1
|
PURPOSE
|
1.1
|
The purpose of this directive is to remind client departments and agencies of
the impact that a retroactive salary revision under a new collective agreement
will have on benefits payable under the Disability Insurance (DI) and Long-term
Disability (LTD) Insurance Plans.
|
2
|
BACKGROUND
|
2.1
|
For DI and LTD premium calculation purposes, a retroactive salary increase is
effective the first of the month following the authorization date, i.e. the
signing date of the collective agreement.
|
2.2
|
The new collective agreement for the CS group (BUD code 303) was signed on
December 2, 1997, with a retroactive salary revision effective May 1, 1997.
Therefore, adjusted DI and LTD premiums are required effective January 1,
1998.
|
2.3
|
Before March 1, 1993, DI and LTD benefits were not adjusted to reflect
retroactive salary increases if the authorization date of the salary increase
was after the end of the elimination period (even if the salary rate was
retroactive to a date prior to the date on which benefits became
payable).
|
3
|
POLICY
|
3.1
|
Where an employee becomes entitled to DI or LTD benefits on or after March
1, 1993, retroactive salary increases will be applied provided the
effective date of the increase is prior to the date benefits
commence.
|
|
Example:
|
|
An LTD member is disabled on September 1, 1997, and becomes entitled to LTD
benefits on December 1, 1997, after a 13-week elimination period. A collective
agreement is signed March 10, 1998, with a retroactive salary increase
effective June 21, 1997. Therefore, his LTD benefits will be recalculated to
reflect this salary change.
|
3.2
|
If an employee became entitled to DI or LTD benefits before March 1,
1993, retroactive salary increases will not affect their
benefits.
|
3.3
|
If a DI or LTD recipient is in receipt of PSSA benefits, the PSSA benefit may
also increase to reflect a salary increase. If so, then there will be a
corresponding increase in the offset from the DI or LTD
benefits.
|
4
|
PROCEDURES
|
4.1
|
Compensation Specialists should notify the Superannuation Directorate in any
instance where an individual receiving disability benefits becomes entitled to
a retroactive salary increase which has an effective date prior to the
individual's date of entitlement to DI or LTD benefits.
|
4.2
|
Where an individual claimant notifies the Insurer regarding a retroactive
salary increase, Sun Life or National Life will verify the increase with the
Superannuation Directorate.
|
4.3
|
In cases where a salary revision could affect the level of DI or LTD benefits,
the Compensation Specialist should notify the Insurer of the following
details:
|
|
|
|
|
|
- the date the change in salary was authorized;
|
|
- the effective date of the change in salary.
|
5
|
INQUIRIES
|
5.1
|
Any request for information regarding the foregoing should be addressed to your
Public Works and Government Services Canada Compensation Services
Office.
|
P. Charko
Director General
Compensation Sector
Government Operational Service