Commission administrative des régimes de retraite et d'assurances. 
 

Questions on Transitional Dispositions – Phased Departure


 

On February 22, 2012, the Chair of the Conseil du trésor, Michelle Courchesne, tabled in the National Assembly Bill 58 This link will open in a new window. (the Act to amend the Act respecting the Pension Plan of Management Personnel and other legislative provisions), which is aimed at amending certain public sector pension plans. The bill can be consulted on the website of the National Assembly. However, remember that the provisions are not yet in force and may be amended, should they be adopted.

More specifically, the bill would amend the pension eligibility criteria for members of the Pension Plan of Management Personnel (PPMP).

The following proposed amendments would come into force as of January 1, 2013:

  • The transition from Factor 88 to Factor 90 (age + service for eligibility), while retaining the minimum age of 55;
  • The elimination of the criterion of 35 years of service with no minimum age (with the application of Factor 90, it will be possible to receive an immediate pension without reduction at 55 years of age with 35 years of service).

Furthermore, the reduction owing to receiving a pension earlier applicable to an immediate pension with reduction and a deferred pension with reduction would increase 3% to 4% per year of earlier retirement. An immediate pension is a pension generally payable to members as of the day following the date of the end of membership in the pension plan. A deferred pension is payable at a subsequent date to members who are not eligible for an immediate pension on the date that their membership ends.

Given the changes that would be made to the pension eligibility criteria, the bill contains a transitional provision regarding various agreements for the transition from work to retirement that can be entered into between an employee and an employer, particularly a phased departure agreement. Note that a member who is becoming qualified at the time an agreement is entered into must be qualified for the PPMP when the agreement ends, in order to take retirement pursuant to the PPMP criteria.

Phased departure is a measure by which active members, that is, members accruing credits in a pension plan, reduce the number of hours worked before retirement, without reducing their service or salary normally recognized by their pension plan.

For those participating in the Retirement Plan for Senior Officials (RPSO), the terms of phased departure provided for in their working conditions are not modified by the bill as tabled.

1. What determines the provisions of the legislation respecting the PPMP that apply to me?

To enter into a phased departure agreement, it is necessary to obtain, from CARRA, confirmation of your eligibility for retirement at the end of the agreement. It is the date of receipt by CARRA of your request for confirmation of eligibility for retirement that determines the applicable provisions:

  • The provisions as they read before the tabling of Bill 58, i.e. before February 22, 2012;
  • The transitional provisions provided for in Bill 58, i.e. from February 22 to May 21, 2012;
  • The provisions of Bill 58, as they would read should the Bill be adopted as tabled (the provisions in force on January 1, 2013).

To submit your application for confirmation of eligibility, you can use the form This link will open in a new window. available on the CARRA website.

2. What happens if I entered into a phased retirement agreement with my employer before the date of tabling of the bill?

If you entered into an agreement with your employer, the provisions of the legislation respecting the PPMP, as they read before the tabling of the bill, would be maintained until the agreement ends, that is, for a maximum of five years (i.e. the provisions regarding the criteria of eligibility for an immediate pension and the percentage of reduction applicable to the pension, should it be received earlier). In that case, CARRA must have received the application for confirmation of eligibility for retirement at the end of the agreement before the date of tabling of the bill, i.e. no later than February 21, 2012.

3. What happens if I plan to enter into a phased departure agreement with my employer as of the date of tabling of the bill?

If you plan to enter into a phased departure agreement, the provisions of the legislation respecting the PPMP, as they read before the bill was tabled, would be maintained according to the following conditions:

  • The phased departure agreement must be entered into within 90 days of the date of tabling of the bill in the National Assembly, i.e. from February 22 to May 21, 2012 inclusively;
  • The agreement must begin to apply no later than September 1, 2012;
  • Retirement must begin in the two years following the date on which the phased departure agreement begins to apply, but no later than September 1, 2014;
  • It is necessary to obtain, from CARRA, confirmation of the member’s eligibility for retirement at the end of the phased departure agreement in order to enter into the agreement.

4. What should I do if I want to enter into such an agreement under the transitional provision?

It is important to point out that it is up to your employer to decide whether you may enter into a phased departure agreement (progressive retirement) and to determine with you the terms of the agreement.

Therefore, if you want to enter into a phased departure agreement (progressive retirement), you must first go to see the person in charge of the administration of pension plans for your employer. That person is generally in the human resources department.

Subsequently, you will fill out together the form entitled "Application for confirmation of eligibility for phased departure (progressive retirement)" (267A PPMP ‒ Transitional measure) so that CARRA can confirm for your employer that you will, in fact, be eligible for a retirement pension at the end of the agreement. The form must be duly completed out and signed by the employee and the employer. CARRA must receive the form during the period from February 22 to May 21, 2012 inclusively.

