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1 |
PURPOSE
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1.1 |
The purpose of this Compensation Directive is
to provide you with information regarding the implementation of the Public
Service Pension Fund (PSPF) and the various changes required to accommodate
the new pension fund under the Public Service Superannuation Act
(PSSA). System enhancements are also identified as part of this directive.
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This Directive should be read in conjunction
with Superannuation
Administration Manual (SAM) Special Bulletin 1999-05 dated
April 20, 1999.
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1.2 |
In this text, use of the masculine is generic
and applies to both men and women.
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2 |
BACKGROUND
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2.1 |
Bill C-78 provides for the creation of a new
pension fund whereby plan contributions will be invested in the financial
markets.
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As a result, contributions and benefits must
be identified as Public Service Superannuation (PSS) Account or PSPF separately,
accurately and in greater detail.
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Bill C-78 does not apply to members of the following
pension plans: Lieutenant-Governors Superannuation Act, Diplomatic Service
(Special) Superannuation Act, Teachers Superannuation Act, Judges
Act or Tax Review Board Act and Members of Parliament Retirement
Allowances Act.
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3 |
POLICY
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3.1 |
In order to facilitate the implementation, current
contributions to the PSS Account will cease and will be credited to the
PSPF effective March 30, 2000, for Current accounts (7C) and Arrears paid
accounts (7A or 7B) and effective April 1, 2000, for Monthly paid accounts
(6C). Theses dates will be referred to as the "effective date" hereunder.
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PSS Account may be referenced as Fund 1 or PSSA
1. PSPF may be referenced as Fund 2 or PSSA 2.
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Employees with 35 years of service will continue
to contribute at a rate of 1%. Contributions required prior to the effective
date will be remitted to the PSS Account. Contributions required on or after
the effective date will be remitted to PSPF.
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Employees in Operational Service will continue
to pay the additional premiums required for Operational Service (i.e. 1.25%
for Correctional Service Canada [CSC] and 2% for Air Traffic Controllers
[ATC]).
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Contributions for Leave Without Pay (LWOP) deficiencies
where the LWOP occurred prior to the effective date will be paid into the
PSS Account. Deficiencies for LWOP where the LWOP occurred after the effective
date will be credited to the PSPF.
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Contributions for past service elections, reciprocal
transfer agreements (RTAs), pension transfer agreements (PTAs) or pension
surrenders, where the election, transfer or surrender was made prior to
April 1, 2000, will be credited to the PSS Account. Contributions for past
service elections, RTAs, PTAs or pension surrenders, where the election,
transfer or surrender was made on or after April 1, 2000, will be credited
to the PSPF.
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Elections made on or after April 1, 2000, (PSPF)
must also be broken down to display elections at the single rate and elections
at the double rate. New deductions codes have been created for this purpose
and are displayed in Appendix A of this directive.
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Where an individual elected not to count his
LWOP, and later signs an election to count the leave period which is dated
on or after April 1, 2000, the service will be credited to PSPF.
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Contributions, including retroactive contribution
recovery and/or adjustments in respect of PSS Account service will be credited
to that account.
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Benefits accrued prior to the effective date
will be charged to the PSS Account. Benefits accrued on or after the effective
date will be charged to the PSPF. Retirement Compensation Arrangements (RCA)
benefits will continue to be charged to the RCA Account.
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All benefit entitlements such as: Returns of
Contributions (ROCs); Pension Payments; Transfer Values (TVs); Pension Benefit
Division Payments and Survivor Benefits must be clearly identified for accounting
purposes as relating to PSS Account or PSPF. Although PSSA 1 and PSPF Funds
are identified separately, one blended payment will be issued to the recipient.
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The Canada Pension Plan/Quebec Pension Plan
(CPP/QPP) reduction has to be apportioned between the two funds based on
the CPP/QPP service attributable to each.
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Where an employee has part-time service, part-time
benefits, will require a separate "adjusted average" for the PSS Account
and the PSPF.
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4 |
PROCEDURES/INSTRUCTIONS |
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Instructions are provided in the subsections
outlined below.
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4.1 |
PAY SYSTEMS |
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4.1.1 |
THE REGIONAL PAY SYSTEM (RPS) AND ON-LINE
INPUT |
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The RPS screens have been modified to reflect
the PSSA 1 and PSSA 2 Funds. New codes have been created for LWOP deficiencies
and elections. All PSSA 1 and PSSA 2 codes are outlined in Appendix
A.
