Future of Government Pensions (PS, CF & RCMP) & CF pension "double-dip"

[McG]

There are precedents for companies effectively shooting themselves in the foot by contracting out work. No benefits, higher pay, and a questionable cost savings to the company. Those contractors can wind up being ex-employees hired back as SMEs at higher pay.

That's nice.  I am also largely opposed to using contractors.  I'd much rather us military or public servant.

The existing structure has the potential to keep folks inside the CF.  If you don't get a wonderful flood of folks transferring into the "limited reg force", as in you get the career reservists but semi-retired reg force who'd rather work civvy-side and keep their pension, your scheme's going to see a whole lot of contractors hired to make up the shortfall. And where do those contractors get recruited from? With time lag, the retired class-B guys who didn't find a civvy job they liked better and newly-releasing reg force guys.

I think a large majority of people who go the double-dipping route are doing it because they want to stay in the military but are done with postings.  Eliminating the double-dip will not impact the choice of these people - they would still take the limited obligation ref force TOS option.  However, there is another large group that wants to remain within the CF but sees financial incentive in the double-dip.  This group will choose differently with the removal of the double-dip and will choose full obligation over limited obligation TOS.

I've also been talking about better synchronization with all the other federal pensions.  Currently, even if a public servant has enough years of pensionable service, following retirement the annuitant payments do not begin until age 55 or 60.  Harmonization on this point could also aid in retention.  Once a service member has enough years of pensionable service, they could convert to limited obligation TOS and receive top-up money, they could switch to the PS and (if in a lower paying job) receive top-up money, they could continue to serve under full obligation TOS and build the pension, or they they could leave the Federal Government and wait until CRA before seeing any pension money.

I don't see how that could be possible to both receive a pension and simultaneously be paying into it. 

It is possible if TB can be sold on it, and I think there is a fairly good case that this would be a reasonable retention mechanism given the high demands a CF career places on a member.  Similar arguments could also be made for RCMP in a harmonized Federal pension program.

Perhaps the problem is not too few people (either Reg or Res Force).  Maybe the problem is too many tasks ?

There is definitely some of that.  I think my proposal also adds further checks for someone to say "no, we are not going to do that" when new full time positions are created.  Currently, almost anyone with a budget can use Class B to empire build.  My proposal would see all full time positions requiring the same processes and approvals for creation as current regular force positions.

 

[George Wallace]

I still can't see any "Double Dippers" taking up any of your suggestions.  Why would they give up a pension. take a reduced wage and reduced pension, or any of your ideas, if they could keep the pension and work a second job anywhere else, including the Public Service, not requiring to take 35 days unpaid Annuitant's Leave.

I could see some "Double Dippers" going for your "Limited Obligation" Reg Force employment, at full wages, and paying into their Reg Force Pension Plan.  Don't forget, they will have to buy back their Class B and other Reserve time, as well, towards their Pension Plan if they do rejoin the Reg Force.  Then I could see some giving up collecting a pension to work, but not under any of your conditions.  Mortgages, Retirement Planning and other expenses and plans for life after work will play heavily in these decisions, as they will not have twenty or thirty years to make these purchases and settle into a community.

 

[Brasidas]

I think a large majority of people who go the double-dipping route are doing it because they want to stay in the military but are done with postings.  Eliminating the double-dip will not impact the choice of these people - they would still take the limited obligation ref force TOS option.  However, there is another large group that wants to remain within the CF but sees financial incentive in the double-dip.  This group will choose differently with the removal of the double-dip and will choose full obligation over limited obligation TOS.

There's still the financial incentive of taking the retirement package and working elsewhere. I can think of a half dozen solid RSS fill-ins at reserve units who'd likely have a hard time justifying to their wives staying in the face of competitive employment alternatives where they could draw their pension.

That changes if you delay when they can draw their pension altogether or aggressively claw it back based on their income. The former's referenced earlier in the thread. But while its in play, the changes you're suggesting are going to be making an impact on these guys sticking around despite your attempts to mitigate it.

