SERVICES PAY DIRECTIVE: 1991-037(24)

SUBJECT:

Changes in the Leave Without Pay Regulations

1

PURPOSE

1.1

The purpose of this Directive is to advise personnel offices of changes to the Public Service Superannuation Regulations, regarding the recovery of Public Service Superannuation and Supplementary Death Benefit contributions for periods of Leave Without Pay. There are no changes to the recoveries required under the various Insurance Plans at this time.

2

POLICY

2.1

The Superannuation Regulations regarding recoveries of Superannuation and Supplementary Death Benefit contributions for periods of Leave Without Pay (LWOP) were amended effective May 22, 1991. The changes are described below:

3

PROCEDURES/INSTRUCTIONS

3.1

Effective from May 22, 1991, contributions for the first three consecutive months of any period of Leave Without Pay (LWOP) are required at a single rate.

If, on May 22, 1991, an employee was on a type of LWOP for which double contributions were required, and the employee had already completed three months of leave, there would be no change to the contributions required for the full period of the leave.

If the employee had not completed three months of LWOP on May 22, the balance of the three-month period will be at single rate.

Employees proceeding on LWOP on or after May 22 will pay a single rate of contributions for the first three consecutive months of any type of LWOP. See the example below:

Eg. LWOP for Relocation of Spouse:

LWOP started January 1, 1991 -- full period of leave at double rate.

LWOP started April 1, 1991 -- April 1 to May 21 -- double rate:
May 22 to June 30 -- single rate:
July 1 to end -- double rate:

LWOP started August, 1, 1991 -- Aug 1 to Oct 31 -- single rate:
Nov 1 to end -- double rate:

It should be noted that, normally, only the first three months of any period of LWOP are at single rate, regardless of whether there is a change to the type of leave, (other than the types of LWOP described in the attached Appendix). Where a period of "personal needs" leave of three months or less, as described in vii) of the Appendix follows another type of LWOP, the "personal needs" leave is at single rate.

3.2

The recovery period of Leave Without Pay has been extended to a period equal to twice the period of the leave, except in the situation described in Section 3.4.

Where an employee returns to duty on or after May 22, 1991, and contributions are not paid within 30 days of return to duty, the recovery of Superannuation deficiencies should be made over a period equal to twice the period of leave.

If an employee is now repaying deficiencies over a period equal to the period of leave, this schedule should be maintained unless the employee requests to take advantage of the longer repayment period. Where such a request is made, the repayment period is extended as described in the example below:

Example:

LWOP 01-01-1990 to 31-12-1990

Return to duty 01-01-1991

Recoveries commence 01-02-1991 to end 31-01-1992 (12 months)

Recoveries made 01-02-1991 to 30-06-1991 (5 months)

Balance of recovery period = 7 months to 31-01-1992

Request to change to twice the recovery period: July 1, 1991.

Recovery period extended to 31-08-1992, i.e., Twice the balance of the original payment period, for a total recovery period of 19 months.

Employees of course still have the option of paying deficiencies in a lump sum within thirty days of return to duty. If an employee wishes to pay his deficiencies in less than the maximum time period, that is also permitted.

Requests for an extension of the recovery period beyond twice the period of leave, in cases of financial hardship, must continue to be approved by the Advisory Services Group of the Superannuation Branch.

3.3

The attached Appendix describes the types of LWOP which now require a single rate of contributions. The changes from the previous Regulations are described below:

i) Leave without pay for the actual care and custody of a new born child which occurs up to 52 weeks after the birth or adoption of the child.

Note: A single rate of contributions is required for all types of parental leave that occur within this period, including care and nurturing leave. PSSA contributions for any period of this type of LWOP which occurs on or after May 22, 1991, but before the 52 weeks has expired, are required at the single rate.

