Canadian military veterans pension clawback: A fact check for polticians

Canadian military veterans pension clawback: A fact check for polticians

Ottawa : Canada | Oct 24, 2012 at 6:13 PM PDT
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Under present Canadian legislation a miltary pension is cut back at age 65. The claw back is, according to the government, part of a negotiated deal when soldiers were first required to contribute to the Canada Pension Plan (similar to Social Security in the U.S.).

Needless to say the legislation has been a thorn in the side of Canadian veterans. The clawback can be several hundred dollars. In the author`s case it was $700, essentially reducing the benefit of the Canada Pension Plan, which not unlike social security, is at best a supplement to a pension plan.

Peter Stoffer, Member of Parliament and part of the New Democratic Party caucus, has on two occasions introduced a private members bill to eliminate this clawback. On both occasions the full conservative caucus voted against the bill. With a majority of seats in parliament the bill was easily defeated.

Veterans have naturally protested this action by the government and one 23 year veteran has returned his medals to Governor General in protest. Robin, who is a friend, lives in Gumbo, Newfoundland. His military pension amounts to $1700, but the government deducts $700 because of the CPP payment.

``Robin Brentnall, a 23-year veteran of the Canadian Forces, retired last month after battling with various ailments, including a neck injury and stroke.

Because his injuries were the result of his job, the retired Sergeant is entitled to receive Canada Pension Plan (CPP) payments of $700 per month. His military pension is worth $1,700 a month, but the federal government deducts $700 from that because of his CPP payment.

Mr. Brentnall said he is unable to do heavy lifting, needs help writing, has trouble dealing with stress, and tires easily. When he gets tired, the right side of his body goes numb. Combining these factors, it is impossible for him to perform any sort of job, leaving him dependent on CPP and his pension.`` Source: Jack`s Newswatch

On questioning the governments reason for voting against the bill, the governments response has always been similar. An example of the response is featured to below. This was received by the author after querying his member of parliament, a conservative, Brian Storseth:

``Regarding the RCMP/Military pension issue, it is important to
underscore that the Government of Canada recognizes and appreciate the remarkable contributions made by serving and former members of the Canadian Forces (CF). This is why we provide them with a flexible and generous pension plan that offers the financial security our veterans deserve.

Bill C-215, a private member's bill introduced in the House of Commons on June 15, 2011, claimed that the design of the CF pension plans was flawed, and that the bridge benefit which pensioners receive between the date of retirement and age 65 is unjustly 'clawed back' when they
begin receiving full Canada Pension Plan (CPP) benefits. To correct this situation, the Bill proposed to make the bridge benefit permanent.

As you may be aware, Bill C-215 was defeated in Second Reading on Feb. 15, 2012. However, I would like to take a moment to give you some
background on this issue. Quite simply, the information contained in that Bill was false.

The CF pension plans are operating exactly as they were designed to; pensioners are receiving the full pensions they paid for and to which
they are entitled.

Both the Regular and Reserve Force pension plans provide time-limited bridge benefits that bring stable retirement income until age 65, when
unreduced CPP benefits become available. Bridge benefits, therefore, are meant to provide financial security for members until they begin receiving CPP benefits. They are not meant to last indefinitely and as such, they are not funded to last beyond a pensioner's 65th birthday.

If adopted, Bill C-215 would have created a one-time past service liability of $6.6 billion and an increase to the ongoing annual cost by two percent of payroll for taxpayers and CF members. These figures speak only to the costs of extending bridge benefits for CF members. Since the Bill also proposed extending these benefits for the RCMP,
which would add another past service liability of $1.7 billion, the overall cost to taxpayers would in fact be $8.3 billion of accrued liability. In addition, the annual amounts that would be required from members of the CF and RCMP or the government to sustain the proposed plan would be $129 million a year.

The sponsor of this Bill has stated on a number of occasions that the cost of the proposed changes could be paid for using the Employment Insurance (EI) premiums of CF members, under the belief that those members will never need to access EI. Again, this is false. CF members can and do receive benefits through the EI program. For example, approximately 2500-2700 members receive EI benefits while on maternity/paternity leave each year.