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Payments and recoveries of superannuable entitlements
such as bilingual bonus, acting pay, etc. (refer to SAM
2.8.5) which overlap PSSA 1 and PSSA 2 periods must be
split so that contributions can be credited to the appropriate
Fund.
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As of March 27, 2000, two separate transactions
will be required for all transactions when the period of retroactivity overlaps
the effective date (7A/B/C is March 30, 2000, and 6C is April 1, 2000).
The first is a closed "PSSA 1 period" with an effective "to date" which
corresponds to the end date of the pay period prior to the date of the changeover;
the second is a separate entry for the PSSA 2 period starting on the effective
date. The edits in the on-line system will not allow the input of overlapping
periods.
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When reporting a promotion with an effective
date prior to CIF for all 7A, part-time or irregular shift accounts where
the Pension Type code equals 01, 02, 03, 04, 10, 13 or 18, the number of
hours/days/weeks indicator must be left blank. If the hours/days/weeks
indicator is completed, the transaction will reject with message "PD130
H/D/W MUST BE BLANK FOR THIS EMPLOYEE TYPE".
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The PAC 06 will update the employee's master
employee record and the Pay Office will issue supplementary payments in
accordance with the Fund 1/Fund 2 breakdown.
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When reporting a PAC 05 for a full time employee
(Employee Types: A, B, C, D, M, K, P, L, R or X) and the "former rate/amount"
is different from the new "rate amount" (ex: a lateral transfer) and where
the "effective from date" is prior to CIF for the new Fund, then the effective
"to date" must be present and equal to the last day of the pay period prior
to CIF. A separate PAC 05 is required to report the period effective from
the CIF date (open ended).
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Pay actions which do not require an end date,
such as Temporarily struck-off strength (T-SOS), revert to basic pay, do
not require a split as the RPS will automatically credit the contributions
to either PSSA 1 or PSSA 2.
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Ongoing entitlements and recoveries already
in effect do not need to be adjusted. The RPS will automatically credit
the ongoing entitlements, recoveries or adjustments to PSSA 2 on the effective
date of the pay period of the changeover.
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When reporting a superannuable entitlement which
overlap PSSA 1 and PSSA 2 and to which the 10-day eligibility rule applies,
payment must be provided for the full month, if the employee works 10 days
in that month. However, for contribution purposes, the Compensation Advisor
must report the entitlement with an end date of March 29, 2000. Since these
entitlements are only effective the first of a month, the Compensation Advisor
must issue a supplementary payment for March 30 to 31, 2000, and recommence
the entitlement effective April 1, 2000. The Compensation Advisor must then
advise the Pay Office by Fax to update the Salary/Service History for the
period from March 30 to 31, 2000, (see Example 3).
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EXAMPLES |
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Example 1: Reporting of a superannuable entitlement
with no retroactivity
Acting Pay effective March 30, 2000, reported in Pay Period 08 (7C)
18C002 30 03 00 1 (open end date) PSSA 2
Acting Pay effective April 1, 2000 reported in Pay Period 04 (6C)
18C002 01 04 00 1 (open end date) PSSA 2
No split is required as the transaction is reported in the Pay Period during
which the changeover to PSSA 2 occurs, and the effective from date is equal
to the Pay Period start date.
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Example 2: Reporting of a superannuable entitlement
with retroactivity overlapping the date of the changeover
Acting Pay reported in Pay Period 09 (7C)
18C002 17 02 00 1 to 29 03 00 2 -- 30 days (PSSA 1 final Pay Period)
18C002 30 03 00 1 to 12 04 00 2 --10 days (PSSA 2 - Pay Period 08 in which
changeover occurs)
Acting Pay reported in Pay Period 04 (6C)
18C002 17 02 00 1 to 31 03 00 2 -- 32 days (PSSA 1 final Pay Period)
18C002 01 04 00 1 to 14 04 00 2 -- 10 days (PSSA 2 - PP04 in which the changeover
occurs)
As the transaction reported overlaps the date of the changeover from PSSA
1 to PSSA 2, the transactions must be split so that the pension contributions
can be credited to the correct Fund.
