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1 |
PURPOSE |
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1.1 |
The purpose of this directive is to provide CSC compensation advisors with information regarding the changes being made to the PSS and the CS in order to provide accurate pension estimates for employees engaged in operational service. These changes will be in production effective September 20, 2004.
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1.2 |
Client departments other than CSC who have employees with 20 or more years of pensionable operational service with CSC must contact the Superannuation, Pension Transition and Client Services Sector (SPTCSS) in order to obtain a pension estimate calculation for the operational service or for the combination of operational and non-operational service.
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1.3 |
This directive should be read in conjunction with Chapter 9 of the Superannuation Administration Manual (SAM) as well as SAM Special Bulletin 1994-004. A Job Tool has also been developed and will be provided separately to all CSC compensation advisors. The distribution of this Job Tool will be co-ordinated by Diane Bazinet, Director of Corporate Compensation Policy, Labour Relations Directorate, CSC.
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1.4 |
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 |
Currently, CSC compensation advisors must perform operational service pension estimates by using a standalone application.
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3 |
POLICY |
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3.1 |
Amendments to the Public Service Superannuation Regulations (PSSR), which came in effect on March 18, 1994, provide CSC employees engaged in operational service with an early retirement option. |
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3.2 |
Benefit Entitlements |
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3.2.1 |
Under the CSC provisions, the following benefit options are available to those contributors under the Public Service Superannuation Act (PSSA) who are engaged in operational service and have two or more years of pensionable service to their credit upon ceasing to be employed in the public service. The requirements for a pension benefit based on operational service are outlined in SAM Section 9-2-2.
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3.2.2 |
Operational Service Only
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If the contributor meets the age and years of service requirements, he can opt for an immediate annuity or an annual allowance under the CSC provisions; or
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- He can opt for a pension benefit under the normal provisions of the PSSA such as a deferred annuity, annual allowance (not payable before the age of 50) or, if less than age 50, a transfer value. This would mean that all of the service would be treated as non-operational.
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3.2.3 |
Combination of Operational and Non-operational Service |
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If the contributor's pensionable service consists of both operational service and non-operational service and he meets the age and service requirements under the CSC provisions, he can opt for one of the following options: |
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- An immediate annuity or annual allowance calculated on the operational service only and a pension benefit under the normal provisions of the PSSA such as a deferred annuity, annual allowance* (not payable before the age of 50) or, if less than age 50, a transfer value calculated on the non-operational service only; or
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- A pension benefit under the normal provisions of the PSSA calculated on both the operational service and non-operational service. In this instance, all of the pensionable service would be treated as non-operational.
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- *Annual allowance:If the employee opts for an annual allowance based on the balance of his non-operational service, the total service (operational and non-operational) is to be used to determine the reduction. However, only the PSSA service will be used to perform the benefit calculation.
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3.3 |
Operational Service Pension Indexing |
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3.3.1 |
CSC benefits are indexed using the 85 formula, meaning that generally the indexing will become payable in the month in which age and service add up to 85. Indexing is payable at the earliest at age 55 and at the latest at age 60. This special indexing provision is outlined in SAM Section 9-2-5.
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3.4 |
Responsibility |
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3.4.1 |
It is crucial that the compensation advisor identify and calculate all benefit entitlements in order that the employee may make an informed decision. In some cases, it may be more beneficial for the employee to choose one benefit payable under the regular PSSA provisions based on the total pensionable service. Compensation advisors should contact the SPTCSS for advice on complex cases.
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4 |
PROCEDURES |
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4.1 |
New PSS screens have been designed to allow compensation advisors to perform pension estimates for employees with operational service only or a combination of operational and non-operational service. The screens will be similar to the existing PSS calculation screens. In addition, a new menu screen has been designed to allow users to select the appropriate option for an employee with either operational service or a combination of operational and non-operational service. |
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4.2 |
A new field has also been introduced to accommodate the indexing "payable" date for CSC benefits based on the special formula. |
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4.3 |
For detailed information on the system enhancements, please consult the "Job Tool". |
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4.4 |
As mentioned in section 3.2, an employee with operational service may choose to receive a benefit under the regular PSSA provisions based on all the service, in lieu of a CSC benefit. As compensation advisors do today, PSSA pension estimates and SUBMITS of salary and service data are to be performed using the regular PSS screens. |
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4.5 |
Pension Benefits Division |
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4.5.1 |
It is important to note that the PSS will NOT be able to perform an adjusted pension benefit calculation where a pension benefits division has been finalized with operational service information. In these cases, compensation advisors are to contact the SPTCSS. |
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4.6 |
Service Codes |
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4.6.1 |
The current operational service will be identified separately from the non-operational service in order to provide accurate pension estimates. |
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4.6.2 |
Service code 500 will identify current operational service for an employee who is struck off strength or an employee who previously had operational contributory service and is currently a non contributor. Service code 501 will illustrate current operational service for an employee in operational service who is active or temporarily struck off strength (T-SOS). These codes may be modified for pension quotation purposes only. |
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4.6.3 |
Changes have been made to the election process to accurately calculate the elected service credit for operational service employees. There is no longer a requirement to modify (delete) service codes 150 (PS [Public Service]) and 182 (CS [Correctional Service]) when performing benefit estimates. |
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4.6.4 |
A new field called "TYPE" is being introduced to allow compensation advisors to enter "additional" service when performing operational pension estimates. The value "O" is to be entered to identify operational service and an "N" for non-operational service. The system will use this field to determine the type of elected service to be included in the pension estimate. |
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4.6.5 |
For cases where there are discrepancies in the service codes displayed on the Service Maintenance Screen that cannot be amended by a pay transaction, compensation advisors must complete and forward form PWGSC-TPSGC 110 (Contributor System - Correction Request) to the SPTCSS. |
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4.7 |
SUBMIT Reasons |
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4.7.1 |
New codes have been introduced to identify the reason for initiating the SUBMIT for an employee who opts for an operational service benefit or a combination of both an operational and non-operational service benefit. The submit reasons are: |
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- Reason 12 - Oper. Retirement
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- Reason 13 - Oper. and Non-Oper. Retirement
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- Reason 14 - Oper. Retirement and Transfer Value
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4.7.2 |
A submit of salary and service for division of pension benefits (SUBMIT reason 01) should not be performed for employees who have operational service or a combination of operational and non-operational service. For these cases, the compensation advisor should simply verify the information and notify the SPTCSS. |
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4.7.3 |
The compensation advisor will no longer be required to complete form PWGSC-TPSGC 2471 (Certification of Operational Service - Correctional Service Canada) upon termination. The verification of current service, salaries and periods of leave without pay (LWOP) will be done using the Contributor Verification System. Form PWGSC-TPSGC 2471 will continue to be needed to certify operational service when an election for prior contributory operational service is made.
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5 |
INQUIRIES |
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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. |
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