[quote author=George Wallace]
I still can't see any "Double Dippers" taking up any of your suggestions.  Why would they give up a pension. take a reduced wage and reduced pension, or any of your ideas, if they could keep the pension and work a second job anywhere else, including the Public Service, not requiring to take 35 days unpaid Annuitant's Leave.

I could see some "Double Dippers" going for your "Limited Obligation" Reg Force employment, at full wages, and paying into their Reg Force Pension Plan.  Don't forget, they will have to buy back their Class B and other Reserve time, as well, towards their Pension Plan if they do rejoin the Reg Force.  Then I could see some giving up collecting a pension to work, but not under any of your conditions.  Mortgages, Retirement Planning and other expenses and plans for life after work will play heavily in these decisions, as they will not have twenty or thirty years to make these purchases and settle into a community.[/quote]

Except that explicitly defeat's one of MCG's goals of stopping the attrition from reg force to reserve class B, unless I'm misunderstanding. Why the hell wouldn't anybody transfer to this "limited reg force" if they got their full pay and increasing pension? Slower promotion in the upper ranks?

 

[George Wallace]

Except that explicitly defeat's one of MCG's goals of stopping the attrition from reg force to reserve class B, unless I'm misunderstanding. Why the hell wouldn't anybody transfer to this "limited reg force" if they got their full pay and increasing pension? Slower promotion in the upper ranks?

Exactly.  MCG may be looking at one type of member, while I am thinking of the member who has done twenty-five plus years in the CF, has planned and saved for his/her retirement, and has chosen to still serve his/her nation as a Reservist.  They have done their time.  They still have something to contribute.  They are not paying into a Reserve Pension, but collecting a Reg Force Pension, and if on a Class B of over 365 days are required to take 35 unpaid days Annuitant's Leave a year.  They have set themselves up in the location that they plan on "living out their days", and would see no sense in remaining in the service of the CF if all they could expect was to be "penalized" for doing so.  There are a lot of these guys around, and they have a lot of experience and knowledge that the Reserves will loose in seconds if MCG had his way.

Those who are not Annuitants would not be affected as greatly by any of MCG's suggestions, but they may also not have as much knowledge and experience to contribute to the Reserves.  They would be better off doing a complete CT.

 

[PPCLI Guy]

I'm with you.  I've done 25 years of "career" service in the Regs.  If my skills can be put to good use as a Cl B reservist, where I can take a position, and hopefully stay with it for longer than three years, I'll be happy to continue putting on the uniform (and forgo any hopes of further promotion).  Otherwise, from where I sit, the grass is indeed greener on the other side - even with a modest pay cut to move into a civvy job.

Willing to do it if you can't also draw your pension?  If pension must be deferred until you truly stop serving the Queen?

Didn't think so.

Double dipping must stop.

Dave

 

[SeaKingTacco]

Double dipping must stop.

Okay, then my bet is that the majority of annuitants will not elect reserve service post-regular force service, except possibly Class A.  If I am still so I inclined to work after 25 to 30 years in the CF, I would be out of my mind to not go work for a Defence Contractor (or even Home Depot) and get a wage plus pension and instead go to say 35 years service as a "limited" service Officer.

I recognize that there are some that will go for "limited" service, but they probably were going to stay to CRA anyway.

By all means, get rid of double dipping (it can be argued that the current Class B structure has grossly inflated and distorted our manning situation within the CF)- but be under no illusion about what will happen.  People will follow the money.  Unless you head them off at the pass and make it so that no CF member can get a pension before 55 or 60- regardless of years of service.  This may not be a smart idea either, as years of hard living in combat or in the field may render a pension uncollectable for a significant number of service members.

I don't know what the answer is.  What I do know is that swinging the pendulum all the way over to "no double-dipping" will have negative consequences, too.

Happy New Year, all.  I'm going to bed.