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Example 3: Reporting of a superannuable entitlement
overlapping the date of the changeover which can only commence on the First
of the month
18C141 01 03 00 1 to 29 03 00 2 -- 21 days (PSSA 1 final pay period)
71C141 30 03 00 1 to 31 03 00 2 -- 2 days (PSSA 2 - EAJ)
18C141 01 04 00 1 (open ended) (PSSA 2)
Although the transaction end date is March 29, 2000, the 10-day eligibility
rule applies and payment must be made for the full month. The adjustment
will be made by the Compensation Advisor by using the EAJ screen for the
missing two days (March 30 and March 31, 2000). Following notification from
the Compensation Advisor by Fax, the Pay Office will manually update the
Salary/Service with the entitlement for the period from March 30, 2000,
to March 31, 2000.
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Example 4: Reporting a recovery of a superannuable
entitlement
18S144 effective 16 03 00 1 reported in Pay Period 09 (7C)
18R144 16 03 00 1 to 29 03 00 2 -- Rate base "0" amount $38.10 (PSSA 1)
18R144 30 03 00 1 to 12 04 00 2 -- Rate base "0" amount $38.10 (PSSA 2)
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When the recovery period overlaps the changeover
date, the amount of the recovery that is credited to the PSSA 1 must be
calculated and reported separately. A separate transaction is required for
the period after the changeover.
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Example 5: Reporting of periods of LWOP
15C301 28 03 00 1 to 29 03 00 2 -- 2 days reason "A"
15C301 30 03 00 1 to 31 03 00 2 -- 2 days reason "A"
LWOP which is not pensionable such as Strike (M) must also be reported separately
as it reduces superannuable earnings in the period for which it is being
reported.
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It is recognized that the requirement to separate
transactions will temporarily increase the workload for the first few pay
periods. However, over time, the requirement to separate transactions will
diminish as the period of retroactivity will form part of the PSPF in the
majority of cases.
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4.1.2 |
RE-TOS CALCULATING SYSTEM |
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Version 2.3.1 of the RE-TOS Calculating System
must be used in order to calculate LWOP deficiencies. The deficiencies will
automatically be calculated and attributed to PSSA 1 or PSSA 2 based on
the period of the LWOP. RE-TOS will also provide the deduction codes required
for PSSA 1 periods and the new deduction codes required for PSSA 2 periods
(Appendix A).
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Example: 7C Account
Period of single rate LWOP: from February 1, 2000, to April 30, 2000
Period of double rate LWOP: from May 1, 2000, to May 31, 2001
Deficiencies:
01 02 00 1 to 29 03 00 2 -- Single Rate low (PSSA 1 - deduction code 581)
30 03 00 1 to 30 04 00 2 -- Single Rate low (PSSA 2 - deduction code 760)
01 05 00 1 to 31 05 01 2 -- Double Rate high (PSSA 2 - deduction code 763)
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LWOP deficiencies, paid while the employee is
still on leave, must be clearly identified as PSSA 1 or PSSA 2 when remitted
to the Superannuation Directorate.
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The PWGSC-TPSGC 2480 "Election Not to Count
Leave Without Pay as Pensionable Service" must reflect deficiencies paid
credited to each Fund. The amended form will be available shortly and you
will be notified via Forms Advice when they are ready. Until the amended
forms are available, the Pay Office will be required to note deficiencies
separately.
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The PWGSC-TPSGC 2481 "Statement of Option -
Leave Without Pay" will remain unchanged.
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It will not be necessary for the employee to
complete separate forms for PSSA 1 and PSSA 2.
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4.1.3 |
LIFE TO DATE CONTRIBUTIONS |
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The "TO-DATE" displayed on the "Superannuation
Sub-Set Screen (SSS)" field will only include PSSA 1 contributions.
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Effective April 1, 2000, the total contributions
"To date" will be managed by the Contributor System on a daily basis. This
information will be displayed in the Contributor Inquiry Section.
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4.2 |
PENSION SYSTEMS |
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4.2.1 |
CONTRIBUTOR INQUIRY SYSTEM |
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The Contributor Inquiry has been amended to
reflect Fund 1 and Fund 2 information. The Summary screens will provide
the total benefit credited under both Funds. Separate Screens have been
created to display the breakdown between Fund 1 and Fund 2.