Members who retire from the CF without a pension can also be eligible to receive EI benefits. Moreover, total EI premiums collected from CF members annually amounts to only $56.5 million, nowhere near the projected amount required to sustain the pension plans should these changes be enacted.

To be clear, in some cases a pensioner's overall pension income may decrease at age 65, but this is because the bridge benefit is calculated on CF earnings and years of service, whereas the CPP
benefit is calculated on earnings over a 40-year period. Even in such cases, the bridge benefit has still done the job it was designed for: bridging the period between retirement and eligibility for CPP.``
Source: Email to author.

John Labelle is Veteran Annuity Campaign Coordinator and has addressed this issue to the Prime Minister of Canada. In his letter he debunks some of the, what he calls, distortions by the federal government in regards to this clawback. He points out how many annuitants for military pensions exist and the number over 65. He debunks the estimated cost of enacting the clawback.

His letter to the Prime Ministers is copied below:

Dear Prime Minister of Canada,

For almost seven (7) years, the committee has attempted to get the Government of Canada to terminate the Military/RCMP Veterans CPP Annuity benefit reduction programme at age 65 or sooner if disabled.

The Conservative party answers has been:

The tax payers can’t afford it, It would cost over $7.4 billion dollars to terminate the CPP benefit
reduction programme, Military/RCMP veterans are getting 100% of what they paid for. Government is distorting the facts. Military/RCMP Veterans have never asked for the tax payers to pay extra funds for our Annuity benefits. What we have said is that we want the
Government to stop depleting the surpluses in our Annuity plans. Thus far over 20 billion dollars have been depleted, to pay down the National debt, from our Annuity accounts!

The estimated $7.4 billion dollars determined by your Government to terminate the clawback to Veterans Annuity benefits is an exaggerated statement of facts. Retroactive payments have not been requested. The 31 March 2011 Annual Pension report clearly indicated that there were
86,347 retired Annuitants in receipt of a pension under the CFSA Act and the total cost paid for our Annuity was $2.524 billion. The report also
indicated that only 38,956 Annuitants were over the age of 65.

Annual Pension report facts:

As of 31 March 2011 the net assets held by the Public Sector Pension investment Board, on behalf of the Canadian Forces pension plan and the Reserve Forces pension plan totalled $11,824 billion and the balance in the Canadian Forces Superannuation account totalled $46.041 billion, for a grand total of $57.865 billion dollars.

Prime Minister, Veteran surplus Annuity facts can no longer de denied. The Annual Pension report for the year ending 31 March 2011 clearly indicates that more than sufficient fund are available to terminate the CPP benefit reduction formula imposed on Military/RCMP Veterans and their Families. Surely, the Government of Canada has an obligation to treat its Veterans fairly and with dignity during their Golden years. Let us remember that Veterans and their Families committed to an unlimited liability to serve

Prime Minister enough time as passed; now is the right time to take action and terminate this Military/RCMP Veterans Annuity deduction.

It is the responsibility of all Members of Parliament to stand up for Veterans in their constituency!

The Government of Canada needs to fairly treat its Veterans and embrace them throughout the year, not only during Remembrance week!


John Labelle Veterans Annuity Campaign

This campaign has been ongoing for some time, When the deduction for CPP was first introduced by the federal Liberals at the time, those of us serving were never asked about or informed about this conveniet arrangement. To be sure veterans, who retire with an annuity, will never collect Employment Insurance, after paying into the fund for decades. It really served as an aditional tax on military personel. As a reward military retirees and disabled personnel get their pensions clawed back. It is time for the Canadian government to stand up and be counted and support its veterans.

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Canadian Soldier
Canadian Soldiers stand on guard for thee. Now it`s the government`¸s turn
Karl Gotthardt is based in Edmonton, Alberta, Canada, and is an Anchor on Allvoices.
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