 

[old fart]

Here is what happens to British annuitant undertaking Full Time Reserve Service (FTRS):

“Reserve Service: 31. Abatement of Pension. In accordance with Treasury rules, those in receipt of an Armed Forces pension are liable to have that pension abated on re-employment in the Forces if the combined income from basic pay and pension exceeds the basic pay on their last day of Regular Service (up-rated by RPI since leaving Regular service).

Thus individuals will only be allowed to retain the amount of pension which, when added to their basic pay on re-employment on FTRS, equals the basic pay that they received on the last day of Regular Service (uprated by RPI).
In cases where the total remuneration is greater than the level permitted, the AFPS pension in payment will be abated or suspended until the FTRS commitment is complete.

Where an individual has received resettlement commutation and their pension in payment is subject to abatement in whole or in part, a reduction equal to the amount of pension commuted will be taken from their pension.
Full details are in Reference I. Reservists should take advice from SPVA regarding the implications of an FTRS commitment on AFPS 75 or AFPS 05 and its effect on LS and EDP payments. “

http://www.army.mod.uk/documents/general/din_089.pdf

There are some fundamental differences between the Brits and our own pension scheme which must be understood:

Firstly their pension plan is non-contributory, at any rate that’s the way it's sold to the rank and file (in reality they do pay towards their pension).

Secondly most annuitants are shoved out the door at 22 year point (if they get there).  So if they want to serve on as a Full Time reservists the UK MOD have both the carrot and stick, in that they will allow a member to serve on as a full time reservist providing a salary they ordinarily would not have (havening already been shown the door) while at the same time the possibility of increasing pension final pension benefits. 

Because they know many of the folks with the requisite experience may have little alternative.  They get away with it because slots are limited and thus quite competitive, as for many continued service was the only place they could match their previous income and responsibility.

Underpinning all this is the premise that it just is not possible to gain an increased rate of pay over the equivalent Reg Force member. 

Perhaps if folks in the CF were shoved out the door en-masse at the 22 year point our bean counters could have grounds to work it the way the Brits do; but as we have potential pensionable service to 35 years, the Brit way would likely never work.

But then again, never say never..............

In closing, to accept an FTRS slot usually comes with an expectation that you will or could be deployed.

Old fart out.

 

[armyvern]

I'm still wondering how anyone thinks, that in the long run, the Reg F guy who "double-dips" has it better than the RegF guy who doesn't.

Stats presented by those "anti-double dippers" over in this thread clearly show that the guy who stays Reg F costs more money from the taxpayers coffers than those who don't:

Ok, so I decided to do some quick comparisons here.

Say you've got someone who's deciding whether or not to double dip or not. They're at 20 years in, and have maxed out seniority at Captain. For ease of calculations, let's assume that's 80 grand.

If they were to retire from the reg force, and transfer to reserves, and manage to get a class B, they'll be getting their pension at 40% (32,000), and their salary at 85% of the reg force captain's salary (68000), for a total of 100,000 a year. This is 20,000 a year extra.

Whereas if they stay in, even assuming they never get promoted to major, when they retire, say, 10 years later, they'll still be getting that 80,000 salary, but when they start drawing their pension, it's at 60% vice 40%, $48000.

So, assuming this person wanted to actually retire at the same time, the captain who went Class B that time made a total of 200,000 more than his imaginary reg force counterpart, who will be making 16,000 more on his pension than his imaginary reservist counterpart.

Pure dollars and sense, the Reg Force guy would have to live at least 12.5 years past retirement for his total income earned to exceed that of the Reserve Force guy.

Of course, one you start throwing compound interest into things, it screws stuff my calculations up and sweetens the deal for the dude making the component transfer.

Then this:

Ahhh right good point. That makes the reserve guy's annual income total during the 10 years 13500 higher than the reg force guy's, rather than 20000.

So the reg force dude achieves total income parity after 8.5 years.

Then my view on those stats:

Pariety after 8.5 years --- then all heck breaks loose.

