|
1
|
PURPOSE
|
|
1.1
|
The purpose of this directive is to advise
departments, agencies and Crown corporations serviced by the Regional
Pay System (RPS) of the new automated process associated with the cessation
of pension contributions for those employees who have reached age 69.
|
|
1.2
|
This directive must be read in conjunction
with the Superannuation Administration Manual (SAM) Special Bulletin
2002-004, entitled "Changes to the Public Service Superannuation Regulations
- Change in age limit for contributing to the Public Service Pension
Fund (from 71 to 69)".
|
|
1.3
|
In this text, use of the masculine is generic
and applies to both men and women.
|
|
2
|
BACKGROUND
|
|
2.1
|
In order to cease the deduction of pension
contributions for those employees who had reached the age limit for contributing
under the Public Service Superannuation Act (PSSA), compensation
advisors were required to perform a pay transaction via the RPS to change
the employee's pension status from a contributor to a non-contributor.
|
|
3
|
POLICY
|
|
3.1
|
As stated in the SAM Special Bulletin 2002-004,
effective January 1, 2003, and thereafter, contributors who reach the
age of 69 during the current year will cease to contribute to the Public
Service Pension Plan effective January 1 of the following year.
|
|
4
|
PROCEDURES/INSTRUCTIONS
|
|
4.1
|
Effective 2003, a new automated process
will be implemented as part of the RPS year-end activities. This process
will automatically change the pension status of all active and temporary
inactive accounts where the employee reached age 69 during the current
year. The system will calculate the age of the employee, as of December
31 of that year, using the date of birth in Field 16 of the RPS for all
active and temporary inactive accounts. The RPS will create a "miscellaneous
staffing action" (MSA) transaction and change the pension type code to
59 (non- contributor) effective January 1 of the following year for those
accounts where the employee age equals 69 or greater, and where the pension
type code is 01, 02, 03, 04, 10, 13, 18 or 62 in Field 39. It should
be noted that this automated process will only affect accounts identified
as contributor accounts in the RPS.
|
|
4.1.2
|
For instances where January 1st is not equal
to the first day of the pay period, pension contributions will not be
deducted for the full pay period. Therefore, an error analysis report
containing the following message "N15 - MAN ADJ MAY BE REQUIRED - FROM
DATE NOT = PP START DATE" will be produced and sent to the regional pay
office (RPO). The RPO will be responsible to make the necessary adjustments.
The adjustments will consist of collecting pension contributions from
the first day of the pay period up to and including December 31.
|
|
|
Example:
|
|
|
An employee who is a contributor under the
PSSA reaches the age of 69 during the year 2004. His pension type code
in Field 39 of the RPS is 01. In accordance with the Public Service Superannuation
Regulations (PSSR), the employee will cease to contribute to the pension
plan effective January 1, 2005. As part of the year-end activities for
2004, an MSA will be created to change the employee's pension type code
from 01 to 59 with an effective date of January 1, 2005.
|
|
|
Pension contributions will not be deducted
for the full pay period. Since the first day of the pay period for the
calendar year 2005 is December 30, 2004, and the effective date of the
change in the pension status of the employee is January 1, 2005, the
RPO will recover the deductions that should have been taken for December
30 and 31.
|
|
4.1.3
|
Employees who have a non-contributor
status
|
|
|
Compensation advisors will be responsible for creating an MSA transaction
for those employees who attain the age of 69 and for whom the pension
type code in Field 39 of the RPS is equal to 53, 54, 55, 56, 57, 58,
60 or 64. The MSA transaction must be created with an effective date
of January 1 following the year in which they reach the age of 69. When
changing the pension status for these employees, compensation advisors
must enter pension type Code 59 in Field 39.
|
|
|
Example:
|
|
|
An employee who is age 69 is hired for a term of less than six months
for the period of September 8, 2003, to January 30, 2004.
Because the period of employment is less than six months, the employee
is not eligible to contribute to the pension plan and the pension type
code in Field 39 must be 53.
|
|
|
However, because the employee reached the age of 69 during the year
2003, effective January 1, 2004, he will not be eligible to contribute
to the pension plan even if the period of employment was extended for
a period exceeding six months. The compensation advisor will have to
create an MSA to change the pension type code in Field 39 of the RPS
from 53 to 59 with an effective date of January 1, 2004.
|
|
4.2
|
Report
|
|
4.2.1
|
A report entitled "Master Bulk Transaction
Report - Age 69 Contributory Status Change" will be produced. This report
will identify those accounts for which an MSA transaction has been created
and for which the pension type code has been changed to 59. The report
will be sorted by pay office, department, paylist and Personal Record
Identifier (PRI). For each department and paylist, the report will display
the PRI, surname and initials and activity status ("X" for active employees
and "T" for temporarily struck off strength employees) of the affected
accounts. Also, the report will indicate that Code 59 was imposed in
Field 39.
|
|
|
The report will be generated once the year-end
activities and the rollover for the new year have been done. The report
will be sent to departments, agencies and Crown corporations serviced
by the RPS.
|
|
|
|
If there are no accounts for contributors age 69 or over for a particular
paylist, department or pay office, no report will be produced.
|
|
4.3
|
Contributor System and Pension Support
System
|
|
4.3.1
|
The MSA transaction to change the pension type code will update the
Contributor System. The "Status Information #1" (STS) screen will be
updated and the contributor status for all affected accounts will be
changed to "N" (non-contributor). The pension type code 59 will also
be imposed. A new service code "969" will be generated for those affected
accounts and will be displayed on the "Service" (GEN) screen of the Contributor
System and the "Service" (GEQ) screen of the Pension Support System.
All service identified as Code 969 will be excluded from any pension
benefit calculation. Also, all corresponding salaries will be excluded
from the average salary calculation.
|
|
5
|
INQUIRIES
|
|
5.1
|
Any inquiries on the information contained
in this document should be addressed to your Public Works and Government
Services Canada (PWGSC) Compensation Services Office.
|