Example:

Maternity LWOP: July 1, 1990 to January 19, 1991
Care and Nurturing Leave: January 20, 1991 to June 30, 1992
Date of birth of child: August 10, 1990

Superannuation contributions required:

01-07-1990 to 19-01-1991 single rate
20-01-1991 to 21-05-1991 double rate
22-05-1991 to 09-08-1991 single rate (52 weeks after birth)
10-08-1991 to 30-06-1992 double rate

ii) For the purpose of serving with any organization, including a government other than the government of Canada, (except a public service bargaining agent or a credit union), and the service with that organization is to the advantage of the department or is being performed at the request of the Government of Canada.

Where an employee is now on this type of leave, the period prior to May 22, 1991, will be charged at a double rate, while a single rate of contributions will be required for the period on or after May 22.

LWOP to serve with the United Nations:

PSSA contributions (for the period on or after May 22, 1991) are required at a single rate where the Deputy Head certifies that the service of an employee, on loan to the UN and paying into the UN Pension Plan, is to the advantage of the Department. The transfer of pension contributions from the UN Plan will be applied to the employee share of contributions only, and any balance of such a transfer will be paid to the employee.

3.4

Contributions must be paid to the Superannuation Directorate, at the contributor's option: annually in advance, quarterly in advance, or in a lump sum payment in advance where the contributor is on LWOP for the following reasons:

(a) on loan from the Government of Canada to the government of a country other than Canada,

(b) serving as a full time paid official of a public service bargaining agent,

(c) serving as a full time paid official of a credit union, or

(d) serving with an international organization and is not a contributor to the pension plan applicable to that organization.

Where the required contributions were not paid in advance, recovery of any deficiencies upon return to duty are to be made over a period equal to the period of the leave.

3.5

Salary for the purpose of calculating the contributions for LWOP is equal to the rate of salary that would have been authorized if the contributor had not been absent. When calculating the deficiencies for the period of LWOP, the salary increment should be included effective May 22, 1991, if under the terms of the Collective Bargaining Agreement, the increment is included for that type of leave.

Example:

LWOP for Illness 01-01-89 to 31-03-92
Salary at 01-01-89 $35,000.00

Increment due 01-07-89 to $36,000.00

Increment due 01-07-90 to $37,000.00

Contributions for LWOP would be calculated as follows:

01-01-89 to 21-05-91 contributions based on salary at $35,000.00
22-05-91 to 31-03-92 contributions based on salary at $37,000.00

Deficiencies from 01-01-89 to 21-05-91 would be calculated using the salaries at the increment level applicable when the LWOP commenced. Effective May 22, 1991, deficiencies should be based on the salary at the increment level that would have been paid had the employee not been on leave.

Use of the increment is effective from May 22, 1991.

3.6

For pension purposes, a period of absence from duty while on "off-pay" or "off-duty" status is treated as a period of Leave Without Pay.

This type of absence is treated as a period of LWOP for PSSA purposes where the employee is told not to report to duty because there is a temporary shortage of available work and the deputy head has certified that the absence is to be of a temporary nature with a return to duty expected. This situation can occur for various reasons, for example, where a strike by one bargaining group results in insufficient work being available for another group, or where employees are unable to work while awaiting repairs to equipment, etc. As for other types of LWOP, contributions for the first 3 months of such leave must be calculated at single rate. Strike or suspension does not fall into this category and remains non-pensionable.

3.7

Contributions owing at termination date:

There is no longer a requirement to collect interest on deficiencies of current contributions still owing when the pension benefit becomes payable. In the past, interest had been payable when the benefit entitlement was a Deferred Annuity. Shortages of past service election payments will however continue to be subject to the applicable default charges.

3.8

Supplementary Death Benefit:

Contributions for Supplementary Death Benefit (SDB) are always recovered at a single rate. The recovery period for deficiencies however has also been extended to a period equal to twice the period of Leave Without Pay as described in Section 3.2, (except in the situations described in 3.4).

In addition, the changes described in Section 3.5, regarding the use of the salary increment for LWOP are also applicable to SDB coverage and contributions.

4

INQUIRIES

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4.1

Any request for information regarding this Compensation Directive should be addressed to your Public Works and Government Services Canada (PWGSC) Compensation Services Office.