Military Veterans
Against CFSA
Benefit Reduction at age 65

The objective:


The purpose of this initiative is to seek the support of member’s of Parliament to terminate the CFSA Benefit Reduction formula that is being applied to our Military Annuity when they attain age 65. The Government of Canada must right a wrong and amend the CFSA Act of a miscalculation in justice to our Disabled and Retired Veterans. The contributions and benefits must be stacked rather then merged!

Campaign Presentation:

Back Ground:

The Canada Pension Plan (CPP) was enacted in 1965 and came into force on January 1, 1966. Its intention was to provide another source for an “Income security” program supplementing old age security. Veterans maintain that we have been unfairly treated, in that Senior Military Officers did not hold Assistant Deputy Minister (ADM) appointments at the time, therefore we had no representation on the decision making process. Most Public Service Unions did not go along with the Government plan to integrate rather than stack our Annuity plans.

This situation is the net result of the Government decision, in 1965, to unilaterally impose an integrated rather than a “Stacked” method of contributions. This misguided policy also affects our Disabled Veterans. Their CFSA Annuity is reduced “Immediately” upon receiving their CPP disability benefits. In light of their personal sacrifices, our disable Veterans deserve much better treatment.

CPP Facts:

With regards to the CPP, the employee and the employer each paid half of the required contribution. In 1966, the Government levied rate of contribution for Military personnel was 1.8% of Annuity earnings. Over the years the rates substantially increased to 4.95%. Military personnel have always made the required maximum contributions to the plan. During the course of our career elevated amounts continued.

Recently the President and CEO of the Canada pension plan Investment Board advised that the CPP fund is fiscally healthy. Today the CPP plan has a reserve fund of over $98 Billion dollars and is expected to grow to $250 Billion in the next decade.

CFSA Facts:

On January 1, 1966 the employee’s contribution rate was reduced from 9.3% to 7.5%. Hence, a “so called” reduced Annuity contribution to our CFSA has accumulated a surplus of over 16.5 Billion dollars. Recently the Government of Canada released their annual reports of the Canadian Forces Superannuation 2003-2005. Note that the depletion of our retirement Annuity funds continues. In the 2003-2004 report, it is noted that $630 million was retired from the CFSA surplus Annuity account. In 2004-2005, no funds were “withdrawn” from the account and there was a surplus of $1,099,013,000 recorded that year. It clearly indicates that our contributions to the CFSA account continue to be too high.

The Crux of the issue:

The crux of the issue is that, in 1965, the Government of the day created a gross injustice, deliberate or otherwise, by merging our contributions rather than stacking them. We were dealt with, in a negligent fashion. Today’s Government must terminate the misguided policy. Mounting, Billions of dollars are available. This simple transaction would benefit disabled and retired Veterans, be a boost to the economy and the Government would receive 60% of it back in the form of taxes.

Old Age security facts:

The Old Age Security plan is a separate plan that should not be confused with the Military Annuity or the CPP benefits. Contributions are not made to the Old Age Security plan. It is simply absorbed into your income tax rates. Be advised, that the Canada General income tax guide for 2006 states: “You may have to repay all or part of your OAS pension if your net income is “More” than $62,144”. In the next ten years retirees at age 65 may be receiving more than one income (CFSA, RRSP, CPP, OAS) therefore they may be subject to repay all or part of the OAS benefits.

Different Government Provider:

Military personnel are a distinct Government provider who encounters a variant number of issues on a regular basis!

-         Loss of Spousal income, therefore loss of CPP income;

-         Loss of member’s second income opportunity, loss of overtime revenues;

-         Loss of ability to purchase a home and be mortgage free during a career;

-         Not being available for birthdays and special family events;

-         Military personnel often face, dangerous conditions, health hazards, and, extended family separation, with elevated levels of stress; and

-         Canadian Forces personnel are prepared to give the ultimate sacrifice to our Country Canada.

Other reasons why Veterans believe that the CFSA benefit reduction policy is unfair and must be terminated:

-         Members of Parliament are exempted from the Annuity benefit reduction formula when they attain age 65;

-         Members of Parliament can receive an Annuity upon completing 6 years of service, after 12 years his/her severance pay can escalate up to $500,000;

-         Upon death, widows of Member’s of Parliament receive 60% of the member’s indexed Annuity. Military widows receive less than 50% of the member’s reduced indexed Annuity;

-         At age 75, Public servants are awarded a $10,000 paid up Supplementary Death benefit protection policy. Military personnel benefits are reduced at age 61 by 10% annually until age 70, with a paid up policy of only $5,000;

-         The claw back to the Military Pensioners Annuity at age 65 creates a loss to their CFSA indexing benefit income. The Government of Canada also reduces immediately the Disabled Veterans Canadian Forces Annuity when they receive the CPP disability benefit;

-         It is absolutely ludicrous for members to make separate maximum contributions to three (3) different plans (CFSA, CPP, EI,) and later on in life receive the financial equivalent of one plan; and

-         Canadian Forces Personnel have the ultimate liability Member’s of Parliament and Government have the ultimate responsibility for the welfare of our Veterans.

Former Senior Leaders endorse the Campaign:

We have received very positive comments of support from our retired very Senior Officers, they included: Major-General (ret’d) Lewis MacKenzie: Colonel (ret’d) Don Ethell; Commodore (ret’d) David Cogdon: RCMP Deputy Commissioner (ret’d) Larry R. Proke: Mr Bill Gidley, Excecutive Director, RCMP Veterans; Chief Warrant Officer (ret’d) John Marr; and Chief Petty Officer First Class (ret’d) Joe Fillion.


A great number of Senior Officers have clearly supported the initiative that Veterans and Military personnel have been misguided and that the situation needs to be rectified. This worthwhile initiative continues to grow over 84,000 supporters have pronounced their support. Approximately 450,000 members of the Royal Canadian Legion, The Army Navy and Air Force Veterans (ANAVETS) of Canada (20,000 members), and The Air Force Association in Canada (12,000) adopted resolutions at their Annual General meeting in 2006 in full support of our initiative. Numerous other Military Associations have declared their support of the Objective. We have also received the support from Veterans living in 18 Countries. A simple “ White paper” request is required from The Prime Minister of Canada to The Minister of Veterans Affairs Canada (VAC) for the needed action and amendment to the “Pension Act” and its policies.

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

In order to succeed Veterans will need to stand shoulder to shoulder in great numbers and we shall!

This injustice levelled at our Veterans some day will affect members of your family. Someone will volunteer to serve our Country in the Military! It should be a concern of all Canadians!

It has been an Honour and Privilege to serve Canada “Our Country”, and we continue to serve today!

Veterans want their Golden Years Financial Dignity restored!

If you can’t stand behind our troops,

Just try standing in front of them!


John Labelle

Roger Boutin

John Labelle

27 Dresden Court

Lower Sackville

Nova Scotia

B4C 3X1


Revised: March 18, 2007

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This page was last updated: November 6, 2007