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1 |
PURPOSE |
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1.1 |
The purpose of this directive is to provide Compensation Advisors with information concerning the reporting requirements of pensionable Pay Equity payments to the Superannuation Directorate. In addition, this directive describes the effects that the Pay Equity settlements will have on current and former employees as well as annuitants under the Public Service Superannuation Act (PSSA).
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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 |
An agreement to resolve the Pay Equity complaint was reached between the Treasury Board Secretariat (TBS) and the Public Service Alliance of Canada (PSAC) on October 29, 1999, and approved by the Canadian Human Rights Tribunal (CHRT) on November 16, 1999. The settlement applies to the Clerical and Regulatory (CR), Library Science (LS), Educational Support (EU), Data Processing (DA-CON), Secretarial, Stenographic and Typing (ST) and Hospital Services (HS) groups.
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2.2 |
An agreement was also reached between the representatives of the PE National Assembly (PENA) and TBS on November 26, 1999, and approved by the CHRT on February 24, 2000. This settlement applies to the Personnel Administration (PE) group only.
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2.3 |
This directive should be read in conjunction
with Compensation Directive 2000-004 dated February
1, 2000, entitled "Pay Equity Implementation - CR, ST, DA-CON, HS, LS and
EU Groups", Compensation Directive 2000-015
dated May 19, 2000, entitled "Additional Information on the Implementation
of the Pay Equity Agreement", and Compensation
Directive 2000-019 dated June 21, 2000, entitled "Implementation of
Pay Equity for the PE Group".
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3 |
POLICY |
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3.1 |
Since some of the settlement entitlements are pensionable, adjustments must be made to former employees' pensionable salary information for the purpose of revising the employee's annuity or lump sum pension benefit.
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3.2 |
Compensation Advisors are required to report all pensionable Pay Equity amounts to the Superannuation Directorate using the reporting methods described in Section 4 of this Directive. The Superannuation Directorate will adjust the pension payment as soon as possible after receiving the certified documentation.
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4 |
PROCEDURES/INSTRUCTIONS |
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4.1 |
It is important to note that the instructions described below are to be completed for each account only after all pensionable Pay Equity payments have been made.
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4.2 |
Reporting Pensionable Pay Equity Amounts Via the PSS |
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The "SUBMIT" (SUBM) action via the Pension Support System (PSS) must be used by Compensation Advisors to report the additional pensionable earnings to the Superannuation Directorate in all cases where the PSS was used on termination, for all PE pay equity cases, for all cases where a Transfer Value (TV) benefit was paid, and for all cases involving part-time service.
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Compensation Advisors may not be aware of certain instances where an employee initially chose a Deferred Annuity but opted for a TV during the transition period. For these particular cases, the Superannuation Directorate will request that the salary history be entered on the PSS before a recalculation of the TV amount can be performed.
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Compensation Advisors must ensure that full salary details are entered in the PSS for all individuals with part-time service prior to doing the "SUBMIT" (SUBM) action.
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4.3 |
Reporting Pensionable Pay Equity Amounts Via the Excel/Lotus Pay Equity Tools |
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Where the PSS was not used on termination for former employees who are entitled to the CR, DA, EU, HS, LS or ST settlement, Compensation Advisors must provide the Superannuation Directorate with a paper copy of the Excel/Lotus spreadsheet used to perform the employee's calculations. Compensation Advisors must ensure that the employee's name and Superannuation number are clearly identified on each spreadsheet.
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4.4 |
Other Documentation Required |
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A "Certification Notice - Pension Support System" (PWGSC-TPSGC 2386) is required for all cases. As per normal procedures, any outstanding deficiencies must be reported on this form by the Pay Office to ensure its full recovery. For cases where the "Excel/Lotus Pay Equity Tool" was used for reporting pensionable amounts, the spreadsheet must be attached to the PWGSC-TPSGC 2386.
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Compensation Advisors are also required to indicate the employee's most recent home address and attach this information to the PWGSC-TPSGC 2386.
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4.5 |
LWOP during the Retroactive Period |
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In cases where a period of pensionable leave without pay (LWOP) occurred during the retroactive period, the Pay Equity amounts must still be reported to the Superannuation Directorate for purposes of adjusting the pension benefit. As mentioned above, any outstanding pension deficiencies will be reported on a PWGSC-TPSGC 2386.
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4.6 |
ROC |
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There is no requirement to report Pay Equity amounts where the employee's option on termination was a return of contributions (ROC). Any pension contributions that were deducted from the Pay Equity payments for these former employees were refunded automatically during the first week of June 2000.