Your RegF guy is getting out at 50 years of age (say he joined when he was 20);
Your RegF (20yr) / ResF (10yr) double dipper also joined at age 20, so is now 50 ...

At age 58.5 they hit wage pariety ... the RegF guy (added by Vern: The guy who stayed RegF) then pulls into the lead handsomely because he's making at least $16 000 more a year on his pension than the double dipper for the rest of his life. If they both die at age 88.5 --- that's --- $460 000 more pensioned out over the 30 years for the guy who didn't double-dip ... almost 1/2 a million.

I love stats and figures ... one can really play with them to make any point they wish to.

Personally, After 20 years service and 9 cost moves ... if I want to retire because I'm sick of it (the moving) ... why the heck shouldn't I be able to get another govnt job? Civvies can retire from their jobs and go onto other jobs earning a 2nd pension; why the heck shouldn't I be able to do same?

Another thread later, I'm still wondering if the argument that the "double-dipper" makes more than the guy who stays Reg does is actually factual - it certainly doesn't seem to be. It certainly, based upon the actual pension figures presented over time, seems to be a strawman arguement.

In my mind, the double dipper earns less over his lifetime than the guy who stays RegF, and by double-dipping, he is still utilizing his skillsets by providing his experience , knowledge and expertize to the ResF - ergo, the taxpayer benefits by actually saving money in the long-run and the ResF benefits by still being availed of those ex-RegF pers skillsets; a bonus to both the RegF & ResF.

Maybe I'm missing something. No one "anti-double-dipping" addressed my above post in the last thread to point it out to me though. Perhaps I'm still missing something, but I can't for the life of me figure it out.

 

[Monsoon]

Maybe I'm missing something. No one "anti-double-dipping" addressed my above post in the last thread to point it out to me though. Perhaps I'm still missing something, but I can't for the life of me figure it out.

Whatever you may be missing (and I certainly can't see what it is), the "anti-double-dippers" have also missed the fact that people who get out of the Reg F to go class "B" generally do it for stability - that is, they're not taking postings away from home. That, coupled with the fact that reservists on contract in their local area don't get PLD, and the fact that many class "B" contracts forbid cost moves, means that the Reg F fellow in the calculation above will be costing an extra $7-8K more per year while employed than his class "B" counterpart, plus posting move expenses. It's just possible that the much-derided HQ "bean counters" have run the math on all of this and reached the same conclusion you did.

Anyway, if the principle is just that people on a government pension shouldn't be able to draw even a reduced government salary, wouldn't that also preclude Reg F pensioners from serving class "A"? That seems like throwing out the baby with the bathwater to me.

 

[George Wallace]

I am wondering what the preconceived perceptions are of who a "Double Dipper" may be?

They definitely are not 18 or 20 year olds who think that they are invincible, nor the more mature 30 year olds; as none of these members have been around long enough to earn a pension and become a "Double Dipper". 

They would be the over 45 year old, who has done their time and earned a pension, who has a work ethic and just can't handle the sitting around the house vacuuming the carpet, who is still able to pass a CF Expres and BFT, but not likely to survive long humping a ruck up and down mountains in a Infantry Bn in Afghanistan.  A person who may have lost most of his/her pension to their "Training Spouse".  A person who is looking towards a comfortable retirement in a few years without the fears of sitting on a piece of cardboard, with their faithful dog, in front of a storefront downtown begging for money and sleeping in a Shelter. 

Is there anyone here that thinks a life of Service will make one a millionaire?  The Government, in all Departments, has numerous cases of fraud and persons who have overcharged for their services, or found ways to embezzle.  I have yet to notice one who was formerly a member of the CF.  Double Dippers are not the problem.  The pittance that they add to Government expenses is so trivial that any savings made by ending them wouldn't affect the budgets of any Dept.  Perhaps catching guys who bill the Government for billions of dollars for Services, Supplies, or Construction not delivered would be a better plan, or perhaps incarcerating those caught for theft, rather than promoting them.

