Special regulations referred to earlier as the Divestiture Regulations should be enacted to provide “pension protection” to the federal pensionable service you have accrued under the Federal Public Service Superannuation Act (Federal PSSA) up to the date of transfer to the Yukon Health Authority. The foregoing measures will apply if you decide NOT to transfer your Federal PSSA pensionable service to the Yukon Health Authority Pension Plan under the anticipated Pension Transfer Agreement (PTA). Basically, under this arrangement, the pensionable service you accrue under the Yukon Health Authority Pension Plan will count for "threshold purposes only" towards your eligibility for pension options under the Federal PSSA.

The following hypothetical example illustrates this “pension protection” feature:

As of the date of transfer, a transferring Group 1 employee will be age 50 and have accrued 25 years of pensionable service under the Federal PSSA. This employee opts NOT to transfer his/her accrued pensionable service under the Federal PSSA to the Yukon Health Authority Pension Plan and decides to terminate his/her employment with the Yukon Health Authority at age 55.

Therefore, this particular employee, upon reaching age 5,5 will have 25 years of pensionable service with the Federal PSSA and 5 years of pensionable service with the Yukon Health Authority Pension Plan. For the "threshold" requirements of the

Federal PSSA, this employee will be entitled to an immediate annuity (i.e. unreduced pension) since he/she will be both age 55 and have 30 years of pensionable service (i.e. 25 years Federal PSSA plus 5 years Yukon Health Authority Pension Plan). However, the actual Federal PSSA pension benefit will only be based on the 25 years of pensionable service (i.e. 2% x 25 years X Highest Average Earnings). Had the special "pension protection" provisions not been in place for the Yukon Health Authority transition, the Federal PSSA benefit of this employee upon reaching age 55 would have been subject to a 25% (i.e. 30 years - 25 years X 5%) actuarial reduction.

The advantages of the "pension protection" provisions in this particular case are illustrated below:

With "pension protection" provisions

Age 55 and 30 years pensionable service (25 years under the Federal PSSA + 5 years under the Yukon Health Authority Pension Plan) = Pension benefit of 2% x 25 years Federal PSSA service x Highest Average Earnings

Without "pension protection" provisions

Age 55 and 25 years pensionable service = Pension benefit of 2% x 25 years of Federal PSSA service x Highest Average Earnings minus an actuarial reduction of 25% (30 years - 25 years X 5% per year).

It should also be noted that, in this particular example, the employee, subsequent to transfer to the Yukon Health Authority, would have also accrued 5 years of pensionable service under the Yukon Health Authority Pension Plan and would be eligible for an additional pension benefit based on the terms of the Yukon Health Authority Pension Plan.