4.1. In the case where a buy-back of service is required to reach the pension eligibility criteria at the end of the phased departure agreement

If you are currently paying amounts to cover the cost of a buy-back, availing yourself of a phased departure agreement could require modification of the terms of payment determined when the buy-back proposal was accepted, so that you can pay the total cost of the buy-back before the date of your retirement, i.e. in the two years following the date on which the agreement begins to apply.

If you have submitted a buy-back application and you have not yet received the buy-back proposal, the application will be dealt with as soon as possible, provided CARRA has all the information required to process it. In addition, you must pay the cost of the buy-back before the date on which you retire, i.e. in the two years following the date on which the agreement begins to apply.

If you have not yet submitted your buy-back application, you must provide the required information, which is in the following forms:

Furthermore, you must pay the cost of the buy-back before the date on which you retire, i.e. in the two years following the date on which the agreement begins to apply.

4.2. In the case where a buy-back of service that is under way is not required to reach the pension eligibility criteria at the end of the phased departure agreement

The fact that you avail yourself of a phased departure agreement and the cost of the buy-back of service is being paid could require modification of the terms of payment determined when the buy-back proposal was accepted, so that you can pay the total cost of the buy-back before the date on which you retire, i.e. in the two years following the date on which the agreement begins to apply.

5. If the phased departure agreement is extended and the person retires after the time provided for in the transitional provision, what pension eligibility criteria would be applied?

In the case of an agreement entered into before February 22, 2012 (the form entitled "Application for confirmation of eligibility for phased departure (progressive retirement) This link will open in a new window.", received by CARRA before that date), in certain situations extension of the agreement and postponement of retirement have no effect, since the provisions of the Act respecting the PPMP, as they read before the bill was tabled, would be maintained.

In the case where an agreement is entered into in the 90 days following February 22, 2012 [the form entitled "Application for confirmation of eligibility for phased departure (progressive retirement)" (267A PPMP ‒ Transitional measure), received by CARRA from that date until May 21, 2012 inclusively], if retirement is taken after the period of two years following the date on which the agreement began to apply, regardless of the reasons for postponement, the new pension eligibility criteria proposed in the bill must apply.

6. May I avail myself of a phased departure agreement if I enter into an agreement of one to five years, i.e. the duration provided for by the provisions of the legislation as it read before the tabling of the bill?

Yes, it is always possible to enter into an agreement that would not meet the conditions described in the transitional provision, for example, a duration of more than two years. In those cases, it is the criteria of eligibility for retirement, as they would read after the adoption of the bill that would apply if retirement is taken after December 31, 2012. The only effect of the transitional provision is to specify the cases in which the criteria of eligibility for retirement, as they read before the bill was tabled, could be maintained beyond that date.

7. Does the transitional provision contemplate only phased departure agreements?

No. It also contemplates other agreements referring to measures of transition to retirement. These agreements are also provided for in the working conditions and must be entered into with the employer (authorization).

The agreements require, between the date they come into effect and the date they end, the application of a measure of transition, such as a reduction in work time, or using up a reserve of leave or a departure allowance. Furthermore, they must necessarily culminate in retirement. The sole fact of announcing that retirement will be taken on a given date does not constitute an agreement.

8. How can I find out whether the phased retirement agreement entered into with my employer is valid?

At the time of your application for a retirement pension, CARRA will check whether your retirement stems from a phased departure agreement contemplated by the transitional provision, and will ask for any necessary proof. You must therefore enter into a formal agreement with your employer. CARRA will then examine the criteria of eligibility for retirement that must apply, depending on the case.

 

 

For more information on the transitional provision regarding phased departure, ask your employer.

For details about the other legislative provisions, see Bill 58 This link will open in a new window..

 

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Just dial:

418 643-4881 (Québec region), or
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CARRA’s offices are open during these hours:
From Monday to Friday between 8:30 a.m. and 4:30 p.m.

If you wish to plan a meeting with an agent, it is recommended to ask for an appointment. To do so, you simply have to call us.

You can come to CARRA’s offices, which are located on the 5th floor, or write to:

Commission administrative des régimes
de retraite et d’assurances
475, rue Saint-Amable
Québec (Québec) G1R 5X3

 

You can also submit the form entitled "Application for confirmation of eligibility for phased departure (progressive retirement)" (267A PPMP ‒ Transitional measure) to us using these two means of communication:

By e-mail

RRPE-mesure.transitoire@carra.gouv.qc.ca

By fax

 418 644-5199