Cost Estimate for Bill C-261: An Act to amend the Canadian Forces Superannuation Act and the Royal Canadian Mounted Police Superannuation Act (increase of allowance for survivors and children)

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Bill_C-261

Summary
Upon the death of a contributing member of the Regular Canadian Forces (CF), certain members of the Reserve Forces, as well as members of the Royal Canadian Mounted Police (RCMP), who at the time of death were entitled to an annuity or an annual allowance, the survivor and children of these contributing members are eligible for an immediate annual allowance.

The purpose of this enactment is to increase the allowance given to the survivors and children of CF or RCMP contributors from 50% to 70% of the contributor’s annuity or allowance.

The changes proposed by Bill C-261 will results in an incremental increased pension liability of $5.046 billion for the regular CF pension plan, $7 million for the Reserves CF pension plan, and $1.32 billion for the RCMP pension plan. The annual servicing costs will increase by $112.55 million for the regular CF pension plan, $910,000 for the reserves CF pension plan, and $39 million for the RCMP pension plan.

Incremental Cost of Raising the survivor benefit to 70%

Increase in Actuarial Liability at 2015-03-31 ($Million)

CF Regular

CF Reserve

RCMP

Active Members

1,447.0

5.70

540.0

Pensioners

2,342.0

1.10

536

Current widows(ers)

1,257.0

0.20

244

Total

5,046.0

7.00

1,320.00

Increase in annual Current Service Cost at 2015-03-31 ($ millions)

CF Regular

CF Reserve

RCMP

Government

112.55

0.91

39.00

Members

0.00

0.00

0.00

Total

112.55

0.91

39.00