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1 |
PURPOSE |
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1.1 |
The purpose of this directive is to advise you of the pay reporting requirements for various financial settlements that may be authorized under the new Executive Employment Transition (EET) policy.
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2 |
POLICY |
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2.1 |
The Executive Employment Transition policy is effective on September 1, 1992 and applies to all surplus situations involving Executives and certain other senior excluded employees from that date (EX 01 to EX 05), Excluded levels: DS 7A, DS 7B, DS 08, LA 2B, LA 3A, LA 3C, MD MOF 04, MD MOF 05 and MD MSP 03). The policy replaces the Work Force Adjustment directive which formerly applied to Executives.
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2.2 |
The deputy head is authorized to approve the composition of individual termination settlements and the amounts of the lump sum payments, within the limits prescribed by the policy.
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3 |
PROCEDURES/INSTRUCTIONS |
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3.1 |
The lump sum payments described below are to be requested through the Regional Pay System.
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Payment in Lieu of notice |
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A notice period or a lump sum payment in lieu of notice, equivalent to up to 52 weeks of salary. For additional details, see the EET policy administrative guidelines section 4.1.1.
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Entitlement code 108 (Retiring Allowance-Transferable) is to be used to requisition that portion of the benefit which is eligible to be transferred to an RRSP (registered retirement savings plan) or to a RPP (registered pension plan). This payment is subject to Unemployment Insurance deductions. Please note that this payment is also subject to Income Tax unless it is transferred to an RRSP or to a RPP.
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Entitlement code 051 (Retiring Allowance Non-Transferable) is to be used to requisition that portion of the benefit which exceeds the established limits and is not eligible to be transferred to an RRSP or to a RPP and will therefore, automatically be designated as non-eligible on the T-4A. This payment is subject to Income Tax and Unemployment Insurance deductions.
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Forgone Benefits |
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Up to 10% of salary, paid as a lump sum to offset the costs related to the purchase of private insurance, medical and dental coverage comparable to Public Service programs. For additional details, see the EET policy administrative guidelines section 4.1.2.
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As in case of the Payment in Lieu of Notice, entitlement codes 108 and 051 must also be used to requisition this lump sum payment.
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The particulars of entitlement codes 108 and 051 are contained in Services Pay Directive 1989-143(49) dated November 9, 1989.
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Compensation for Pension Reduction |
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Up to 30 % of salary to compensate for the actuarial pension reduction applicable to Executives who are at least age 50 and under age 55, and eligible to opt for an immediate annual allowance. For additional details, see the EET policy administrative guidelines section 4.1.3.
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Entitlement code 367 (Contracting Out Payment or Compensation for Pension Reduction Transferable) is to be used to requisition that portion of the benefit which is eligible to be transferred to an RRSP or to a RPP. This payment is subject to Unemployment Insurance deductions. Please note that this payment is also subject to income tax deductions unless it is transferred to an RRSP or to a RPP.
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Entitlement code 368 (Contracting Out Payment or Compensation for Pension Reduction Non-Transferable) is to be used to requisition that portion of the benefit which exceeds the established limits and is not eligible to be transferred to an RRSP or to a RPP and will therefore, automatically be designated as non-eligible on the T-4A. This payment is subject to Income Tax and Unemployment Insurance deductions.
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The particulars of entitlement codes 367 and 368 are contained in Services Pay Directive 1992-025(14) dated April 3, 1992.
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Alternative Lump Sum Payment |
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For the affected Executive who does not wish to benefit from any of the financial or non-financial elements stipulated in the policy, the deputy head may offer instead a lump sum payment of up to 15% of salary. For additional details, see the EET policy administrative guidelines section 4.3.
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Entitlement code 250 (Separation Benefit or Alternative Lump Sum Payment Transferable) is to be used to requisition that portion of the benefit which is eligible to be transferred to an RRSP or to a RPP. This payment is subject to Unemployment Insurance deductions. Please note that this payment is also subject to income tax unless it is transferred to an RRSP or to a RPP.
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Entitlement code 279 (Separation Benefit or Alternative Lump Sum Payment Non-Transferable) is to be used to requisition that portion of the benefit which exceeds the established limits and is not eligible to be transferred to an RRSP or to a RPP and will therefore, automatically be designated as non-eligible on the T-4A. This payment is subject to Income Tax and Unemployment Insurance deductions.
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The particulars of entitlement codes 250 and 279 are contained in Services Pay Directive 1989-143(49) dated November 9, 1992.
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3.2 |
For further information concerning the determination of the limits for the transfer of funds to an RRSP or to a RPP, refer to Services Pay Directive 1990-097(49) dated September 28, 1990.
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Bi-Weekly Lump Sum |
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3.3 |
When an Executive is appointed to a position outside the Executive Group with a lower salary range maximum, the following salary administration will apply:
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If the employee's current rate of pay is less than or equal to the job rate for the new position, then the appointment will be treated as a transfer and the employee will be assimilated within the range at the appropriate rate.