Young 'invicible' members making decisions, as opposed by the 'seasoned old hands', has always been an interesting proposition.  The results have quite often not been as desireable as they envisioned. 

 

[armyvern]

They would be the over 45 year old ...

Hey now!! Don't call me old!

12 Jan = Vern is pensionable = Vern at 41.

I guess, I should get out now and start double-dipping before some misguided soul tells me I am not able to do so any longer.

But ... wait a minute ... If I do that - I'll lose 1/2 a million by age 88 ... Hmmmmmmmm. decisions, decisions - NOT!!

 

[George Wallace]

The 20/40 Plan membership is getting smaller every day.    ;D

 

[armyvern]

The 20/40 Plan membership is getting smaller every day.    ;D

I'd say George!! Given that the 20/40 plan offer ended before I even joined the CF!! I did 3 to start then was offered my IE during my 18th year (with pension ability kicking in at 20 yos) ... just a couple of months before they implemented the newest "25 year minimum requirement" ... I am one lucky beotch and now consider myself my "own" career manager. 

 

[Journeyman]

....and now consider myself my "own" career manager. 

Just remember, a career spent "burning bridges" does not make you a qualified engineer.    ;D

 

[Zoomie]

Sign me up for the double-dipping route - if that gets canned, Home Depot it is...

Almost every skilled PRes job in blue is a double-dipper (some exceptions).  Necessary staff jobs, backfill pilot/acso/fe postions get filled by that route.  I know that once I achieve 20 years of RegF time, I can elect to leave and receive my non-indexed pension.  If I get another job as a Class-B reservists, sobeit - I retired, what I do after that is no-one else's concern.

 

[armyvern]

Just remember, a career spent "burning bridges" does not make you a qualified engineer.    ;D

Can you show me how to go about removing "Engineer Qualified" from my CV? I could certainly use your expertize to help with that. >

 

[Loachman]

Ending this would likely cripple the air reserve, mainly on the senior tech side in my unit. They'd still collect their pensions, but could make more money working for somebody else and we'd lose out big time. It's only a handful of guys, but they're in key positions and their experience and knowledge and dedication is invaluable. There is a huge shortage of Reg Force techs that come anywhere close, except perhaps in the dedication department.

It's not worth it.

 

[Nfld Sapper]

Can you show me how to go about removing "Engineer Qualified" from my CV? I could certainly use your expertize to help with that. >

Not the first time I have seen a Thumper Head-Bin Rat  ;D

One even worked next door to ya in Gagetown......

 

[Jed]

Right on George! Why are so many bashing the Double Dippers? I am currently one of them but anyone getting to this point has put in a long Reg Force career and has hit a transition point in their life. It works for the retiring member and for the CF. I do not know of any Double dippers that do not have a plan B that does not involve serving in the CF. Anyone who has TI knows the CF always wins when it comes to money. If there is a cheaper way to get the required personnel, through contracting, using a civi, using a Publc servant, it will be used.

 

[observor 69]

Ending this would likely cripple the air reserve, mainly on the senior tech side in my unit. They'd still collect their pensions, but could make more money working for somebody else and we'd lose out big time. It's only a handful of guys, but they're in key positions and their experience and knowledge and dedication is invaluable. There is a huge shortage of Reg Force techs that come anywhere close, except perhaps in the dedication department.

It's not worth it.

I am a retired Avionics tech living in the GTA. As the Superintendent in the apartment building I live in I deal with techs on a regular basis, elevator techs, HVAC Heating Ventilation Air Conditioning, electricans etc.
When I check the pay scale for a similar tech in the military I come up with a number like $61k. I am fairly sure a good HVAC tech or Otis elevator tech gets $61k or more and spends his life in a metropolitan area with all it offers plus has a good chance of paying off a mortgage before he retirees.
I enjoyed my job as a tech and I love aviation but I can see why the military may be losing or has trouble recruiting techs.