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The following screens have been created or revised:
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Screen |
Acronym |
Status |
Comments
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Contributions Summary |
CON |
Revised |
Contains all Fund 1, Fund 2, RCA 1, RCA
2 and interest applicable to each Fund.
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PSSA Contributions |
CNP |
New |
Provides details of Fund 1 and Fund 2
contributions as well as interest. Linked to the Contributions Summary
screen.
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RCA Contributions |
CNR |
New |
Provides Fund 1 and Fund 2, RCA contributions,
if applicable, and interest. Linked to the Contributions Summary screen.
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SOS Summary |
SOS |
Revised |
Displays all SOS records. Highlighted
SOS records will display payment details.
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SOS Details |
SOD |
New |
When selected, displays the lump sum detail
for Fund 1, Fund 2, RCA 1, RCA 2 and interest attributed to each.
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EXAMPLE
The Contributions Summary Screen will display the Contributions information
as follows:
CONTRIBUTIONS |
INTEREST TO-DATE
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PSSA Fund 2: $ XXXX.XX |
$XXX.XX
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PSSA Fund 1: $ XXXX.XX |
$XXX.XX
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RCA Fund 2: $ XXXX.XX |
$XXX.XX
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RCA Fund 1: $ XXXX.XX |
$XXX.XX
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GRAND TOTAL:
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4.2.1.1 |
ENHANCEMENTS |
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The Entitlement Summary Screen (SUM) will now
display the Adjusted PSSA Average, the Adjusted RCA Average and the Adjusted
CPP/QPP Average salaries for part-time employees. This screen will only
display information when a SUBMIT for benefit has been processed.
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The Element Help (F4) function key will provide
guidance to the users on the completion of the new and revised screens.
The Page Help (F3) function key will not provide any details after April
1, 2000.
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4.2.2 |
PENSION SUPPORT SYSTEM (PSS) |
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The PSS will automatically calculate Fund 1
and Fund 2 benefit information. The Summary screens will provide the total
benefit credited under both Funds. Separate screens have been created to
display the breakdown between Fund 1 and Fund 2.
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The following screens have been created or revised:
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Screen |
Acronym |
Status |
Comments
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Pension Calculation Summary |
CAL |
Revised |
Displays total benefits accrued under
Fund 1 and Fund 2.
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Pension Calculation Fund 1 |
CL1 |
New |
Displays Fund 1 information.
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Pension Calculation Fund 2 |
CL2 |
New |
Displays Fund 2 information.
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Transfer Value Calc Summary |
TVC |
revised |
Displays Fund 1 and Fund 2 combined values.
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Transfer Value Calc Fund 1 |
TC1 |
New |
Displays Fund 1 value.
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Transfer Value Calc Fund 2 |
TC2 |
New |
Displays Fund 2 value.
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It is important to note that elections that
are in progress (deductions commenced but not yet finalized by the Superannuation
Directorate) may be included in pension calculations in the Elective Service
area. A message will be displayed advising that the Election in Progress
is included as part of the calculation.
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The Page Help (F3) function key and the Element
Help (F4) function key have been updated to provide guidance to users on
the completion of the new and revised screens.
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4.2.3 |
ESTIMATES OF COST |
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There will be no change in procedures. Compensations
Advisors will not be required to separate the period for estimation as the
date of the election determines the Fund to which the service and contributions
will be credited.
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Estimates will provide lump sum payments and
monthly instalment costs at the single and the double rates.
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Estimates that are processed by the Superannuation
Directorate will be displayed on a revised PWGSC-TPSCG 2057 "Estimate of
Cost for Elective Pensionable Service". Separate estimates will be provided
for each period of service with the appropriate cost either at single or
at double rate.
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4.2.3.1 |
ENHANCEMENTS |
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The Estimate of Cost Calculation Screen (CAL)
has been modified to display the Assigned Work Week (AWW) and Scheduled
Work Week (SWW).
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4.2.4 |
ELECTIONS |
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When an employee completes an election on or
after April 1, 2000, Compensation Advisors must ensure that the new deduction
codes for PSSA 2 at the single or double rate are used when starting the
monthly deductions. The codes are listed in Appendix
A.
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Lump sum payments for periods of elective service
must clearly reflect the correct Fund and the breakdown by single and double
rate.
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The PWGSC-TPSGC 2097 "Elective Service Notice"
will now display the SWW and the AWW as well as the monthly deduction requirement
at single and double rate. Based on the date of election either Fund 1 or
Fund 2 will be displayed.