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There are also instances where an option for an ROC was reversed in favor of a TV during the transition period. It is important to note, that in these cases, the automatic refund of PSSA contributions withheld from the Pay Equity payment should not have occurred. These cheques should not have been released to the employee. If the payment was released to the employee, the Pay Office must ensure that the amount to be recovered is recorded on the PWGSC-TPSGC 2386 to ensure recovery from the TV adjustment.
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Pension contributions were withheld from the Pay Equity payments made to former employees who received ROCs and are now re-employed in the Public Service. These contributions were not refunded automatically. In these situations, the Compensation Advisor should confirm that an ROC was paid before requesting the Pay Office to refund the pension contributions.
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Confirmation can be obtained by locating the PWGSC-TPSGC 2577 "Request for Return of Superannuation Contributions" in the personnel file. This information may also reside on the Contributor Inquiry--SOS screen. If a PWGSC-TPSGC 2577 cannot be found on the file, the Compensation Advisor should request confirmation of the ROC payment from the Pay Office. Only once all attempts have been unsuccessful should a Compensation Advisor ask the Superannuation Directorate for confirmation.
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4.7 |
RTA--Out |
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There is no requirement to report Pay Equity amounts where the employee's option on termination was a Reciprocal Transfer Agreement (RTA)--Out, unless the former employee requests that his RTA be recalculated.
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Please note that pension contributions were withheld from the Pay Equity payment for RTA cases. Where the former employee does not wish to have the RTA recalculated, the Compensation Advisor must contact the Pay Office to request a refund of these pension contributions.
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If the former employee requests that his RTA be recalculated, the pension contributions are not to be refunded and the former employee must contact the Superannuation Directorate directly concerning the recalculation.
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4.8 |
Recovery of Deficiencies - Employees who have completed 35 Years Service |
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Insufficient pension contributions were deducted from Pay Equity cheques for those employees/former employees who completed 35 years of pensionable service. In these cases, contributions at a rate of 1% were deducted for the full Pay Equity payment, including the period prior to completion of 35 years of service.
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Every effort must be made to collect any deficiencies from future Pay Equity payments. If it is not possible to recover the pension deficiencies from further Pay Equity payments, it will be appropriate for any outstanding deficiencies to be recovered from other payments such as regular pay. The amount will be recovered over a period twice as long as that over which the deficiency occurred or in the case of financial hardship, over three times the period of the deficiency.
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Any individuals in these circumstances who will retire, or who have already retired, will have this recovery action handled by the Superannuation Directorate. Outstanding deficiencies must be reported on the PWGSC-TPSGC 2386 by the Pay Office.
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4.9 |
TV |
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All TVs affected by the pay equity payments will be recalculated by the Superannuation Directorate.
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In cases where the recalculation of the TV results in an adjustment to the "in-limit" portion of the payment, the amount must be transferred to a locked-in retirement vehicle. Unless advised otherwise, the Superannuation Directorate will transfer the additional funds to the account identified on the "Direct Transfer of a Single Amount Under Subsection 147(19) or Section 147.3" (T2151 E) provided by the former employee for the original payment.
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In cases where the recalculation of the TV results in an adjustment to the "out-limit" portion of the payment, and the original "out-limit" portion was paid directly to the former employee, the adjustment will also be paid directly to him. However, if all or a portion of the "out-limit" was originally transferred to a Registered Retirement Savings Plan (RRSP), the Superannuation Directorate will contact the former employee for payment instructions.
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4.10 |
Pension Benefits Division Payments |
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As mentioned in Compensation
Directive 2000-04 dated February 1, 2000, recalculations of Pension
Benefits Division payments will not be performed.
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When preparing estimates it is important to remember that, as per the normal process, where the Period Subject to Division (PSTD) ends prior to the authorization date, the salary adjustments are not to be included in the calculation of the average salary for Pension Division purposes. The authorization date of the Pay Equity agreement for the CR, DA, EU, HS, LS, and ST groups is November 16, 1999. The authorization date of the agreement for the PE group is February 24, 2000.
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Compensation Advisors should ensure that where an estimate is prepared, and the PSTD ends after the authorization date, the employee is advised that a second estimate may be required once all Pay Equity payments have been issued. This second estimate might be required since the average salary calculation performed for Pension Division purposes may or may not have included all eligible pensionable Pay Equity amounts. Once all payments have been made, the Compensation Advisor will determine whether all Pay Equity amounts shown in the PSS should be included in the calculation and make the required adjustments.
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4.11 |
Communication with the Superannuation Directorate |
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Due to the significant impact of Pay Equity adjustments on the workload of the Superannuation Directorate, we recommend that any communication relating to these adjustments be done using the facsimile facility (1-506-533-5989).
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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
[Print Version]