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1
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PURPOSE
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1.1
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The purpose of this directive is to provide information concerning enhancements
to the Regional Pay System (RPS) namely the payments of Termination
Entitlements and Deductions.
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1.2
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Phase 2 is the automation of final adjustments of Basic Pay and Allowances on
Temporarily Struck Off Strength (T-SOS) and Struck Off Strength (SOS)
accounts.
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2
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BACKGROUND
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2.1
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The enhancements to the RPS are part of a larger undertaking known as the
Compensation Productivity Initiative (CPI).
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3
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POLICY
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3.1
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Effective April 1,1997, changes to the RPS will be implemented to reflect the
enhanced processes and procedures described herein.
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3.2
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The changes addressed are:
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i) Creation of a supplementary payment without pay office intervention when
termination entitlement transactions are reported by
departments;
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ii) Ability by departments to collect termination deductions from termination
entitlement supplementary payment;
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iii) Automation of "Entitlement Commence" transactions reported on
inactive accounts (SOS);
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iv) Demands on Third Party -Statutory Set-offs;
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v) Cash receipts.
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3.3
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With the automation of Termination Entitlements departments are now responsible
for:
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i) Reporting amounts being transferred to an RRSP;
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ii) Forwarding the RRSP payment directly to the Financial
Institution;
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iii) Reporting applicable tax exemption amounts as per Taxation Waiver
letters;
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iv) Retaining all supporting documentation.
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3.4
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When an account is SOS, termination entitlement (e.g. Severance Pay)
transactions reported by departments will automatically create a supplementary
payment without pay office intervention. Communication between the pay office
and departments will be essential to ensure that outstanding termination
deductions (e.g. Superannuation deficiencies) or overpayments have been
collected.
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The reporting of termination entitlements will be the last opportunity for
departments to collect outstanding termination deductions or
overpayments.
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4
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PROCEDURES/INSTRUCTIONS
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4.1
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Three new on-line screens have been created for departmental use. The new
screens are: Termination Entitlements (TEC), Termination Deductions (TED) and
Cash Receipts (CRT). A Job Aid is attached to provide you with input
examples.
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4.2
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Termination Entitlements (TEC)
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A new "Termination Entitlements (TEC)" screen has been created for
departments to report termination entitlements, such as Separation Benefit. Pay
Action Code 71 on PWGSC-TPSGC 7340-1 will be used for batch
input.
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NOTE: If the SOS reason is "Death in Service", the termination
entitlements transactions will not process and a message will be produced
advising the pay office that the "Pay action must be handled
manually".
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Refer to Appendix A (attached) for a list of the termination entitlements that
have been automated and that are accepted on the TEC screen.
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Termination entitlements listed in Appendix A are no longer to be reported via
the "Entitlement Commence (ENC)" on-line screen or with a PAC 18C on
a DSS-MAS 2517T or 2549, for batch input. The RPS will reject these
transactions if they are reported using the above mentioned types of
input.
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Termination entitlements listed in Appendix B (attached) are to be reported via
the "Entitlement Commence (ENC)" on-line screen or with a PAC 18C on
a DSS-MAS 2517T or 2549, as is the current process.
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Departments are now responsible for reporting amounts transferred to an RRSP.
Deduction code 582 (Transfer to RRSP) should be used on the TEC screen to
transfer all or a portion of the termination entitlement to an RRSP. PAC 77 582
on a PWGSC-TPSGC 7340-1 should be used for batch input. The system will now
generate an RRSP payment entitlement code 120 from the RRSP deduction
amount.
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NOTE: Please refer to Compensation Directive 1995-27 which details the
specific documents required for transfers to an RRSP and Income Tax
Waivers.
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Two new codes have been created for use on the TEC screen. The amount reported
for these codes will provide a tax exemption at source. The new codes are:
"395 -Tax Exemption Supplementary (Federal)" and "396 - Tax
Exemption Supplementary (Quebec)". A PAC 71 395 or 396 on a PWGSC-TPSGC
7340-1 will be used for batch input for the termination entitlements listed in
Appendix A. A PAC 18C 395 or 396 will be used for batch input for termination
entitlements listed in Appendix B.
