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1 |
PURPOSE |
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1.1 |
The purpose of this directive is to provide
client departments with information regarding new Regional Pay System (RPS)
deduction/entitlement (DEDENT) codes required for Public Service Pension
Fund (PSPF) and Retirement Compensation Arrangement (RCA) account contributions,
for employees engaged in operational service with Correctional Service
Canada (CSC). |
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1.2 |
All compensation advisors should be aware of
the provision, in the event that CSC employees later join their respective
departments. |
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1.3 |
For additional information regarding the CSC
special pension arrangements, compensation advisors should consult the
Superannuation Administration Manual (SAM) Special Bulletin 1994-004 entitled "Correctional
Service Canada - Early Retirement Benefits Provision" and section 9 of
the SAM.
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2 |
BACKGROUND |
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2.1 |
Since March 18, 1994, the Public Service Superannuation
Regulations provide special pension arrangements for CSC employees engaged
in operational service. |
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The special provision allows for a lower age
at retirement and a reduction in the number of years required to qualify
for a pension. An additional contribution is required from employees subject
to this special provision.
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3 |
POLICY |
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3.1 |
Every person employed by CSC in operational
service and required to contribute to the Public Service Superannuation
Account (PSSA) or the PSPF on or after March 18, 1994, is subject to the
aforementioned CSC provision and must contribute an additional 1.25% of
salary to the PSSA/PSPF or the RCA account. Currently, compensation advisors
use pension code 18 to identify those contributors who become subject to
the CSC special provisions. The use of this code results in the withholding
of an additional 1.25% pension contribution from the employee's salary,
for current service. |
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3.2 |
Since the employer's share for the additional
1.25% CSC contribution for current service, leave without pay (LWOP), and
elections is different than the rate required for the regular PSPF and
RCA contribution, there is a necessity to distinguish them when being collected
from pay, pensions and/or paid via a lump sum payment. |
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NOTE 1: The additional 1.25% contribution need
only be identified for current contributions, and for recovery of deficiencies
for periods of LWOP and elections which will be processed in the future.
There is no requirement to convert or amend any existing recovery of deficiencies
for LWOP or elections that have already been processed. Therefore, no new
DEDENT codes were created under the PSSA, only under the PSPF and the RCA. |
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NOTE 2: The first phase of this initiative
will focus on splitting the current contributions and future recovery of
deficiencies for periods of LWOP. The second phase, scheduled to come into
effect next year, will focus on the requirements to split contributions
for elections processed after the implementation date and for future recoveries
from pension benefit entitlements. |
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3.3 |
The new DEDENT codes, which have been created
to identify the additional 1.25% contribution, are as follows: |
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5B6 Superannuation -- current -- 1.25% |
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This new code will be used to identify the
1.25% that is already included in the PSPF calculation. |
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5B7 Superannuation -- Single Deficiencies --
1.25% |
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This new code will be used to identify the
1.25% that is already included in the PSPF low and high single rate deficiencies
(includes arrears and LWOP). |
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5B8 Superannuation -- Double Deficiencies --
2.50% |
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This new code will be used to identify the
2.50% that is already included in the PSPF low and high double rate deficiencies
(includes arrears and LWOP). |
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5C1 RCA -- current -- 1.25% |
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This new code will be used to identify the
1.25% that is already included in the RCA calculation. |
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5C2 RCA -- Single Deficiencies -- 1.25% |
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This new code will be used to identify the
1.25% that is already included in the RCA single rate deficiencies (includes
arrears and LWOP). |
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5C3 RCA -- Double Deficiencies -- 2.50% |
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This new code will be used to identify the
2.50% that is already included in the RCA double rate deficiencies (includes
arrears and LWOP). |
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3.4 |
If a deduction is created using these new codes,
the Deduction Entitlement Select (DDT) screen will recognize it and reflect
it accordingly.
