The Canadian Armed Forces (CAF) Regular Force pension is a defined-benefit plan set out in the Canadian Forces Superannuation Act. Before age 65, it pays 2% of average pay for each year of pensionable service, counting up to 35 years; at 65 a bridge benefit stops and the pension drops, because the plan is integrated with the Canada Pension Plan. Pensions are indexed each year to the Consumer Price Index. The plan also reduces RRSP contribution room through the pension adjustment, which shapes how members use their RRSP and TFSA.
Deployment, postings and allowances add their own rules: some members deployed on international operations can deduct their pay from taxable income, the Post Living Differential has been replaced by the Canadian Forces Housing Differential, and relocation benefits come under the Canadian Armed Forces Relocation Directive. This page is one of the guides for specific groups in life stages and life events; public-sector healthcare workers have a similar defined-benefit picture, covered in finances for healthcare workers, and members who retire outside Canada can use the guide for retirees living abroad.
How the Regular Force pension works
The figures below are for members of the Regular Force Pension Plan who enrolled on or after March 1, 2007, from the CAF pension centre’s release page. Members who enrolled earlier have some different rules.
| Feature | Rule |
|---|---|
| Type | Defined benefit, set by the Canadian Forces Superannuation Act |
| Average pay used | Average annual pay over a 5-year period of pensionable service chosen by or for the member |
| Service counted | Up to 35 years |
| Lifetime pension | 1.375% × service × average earnings up to the average maximum pensionable earnings (AMPE), plus 2% × service × average earnings above the AMPE |
| Bridge benefit | 0.625% × service × the AMPE or average earnings, whichever is lower, paid until age 65 |
| Indexing | Annual increases based on the Consumer Price Index (CAF pension centre) |
Worked example
A member releases with 25 years of service and average earnings of $80,000. The AMPE depends on the year of release; this example assumes $72,000.
| Part | Calculation | Per year |
|---|---|---|
| Lifetime pension on earnings up to the AMPE | 1.375% × 25 × $72,000 | $24,750 |
| Lifetime pension on earnings above the AMPE | 2% × 25 × $8,000 | $4,000 |
| Bridge benefit (until 65) | 0.625% × 25 × $72,000 | $11,250 |
| Total before 65 | $40,000 | |
| Total from 65 (lifetime pension only) | $28,750 |
Both amounts are before indexing. From 65 the member would also normally be receiving CPP and OAS.
When the pension can start
| Situation at release | Pension |
|---|---|
| 25 years of CF service, any age | Immediate, unreduced |
| Age 60 or older with at least 2 years of pensionable service | Immediate, unreduced |
| Age 50 or older with at least 2 years, not entitled to an unreduced pension | Immediate but reduced, by up to 5% for each year under age 60 (a smaller reduction can apply with 25 or more years of pensionable service) |
| Under age 50 with at least 2 years | Deferred pension payable at 60 (or reduced from 50), or a transfer value to a locked-in RRSP, LIRA, insurer or new employer’s plan |
| Fewer than 2 years of pensionable service | Refund of contributions plus interest |
Other cases (age 55 with 30 years of pensionable service, disability, involuntary release in a force reduction) have their own rules on the release page. The transfer value is only offered to members under 50 at release, and the choice is time-sensitive.
Allowances and housing
The CAF pays many allowances under Chapter 205 of the Compensation and Benefits Instructions, including environmental allowances (aircrew, sea duty, paratroop, diving and others). The Hardship Allowance is set separately, in CBI 10.3.05 of the military foreign service instructions.
- Housing: the Post Living Differential (PLD) was repealed effective July 1, 2023 and replaced by the Canadian Forces Housing Differential (CFHD), which helps members adjust to housing costs at their place of duty. CFHD amounts depend on the location and the member’s pay level and are updated every year. A Provisional Post Living Differential phases down the old PLD rates for members who were receiving them.
- Postings: relocation benefits come under the Canadian Armed Forces Relocation Directive (CAFRD), set up by CBI 208. A member posted at public expense who sells a principal residence within 2 years of the change of strength date is reimbursed for real estate fees and legal or notarial fees on the sale.
The unit orderly room or pay office can explain a specific entitlement and its tax treatment.
Tax on international deployments
Members of the CAF (and Canadian police) deployed outside Canada on an international operational mission may be able to claim a deduction on line 24400 of their return; the amount is shown in box 43 of the T4 slip (CRA). National Defence notes that the tax-exempt amount is capped at a monthly amount equal to the highest level of pay for a Lieutenant-Colonel (General Service Officers).
RRSP and TFSA planning
The CAF pension centre explains that a member’s annual RRSP contribution limit is reduced by the estimated value of the pension earned in the previous year, the pension adjustment (PA). Members of a defined-benefit plan therefore usually have less RRSP room than people without a workplace pension at the same income. TFSA room doesn’t depend on income or pension accrual, so it isn’t reduced by the PA. Pension contributions are deducted from taxable pay as they are made.
| Account | How the CAF pension affects it |
|---|---|
| RRSP | Room reduced by the pension adjustment each year |
| Spousal RRSP | Uses the contributor’s own RRSP room |
| TFSA | Not affected by the pension |
The TFSA vs RRSP guide compares the two accounts.
Insurance and benefits
Supplementary Death Benefit
The Supplementary Death Benefit (SDB) is decreasing term life insurance for Regular Force members and Reserve members on Class “C” service.
| Feature | Rule |
|---|---|
| Benefit while serving | 2 times annual pay |
| Cost | $1 for every $10,000 of coverage |
| After release | Coverage continues for members who release with an immediate pension and at least 5 years of Regular Force or Class “C” service; it starts to reduce by 10% of the original amount each year after age 61 |
| From age 70 | Paid-up coverage of $5,000 for life (for those who released with an immediate pension) |
Other coverage
SISIP Financial handles the CAF long-term disability plan (CAF LTD), according to National Defence. Veterans Affairs Canada pays disability benefits and income support to eligible veterans after release; its website lists each benefit’s eligibility and tax treatment.
Reserve Force
Reservists on part-time service are generally in the Reserve Force Pension Plan, which uses a career-earnings formula rather than the Regular Force formula: per the release page, 1.5% of total pensionable earnings (updated for wage growth) as a lifetime pension, plus a bridge benefit to age 65. Reservists who qualify for the Regular Force plan, such as some on Class “C” service, follow its rules instead.
Related Resources
Sources
The figures and rules on this page come from these sources, last checked against them on October 4, 2026. How we check facts.
- Canada Revenue Agency: Line 24400 – Canadian Armed Forces personnel and police deduction
- Government of Canada: Release (Active member): Regular Force enrolled on or after March 1, 2007
- Government of Canada: Bridge benefit: Active member plan information
- Government of Canada: Indexing: Retired member plan information
- Government of Canada: Chapter 205 – Allowances for Officers and Non-Commissioned Members
- Government of Canada: Canadian Forces Housing Differential
- Government of Canada: Chapter 208 – Relocation benefits
- Government of Canada: Improvements to compensation and benefits for the Canadian Armed Forces
- Government of Canada: New members: Regular Force enrolled on or after March 1, 2007
- Government of Canada: Supplementary death benefit: Active member plan information
- Justice Laws (Canada): Canadian Forces Superannuation Act