediately advise the Government of Canada Pension Centre at 1-855-502-7090. Failure to do so will result in an overpayment of pension benefits.