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4 |
PROCEDURES/INSTRUCTIONS |
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4.1 |
These new deduction codes will become effective
on August 26, 2005. As of that date, compensation systems will be programmed
to reflect the proper split automatically in PSPF and RCA current contributions
for accounts with pension type code 18. |
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4.2 |
Pay Office |
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4.2.1 |
For contributions relating to operational service
(reflected by pension type code 18), the pay and pension agents will be
required to distinguish the PSPF and/or the RCA contributions from the
additional 1.25% CSC contribution using the new codes when issuing a refund
of excess contributions, when calculating arrears and deficiencies, or
when proceeding with any other type of adjustments to contributions. |
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4.2.2 |
RE-TOS Calculation System |
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The current version of the RE-TOS Calculation
System has the facility to calculate the additional 1.25% contribution
and includes it in the PSPF and the RCA contributions. The RE-TOS Calculation
System will be amended later this year to split the contributions by generating
the new 5B7, 5B8, 5C2, and 5C3 codes to be used by the pay and pension
agent for input into the RPS. Until such time as the RE-TOS Calculation
System is modified, pay and pension agents will be required to manually
split the additional 1.25% CSC contribution from the regular PSPF and RCA
contribution. If an employee wants to make a lump sum payment to pay deficiencies,
the pay office will provide the split amount of contributions to the compensation
advisors so that it can be properly reported on the PWGSC-TPSGC 4005 form
and through Cash Receipt (CRT) transactions (see section 4.4.2 below). |
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4.3 |
Supplementary Calculate Process and Regular
Pay Process |
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4.3.1 |
Currently, the additional 1.25% contribution
is included in the Supplementary Calculate Process and in the Regular Pay
Process of the RPS under the PSPF or the RCA codes for accounts with pension
code 18. The additional 1.25% contribution will be removed to reflect only
the PSPF and the RCA contributions. |
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The Supplementary Calculate Process (current
or previous year) and the Regular Pay Process will be modified to generate
code 5B6 to identify the 1.25% CSC additional contribution for the PSPF.
This amount will be posted as a separate deduction and will update element
711 of the Master Employee Record (MER). However, the payroll registers
for supplementary pay and regular pay will reflect this amount under the
allowances/deductions column instead of appearing in the PSSA HI column.
That same amount will appear on the bottom half of the cheque stub (as
a separate line), though it will be part of the cumulative year to date
amount for superannuation (shaded section of the superannuation box). |
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The Supplementary Calculate Process (current
or previous year) and the Regular Pay Process will be modified to generate
code 5C1 to identify the 1.25% CSC additional contribution for the RCA.
This amount will be posted as a separate deduction and will update element
745 of the MER. However, the payroll registers for supplementary pay and
regular pay will reflect this amount under the allowances/deductions column
instead of appearing under the RCA deduction (783) and it will appear on
the bottom half of the cheque stub (as a separate line). This amount will
not form part of the cumulative year to date total shown for superannuation
on the cheque stub. |
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4.4 |
LWOP and Non-Payables |
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4.4.1 |
New PSPF and RCA codes have been created to
calculate retroactive LWOP periods applicable to non-payable codes 202
and 270 for accounts with pension type code 18. |
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Codes 5B7 (for the additional 1.25 % contribution
for the PSPF) and 5C2 (for the additional 1.25% contribution for the RCA)
will be generated when calculating retroactive (current and previous years)
amounts for non-payable code 202. |
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Codes 5B8 (for the additional 2.50% contribution
for the PSPF) and 5C3 (for the additional 2.50 % contribution for the RCA)
will be generated when calculating the double portion for non-payable code
270. |
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4.4.2 |
When a contributor wants to make a cash payment
for LWOP deficiencies, the payment must be sent to her/his compensation
advisor who will forward the payment to the Superannuation, Pension Transition
and Clients Services Sector (SPTCSS) along with a breakdown of the period
to which the payment applies. |
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The form PWGSC-TPSGC 4005, Superannuation Remittance
For Employees on Leave Without Pay, must be used for this purpose. This
form has been amended so that the compensation advisor can split the payment
to reflect which portion is related to the regular PSPF contribution (or
RCA contribution) as opposed to the additional CSC contribution. Compensation
advisors must also create CRT transactions, as per Section 4-4-20 of the
Personnel-Pay Input Manual, using the appropriate pension deduction codes
applicable to the cash payment. |
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NOTE 1: The form PWGSC-TPSGC 2386, Certification
Notice, Pension Support System, has also been modified so that the additional
CSC contribution will be split from the regular PSPF and/or RCA contributions. |
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NOTE 2: Compensation advisors are reminded
that upon transfer from one department or pay office to another, all deductions
reflected on the DDT screen are to be commenced. This would include any
outstanding deficiency for the additional 1.25% pension contribution showing
under codes 5B7, 5B8, 5C2 or 5C3 which an employee must continue paying
even in the case where she/he no longer works for CSC. |
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4.5 |
Contributor System |
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4.5.1 |
The Contributor System Contribution and Interest
processes have been modified to accept the new DEDENT codes that are passed
via the RPS. |
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The On-line Contribution Maintenance application
used by the SPTCSS to correct rejects will also accept input using the
new DEDENT codes. |
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The new contribution transactions will update
the PSSA Contributions and RCA Contributions screens. Therefore, the Contribution
Summary Screen will display the combined contributions (regular and additional
1.25%) and interest. |
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As well, the new transactions will be used
to support the contribution accounting and reconciliation processes between
the Contributor System and the Common Departmental Financial System (CDFS). |
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4.6 |
Personnel-Pay Input Manual (PPIM) |
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4.6.1 |
The PPIM will be updated to incorporate all
related information contained in this directive.
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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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