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The PWGSC-TPSGC 2092 "Election to Surrender
Benefits" has been revised and should be used for all surrenders made on
or after April 1, 2000. This will ensure the allocation of the funds to
the proper pension account.
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4.2.5 |
PENSION BENEFITS DIVISION SYSTEM (PBDS) |
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The PBDS will automatically calculate Fund 1
and Fund 2 benefit information.
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The following screens have been created or revised:
Screen |
Acronym |
Status |
Comments
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Contribution Calculation |
CON |
Revised |
Used to calculate contributions to be
divided. Contributions can now be captured quarterly
for non-vested employees. |
Special Process |
CSP |
New |
Used for part-time employees to calculate
Fund 1 and Fund 2. This screen will also be used by the Superannuation
Directorate for special cases.
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ATC and CSC |
CAC |
New |
Used for ATC and CSC employees with operational
service.
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Fund information |
CFU |
New |
Provides pension division information
by Fund 1, Fund 2, Operational Fund 1 and Operational Fund 2.
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Pension Division Request |
CAR |
Revised |
The cohabitation period will be broken
down into Fund 1 and Fund 2 (system generated). This screen will also
show the date on which the employee reached 35 years of pensionable
service, if applicable.
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Service Calculation |
CSR |
Revised |
Service information must be entered by
Fund (PSSA1/PSSA2, RCA1/2 and RTA) and broken down between elective
service and non elective service.
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Calculation |
CCA |
Revised |
Displays a blended calculation.
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Pension Benefit Report |
CP1 |
Revised |
Now provides breakdown of contributions
and displays elective service/LWOP, RTA/CFSA/RCMP, and non-elective
service.
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The Page Help (F3) function keys and the Element
Help (F4) function keys have been updated to provide guidance to the users
on the completion of the new and revised screens.
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Section 12.4 has been added to form ADM 270E
"Pension Benefits Report (Pension Benefits Division Act)". This form is
being revised but will not be available until late spring. In the interim,
a revised copy is attached in Appendix B
of this directive.
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The PBDA User Guide has been revised and will available on April 1, 2000,
at the following address:
Internet - http://www.pwgsc.gc.ca/compensation/pbds/
pbds-toc-e.html
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The PWGSC-TPSGC 2055 "PBDA Information Request
Worksheet" will also be revised. In the interim, the Superannuation Directorate
will accept the current version of the form.
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4.2.5.1 |
ENHANCEMENTS |
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The Pension Division System has been enhanced
and now calculates an accurate division calculation where the employee has
part-time service and/or Operational Services (Correctional Service
or Air Traffic Control). Such requests should therefore no longer be sent
to the Superannuation Directorate.
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Where an estimate for pension division includes
RCA salary in excess of the PSSA salary threshold, the Pension Division
System now splits the payment between PSSA 1, PSSA 2, RCA 1 and RCA 2.
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4.2.6 |
ANNUITANT SYSTEM |
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The Annuitant System is used by the Superannuation
Directorate to issue payments to annuitants and survivors. Although Fund
1 and Fund 2 benefits are managed separately, one blended payment will be
issued to annuitants or their survivors.
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4.3 |
STATEMENT OF EARNINGS |
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For the purposes of reporting contributions
on payment stubs, contributions will be combined as one value and displayed
in the "Superannuation" box of the Statement of Earnings.
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4.4 |
INCOME TAX REPORTING |
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There are no changes to income tax reporting
as the combined value of both Funds will be reported as one value.
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4.5 |
MANUALS |
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The following manuals will be updated to reflect
all Pension Reform changes:
Superannuation Administration Manual (SAM)
Personnel Pay Input Manual (PPIM)
Pension Support System (PSS)
Superannuation Procedures Manual for Personnel Offices serviced by the Regional
Pay System (PER)
Superannuation Procedures Manual for Public Service Corporations (PSC)
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4.6 |
FORMS |
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The amended forms must be ordered from the appropriate
Printing Plant in the usual manner or may be obtained electronically.
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5 |
INQUIRIES
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5.1 |
Any request for information regarding the foregoing
should be addressed to your Public Works and Government Services Canada
(PWGSC) Compensation Services Office.
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R. Jolicoeur
Director General
Compensation Sector
Government Operational Service