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If the employee's current rate of pay is above the job rate for the new position, the employee's salary will be frozen on appointment until it is matched or exceeded by the range maximum applicable to the level of the position (salary maintenance).
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In a salary maintenance situation, future salary increases will be made as bi-weekly lump sum payments equivalent to the percentage increase to the job rate of the employee's new level and applicable only for the duration of the period covered by the increase. Thus, if an increase is applied to the salary range applicable to the position, and the new range is to be effective for 15 months, the employee's bi-weekly salary cheque will reflect this increase as a supplementary amount which will cease to be paid on the date when the range ceases to be in effect. For additional details, see the EET policy administrative guidelines section 3.
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3.4 |
Entitlement code 230 (Lump Sum Equivalent) must be used to request the bi-weekly salary adjustment indicated above. The adjustment should be reported as a continuing bi-weekly entitlement (rate base 7). Care should also be taken to terminate the adjustment at the end of the increase period. Please note that a future end date is not allowable for a continuing entitlement and such date will reject if input.
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3.5 |
If leave without pay is reported for an employee (PAC 15) and an entitlement code 230 is present on the employee's master file, a PAC 18R transaction must be reported in order to reduce the entitlement for the period of the leave without pay. System changes have been requested to automate this process and we will advise you accordingly once it is operational.
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3.6 |
If the employee is hired on a part-time basis, it will be necessary to prorate the bi-weekly amount of entitlement code 230 to account for the employee's reduced assigned work week. System changes have been requested to automatically prorate the full bi-weekly entitlement based on the employee's assigned work week. We will advise you when this change is operational.
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3.7 |
The bi-weekly lump sum payments are to form part of the employee's basic rate of pay for all purposes except overtime and salary calculations on subsequent appointments. These lump sums are to be considered when computing termination benefits such as severance pay and the payment of unused vacation leave credits. Furthermore, the lump sums are to be treated as salary for the determination of contributions and benefits under the Public Service Superannuation Act.
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3.8 |
For further details concerning entitlement code 230, please refer to Services Pay Directive 1986-033(017) dated April 8, 1986.
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3.9 |
The attached chart represents the entitlement codes utilized to request the various payments authorized under the Workforce Adjustment directive and the Executive Employment Transition policy. The Personnel Pay Input Manual will be amended accordingly.
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4 |
INQUIRIES |
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4.1 |
Any queries on the foregoing may be addressed by telephone to the Compensation Advisory Group, Diane Leduc at (819) 956-2065 or Lorraine Cusson at (819) 956-2047.
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| CODES |
TITLE |
AUTHORITY |
DESCRIPTION |
| 051 |
Retiring Allowance Non-Transferable |
Section 7.2 of WFAD |
pay in lieu of unfulfilled surplus period |
| Section 4.1.1 of EETP |
payment in lieu of notice |
| Section 4.1.2. of EETP |
payment in lieu of forgone benefits |
| 108 |
Retiring Allowance Transferable |
Section 7.2 of WFAD |
pay in lieu of unfulfilled surplus period |
| Section 4.1.1 of EETP |
payment in lieu of notice |
| Section 4.1.2 of EETP |
payment in lieu of forgone benefits |
| 250 |
Separation Benefit or Alternative Lump Sum Payment Transferable |
Section 7.3 of WFAD |
separation benefit |
| Section 4.3 of EETP |
alternative settlement of up to 15% of base salary |
| 279 |
Separation Benefit or Alternative Lump Sum Payment Non-Transferable |
Section 7.3 of WFAD |
separation benefit |
| Section 4.3 of EETP |
alternative settlement of up to 15% of base salary |
| 363 |
Retention Payment Transferable |
Section 7.4 to 7.7
incl. of WFAD |
retention payment: total facility closure, relocation of work units and devolution or privatization |
| 364 |
Retention Payment Non-Transferable |
Section 7.4 to 7.7
incl. of WFAD |
retention payment: total facility closure, relocation of work units and devolution or privatization |
| 365 |
Turnkey Payment Transferable |
Section 7.8 of WFAD |
Turnkey payment in a devolution situation |
| 366 |
Turnkey Payment Non-Transferable |
Section 7.8 of WFAD |
Turnkey payment in a devolution situation |
| 367 |
Contracting Out Payment or |
Section 8 of WFAD |
special provisions regarding contracting out |
| Compensation for Pension Reduction Transferable |
Section 4.1.3 of EETP |
up to 30% of salary for pension reduction |
| 368 |
Contracting Out Payment or |
Section 8 of WFAD |
special provisions regarding contracting out
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| Compensation for Pension Reduction Non-Transferable |
Section 4.1.3 of EETP |
up to 30% of salary for pension reduction |
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