Pension transfer out 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 out” situation, it is your new employer’s pension plan who will provide you with your estimate. However, information from the Royal Canadian Mounted Police (RCMP) Pension Plan is needed in order to do this.

The estimate will provide you:

• the years of pension service you would be credited under your new 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 your new employer’s pension plan is less than the pension service you had under the RCMP Pension Plan. If this happens, you will be advised of the cost to purchase the period of pension 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 new employer’s pension plan is more than the pension service you had under the RCMP Pension Plan. If this happens, the RCMP 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 your new employer’s pension plan than you had under the RCMP Pension Plan. You will be advised of any options available for the balance of the funds not transferred, including any tax implications, if applicable.

Requesting an estimate

If a Pension transfer agreement (PTA) exists with your new employer’s pension plan and you wish to request an estimate to transfer your RCMP pension to their pension plan, you must contact your new employer’s pension plan and they will send you a letter with the applicable forms and instructions.

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

Your annual RCMP pension statement provides details about your individual RCMP pension information, such as your estimated pension benefit amounts, pension service and transfer value as of the statement calculation date. With your annual pension statement and details of your new employer’s pension plan, 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.

In addition to your annual pension statement, if you are still an active RCMP employee, you can access the online personalized pension tools to perform calculations and estimates of your RCMP pension using your real-time data, with the understanding that they cannot be used to estimate what your pension would be with another plan under a PTA transfer. You can also contact the Government of Canada Pension Centre to speak with a Pension expert who can assist you with any questions you may have about your RCMP pension.

Transfer out process from my pension with the RCMP to my new employer’s pension plan

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

Step 1

You must contact your new employer’s pension plan to let them know you are interested in transferring your RCMP pension to their pension plan, as well as contact the Government of Canada Pension Centre to let them know.

Step 2

Your new employer’s pension plan will send you the applicable transfer request form with instructions on which sections to complete. You must then send the original to the Government of Canada Pension Centre and a copy to your new pension plan, ensuring to keep a copy for yourself as well.

Step 3

The Government of Canada Pension Centre 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 the RCMP Pension Plan. They will then return it to your new employer’s pension plan.

Step 4

Your new employer’s pension plan will then prepare and send you an estimate advising how much pension service the monetary amount of your RCMP pension benefit will purchase under their pension plan. You will also receive instructions on how to proceed with a pension transfer.

Step 5

If you decide you want to transfer the funds from your RCMP Pension Plan to your new employer’s pension plan, you will be required to submit the applicable transfer form to your new employer’s pension plan^{footnote 1}. They will then request the funds from the RCMP Pension Plan.

Step 6

The RCMP Pension Plan will transfer the funds to your new employer’s pension plan and your new 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 the RCMP and the Pension transfer out considerations  before making a decision to transfer your pension credits.

If you have outstanding elective service (service buyback) payments or deficient leave without pay contributions

If you opt for a pension transfer, only the service paid for up to the date of the option can be included in the pension transfer. If you have outstanding elective service payments or deficient leave without pay contributions, you will be given an opportunity to remit any amounts owing so that all of your service is included. You should contact the Government of Canada Pension Centre to discuss your specific situation.

For additional information, refer to the Service buyback package and Leave without pay information package.