Pension transfer in administrative process

The importance of an estimate

The existence of an agreement between pension plans does not necessarily mean that a pension transfer will be to your advantage. The estimate stage is critical because it provides you with information to assist you in making a decision about whether to proceed with a pension transfer. Requesting an estimate does not obligate you to proceed with the pension transfer.

Pension estimate provider and content

It is only the plan receiving the transfer of funds that can provide the estimate. The estimate lets you know how many years of pension service the transfer will allow you to add to your new employer’s pension plan.

Therefore, in a “pension transfer in” situation, it is the Royal Canadian Mounted Police (RCMP) Pension Plan, via the Government of Canada Pension Centre, who will provide you with your estimate. However, information from your former pension plan is needed in order to do this.

The estimate will provide you:

• the years of pension service you would be credited under the RCMP Pension Plan as a result of the pension transfer
• whether there will be a shortfall or an excess:
  • A shortfall happens—if the years of pension service you would be credited under the RCMP Pension Plan is less than the pension service you had under your former employer’s pension plan. If this happens, you will be advised of the cost to purchase the period of service not covered by the transfer. You are under no obligation to purchase it.
  • An excess happens—if the years of pension service you would be credited under the RCMP Pension Plan is more than the pension service you had under your former employer’s pension plan. If this happens, your former employer’s pension plan will only transfer the funds needed to credit you with the equivalent pension service you had under their pension plan. You cannot be credited with more pension service under the RCMP Pension Plan than you had under your former employer’s pension plan. You will be advised by your former pension plan of any options available for the balance of the funds not transferred, including any tax implications, if applicable.

It is important to note that your RCMP salary at the time your request for an estimate is received, is the salary that will be used in the final calculation.

Requesting an estimate

If a Pension transfer agreement (PTA) exists with your former employer’s pension plan and you wish to request an estimate to transfer your pension to the RCMP Pension Plan, contact the Government of Canada Pension Centre and they will send you a letter with the applicable forms and instructions.

It is important to note that the RCMP can only provide a pension transfer estimate once you have terminated with your previous employer and have joined the RCMP Pension Plan. This is because in order for the RCMP to produce a pension transfer estimate, they require your pension information from your previous pension plan, such as pensionable earnings, years of service and the monetary value of your pension benefits as of your date of termination with your former pension plan. In addition, the RCMP can only calculate your entitlement under the RCMP Pension Plan using actuarial assumptions that take into account certain factors, such as the date you joined the pension plan.

You should have received annual pension statements from your previous pension plan that provide details about your individual pension information under their plan, such as your estimated pension benefit amounts, pension service and transfer value as of the statement calculation date. With your latest annual pension statement and details of the RCMP Pension Plan available on the Pension and benefits for the Royal Canadian Mounted Police website, you can get a sense of what each plan has to offer. You may wish to seek the advice of an independent financial advisor to help you compare pension plans. An independent advisor can be a financial planner, an actuary or an accountant you trust to give you impartial advice and who is qualified to do so.

You should contact your previous pension plan if you have not received annual pension statements or have questions about your pension plan information with them. You should contact the Government of Canada Pension Centre if you have questions about the RCMP Pension Plan.

Estimate amounts are not guaranteed

The amounts in the estimate are not guaranteed. Different factors, such as the amount transferred from your former employer’s pension plan being different from the amount they provided for the estimate, could change the amount of pension service you will be credited under the RCMP Pension Plan.

Career decisions and pension transfer estimates

The decision to stay or leave an employer is dependent on many factors that are unique and personal to each individual. Although pensions are an important part of the decision, many other important factors should also be considered such as salary, employment and career goals, seniority/rank, total compensation and benefits, location, family, etc..

Transfer in process from a former pension plan to the Royal Canadian Mounted Police

If a PTA exists with your former pension plan and you wish to initiate the process of transferring your pension to the RCMP Pension Plan, you must contact the Government of Canada Pension Centre and they will send you a letter with the applicable forms and instructions. You must also advise your former pension plan. The following is a summary of the process:

Step 1

You must contact the Government of Canada Pension Centre to let them know you are interested in transferring your pension from a former pension plan to the RCMP Pension Plan, as well as contact your former pension plan to let them know.

Step 2

The Government of Canada Pension Centre will send you a “Request for transfer estimate” form with instructions on which sections to complete. You must then send the original to your former pension plan and a copy to the Government of Canada Pension Centre, ensuring to keep a copy for yourself as well.

Step 3

Your former pension plan will complete their portion of the form and provide your pension information, such as pensionable earnings, years of service and the monetary value of your pension benefit under their plan. They will return it to the Government of Canada Pension Centre.

Step 4

The Government of Canada Pension Centre will then prepare and send you an estimate advising how much pension service the monetary amount of your former pension benefit will purchase under the RCMP Pension Plan. You will also receive instructions on how to proceed with a pension transfer in and a “Request for transfer” form.

Step 5

If you decide you want to transfer the funds from your former pension plan to the RCMP Pension Plan, you will be required to submit the "Request for transfer" form to the Government of Canada Pension Centre^{footnote 1}. The Government of Canada Pension Centre will request the funds from your former pension plan.

Step 6

Your former pension plan will transfer the funds to the RCMP Pension Plan and your RCMP pension will be adjusted to reflect the transfer^{footnote 2}.

It is recommended that you keep copies for your records of any completed forms you send out during the process.

Make sure you carefully examine your pension benefit options with your previous pension plan and the Pension transfer in considerations before making a decision to transfer your pension credits.