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1 |
PURPOSE |
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1.1 |
The purpose of this Advice is to provide Public Service Corporations not serviced by the Regional Pay System with information relative to a change in the Pension Adjustment (PA) formula announced in the Budget Bill of February 18, 1997. |
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2 |
PROCEDURES |
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PA Calculations |
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2.1 |
For 1997 and future years, the PA calculation will be based on the benefit entitlement multiplied by the factor 9 less $ 600.00. |
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NOTE: For 1990 - 1996, the PA formula was based on 9 x Benefit Entitlement - $ 1000.00. The PA continues to be pro-rated for partial years. It is important to note that the PA for the year of termination is calculated the same as the PA for other years, for example, the PA in the year of termination is the calculated PA not the amount of the Return of Contributions (ROC). |
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Pension Adjustment Reversal |
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2.2 |
The Budget Bill also announced the introduction of Pension Adjustment Reversal (PAR) starting in the 1998 tax year. |
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2.3 |
The purpose of the PAR is to reinstate lost RRSP room for members who leave the pension plan without a continuing pension entitlement. PAR reporting will be required for all cases where the member receives an ROC or a Transfer Value Benefit. |
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2.4 |
In general the PAR is calculated as the total of PAs reported since 1990 less ant amount paid-out of the pension plan as an ROC or a Transfer Value. For this reason, you should ensure that records of the employees' PAs from 1990 onwards remain available. |
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2.5 |
It is anticipated that, PAR reporting for the 1997 tax year will be required by late 1998. Specific information regarding PAR reporting and data requirements will be made available to you before this time. |
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3 |
INQUIRIES |
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3.1 |
Any request for information regarding the foregoing should be address to your Public Works and Government Services (PWGSC) Compensation Services Office. |