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4.3
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Payment to an RRSP
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An RRSP payment will be issued and identified on the payroll register as
entitlement code 120 with the employee's name and a notation "FOR DEPOSIT
TO RRSP ACCOUNT ONLY" and forwarded to the Department.
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Departments will be responsible for the distribution of the RRSP cheques to the
Financial Institution as specified by the employee. Departments must ensure
that the RRSP cheques are not released to the employee. If an account
has more than one Financial Institution or RRSP plan number to which payments
are to be transferred, departments will report a separate 582 transaction for
each payment.
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NOTE: Any portion payable in cash to the employee will be issued on a
separate cheque payable to the employee.
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The RRSP deduction code 582 will be the last deduction taken from the Retiring
Allowances payment. Therefore, outstanding deductions (e.g. deficiencies,
overpayments) to be collected from the supplementary payment may reduce the
expected amount that was to be transferred to an RRSP.
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4.4
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Cancellation of an RRSP Payment
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To cancel a payment that has been transferred to an RRSP, the department is now
required to input two transactions. Refer to Section PPIM 4-4-19 for complete
instructions.
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4.5
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Termination Deductions (TED)
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A new Termination Deductions (TED) screen has been created for departments to
report termination deductions such as Superannuation Deficiencies (code 581)
that will be collected from a Termination Entitlement. A PAC 77 on a
PWGSC-TPSGC 7340-1 will be used for batch input.
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Outstanding deficiencies that the pay office was unable to collect from final
salary will now be reported by departments using the TED screen. Refer to
Appendix C (attached) for a list of the termination deductions that are
accepted on the TED screen.
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The pay office is responsible for communicating to departments the amounts and
applicable codes to collect outstanding termination deductions.
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It is essential that departments receive this information prior to reporting
the termination entitlements.
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If the termination deductions are not or cannot be collected, departments are
to forward a memo to Superannuation Directorate outlining the amounts of the
outstanding deficiencies for Superannuation and Supplementary Death
Benefit.
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NOTE: If the total amount of the deductions, excluding code 582, exceeds
the termination entitlement payment, resulting in a negative entitlement, then
ail of the transactions will reject. The department must determine the
deductions to exclude (in priority order) to allow the payment to process and
then resubmit their transactions.
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4.6
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Cash Receipts (CRT)
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A new Cash Receipt (CRT) screen has been created to give departments the
facility to report the receipt of cash or personal cheque from the
employee.
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A PAC 20 on a DSS-MAS 2517T or 2549 will be used for batch input, as is the
current process.
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Departments are to retain on file the official receipt of monies received from
the employee to liquidate or reduce the overpayment.
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4.7
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Third Party Demand - Statutory Set-offs
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The Salary Recovery Sub-set (SRS) on-line screen has been expanded to include a
new "FED TAX ARREARS" field which allows to view the outstanding
amount for a Third Party Demand - Tax Arrears code 597.
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If an account has outstanding deficiencies relating to taxation arrears they
must be collected by the department.
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4.8
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Entitlement Commence on an Inactive Account (SOS)
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When creating a PAC 18C or using screen ENC on an SOS account departments are
no longer required to complete "retroactivity fields 67/68 (H/D/W IND /
# of H/D/W)", unless specified in Compensation Directive
1996-039.
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4.9
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Edits, Rejects and Warnings
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Any new rejects and warnings generated as a result of the initiative have been
included in PPIM Section 7-3-3-2.
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4.10
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All input instructions for these new processes are included in Personnel-Pay
Input Manual amendments number 48 (volumes 1,11,111) and number 41 (volumes IV,
V) which are dated February 1997.
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5
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INQUIRIES
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5.1
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Any request for information regarding the foregoing should be addressed to your
PWGSC Compensation Services Office.
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P. Charko
Director General
Compensation Sector
Government Operational Service
[Print Version]