Public Sector Pension Investment Board Act--Implementation
of the PSPF and System Enhancements
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1 |
PURPOSE
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1.1 |
The purpose of this Special Advice
is to provide information to Public Service Corporations and
Territorial Governments not using the Regional Pay System (RPS)
with information regarding the implementation of the Public
Service Pension Fund (PSPF). New remittance and reporting procedures
have been developed and are described herein. Public Works and
Government Services Canada (PWGSC) pension system enhancements
are also described in this directive. |
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This Advice should be read in conjunction
with Superannuation Administration Manual (SAM) Special Bulletins
1999-005 dated April
20, 1999, 1999-009
dated September 23, 1999, and 1999-011,
dated December 15, 1999. |
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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 |
The Public Sector Pension Investment
Board Act (PSPIBA), which was given royal assent in September
1999, amended several existing Acts, including the Public Service
Superannuation Act (PSSA), and provided for the creation of
a new pension fund whereby contributions paid by plan members
and employers are to be invested in financial markets by a Pension
Investment Board (PIB). |
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As a result, contributions and benefits
must be identified as Public Service Superannuation Account
(PSSA) or PSPF separately, accurately and in greater detail,
effective April 1, 2000.
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3 |
POLICY
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3.1 |
April 1, 2000, will be referred
to as the "effective date" hereunder. |
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PSSA can also be referred to as
Fund 1 or PSSA 1. PSPF can also be referred to as Fund 2 or
PSSA 2. |
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Employees with 35 years of pensionable
service will continue to contribute at a rate of 1%. For employees
who have reached 35 years of service before the effective date,
employee contributions and employer matching contributions at
the old rate will continue to be credited to the PSSA even after
April 1, 2000. For employees who have reached 35 years of service
on or after the effective date, employee contributions and employer
matching contributions at the new rate will be credited to the
PSPF. |
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Contributions required prior to
the effective date will be credited to the PSSA. Contributions
required on or after the effective date will be credited to
the PSPF. |
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Contributions for Leave Without
Pay (LWOP) deficiencies where the LWOP occurred prior to the
effective date will be credited to the PSSA. Deficiencies for
LWOP where the LWOP occurred on or after the effective date
will be credited to the PSPF. |
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Where an individual elected not
to count his LWOP, and later signs an election to count the
leave period which is dated on or after April 1, 2000, the service
will be credited to PSPF. |
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Contributions for past service elections
and reciprocal transfer agreements (RTAs), and service credits
for pension transfer agreements (PTAs) or pension surrenders,
where the election, transfer or surrender was made prior to
April 1, 2000, will be credited to the PSSA. Contributions for
past service elections and RTAs, and service credits for PTAs
or pension surrenders, where the election, transfer or surrender
was made on or after April 1, 2000, will be credited to the
PSPF. |
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Elections made on or after April
1, 2000, (PSPF) must also be broken down to identify elections
at the single rate and at the double rate. |
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Contributions, including retroactive
contribution recovery and/or adjustments in respect of PSSA
service will be credited to that account. |
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Retirement Compensation Arrangements
(RCA) contributions will continue to be credited to the RCA
account. |
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Benefits accrued prior to the effective
date will be charged to the PSSA. Benefits accrued on or after
the effective date will be charged to the PSPF. RCA benefits
will continue to be charged to the RCA Account (RCAA). |
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All benefit entitlements such as:
Returns of Contributions (ROCs), pension payments, Transfer
Values (TVs), Pension Benefits Division Act (PBDA) payments
and survivor benefit payments must be clearly identified for
accounting purposes as PSSA or PSPF. Although PSSA and PSPF
funds are identified separately, one blended payment will be
issued.
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4 |
PROCEDURES/INSTRUCTIONS |
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Instructions on revised procedures
and forms are provided below. |
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4.1 |
REMITTANCES |
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A separate breakdown of contributions
for the PSSA and the PSPF must be provided on monthly remittances.
Election and deficiency payments must also be identified by
fund as well as a breakdown between the single rate and the
double rates. |
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Monthly remittances are required
by the fifth working day of the following month. Late remittances
will be subject to interest penalties. |
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The employee contribution rate remains
unchanged. |
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The following table contains Public
Service Corporation contribution types and employer rates effective
April 1, 2000, for contributions to the PSPF. |
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Contribution
Type |
Employer Rate |
Current Service |
2.14 x employee contribution |
Elective/LWOP single rate |
2.14 x employee contribution |
Elective/LWOP double rate |
0.56 x employee contribution |
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Public Service Corporations are
expected to match employee contributions at the higher rate
starting April 1, 2000. It is recognized that, in general, April
1 is not at the beginning or end of a pay period . Public Service
Corporations are expected to determine the percentage of the
remittance that should be credited to each fund and to adjust
the remittance accordingly at the organizational level. |
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Example: |
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The last biweekly pay period of
March 2000 ends on March 29, 2000; March 30 and 31 are part
of the new pay period, but the remittances for those two days
should be credited to the PSSA, with a lower employer matching
rate. The following shows a hypothetical Public Service Corporation
that has collected $5,000 in contributions from its employees
for the pay period. The second pay period following April 1,
2000, will not have any of these complications. |
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Employee contributions for the pay
cycle spanning April 1: |
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Credit to the
PSSA (20%--2 days out of a 10 working day period) |
$1,000.00 |
Credit to the
PSPF (80%--8 days out of a 10 working day period) |
$4,000.00 |
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Total: |
$5,000.00 |
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Employer contributions for the pay
cycle spanning April 1: |
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Credit to the
PSSA (20%--2 days out of a 10 working day period--previous
rate) |
$1,000.00 |
Credit to the
PSPF (80%--8 days out of a 10 working day period--new
rate) |
$8,560.00 |
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Total: |
$9,560.00 |
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Total remittance: |
$14,560.00 |
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The PWGSC-TPSGC 2292 "Monthly
Remittance of Superannuation Contributions (Public Service Corporation)"
has been redesigned to reflect the split between PSSA and PSPF
and the requirement to submit more detailed arrears information. |
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The form consists of five sections.
The following provides instructions on how to complete each
of the sections. |
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Section 1: PSPF (Public Service
Pension Fund) |
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Line 5: Employee contributions for
current service (currently 4% on salaries up to the Yearly Maximum
Pensionable Earnings (YMPE) ($37,600 for the 2000 taxation year)
and 7.5% on salaries in excess of the YMPE; this line should
also contain any retroactive or lump sum payments for the year
in question; this will also include contributions for employees
with more than 35 years service (i.e. 1%)). |
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Line 6: Employee contributions for
prior years resulting from retroactive pay increases (this line
will not to be required until 2001; it is anticipated that the
employer contribution rate will remain constant for the next
four years, when the rate changes, this form will be redesigned). |
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Line 7: Employee contributions for
LWOP or on loan service--Single rate (note that LWOP and elective
service are now reported separately). |
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Line 8: Employee contributions for
elective service--Single rate (note that all elections signed
after March 31, 2000, even for service prior to April 1, 2000,
will be recorded here). |
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Line 9: Employee single rate contributions
requiring employer remittance (total of lines 5 to 8). |
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Line 10: Employer contributions--Single
rate (line 9 x applicable single matching rate [currently 2.14]). |
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Line 11: Employee contributions
for LWOP or on loan service--Double rate. |
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Line 12: Employee contributions
for elective service--Double rate. |
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Line 13: Employee double rate contributions
requiring employer remittance (total of lines 11 and 12). |
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Line 14: Employer contributions--Double
rate (line 13 x applicable double matching rate [currently 0.56]). |
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Line 15: Total contributions credited
to the PSPF (total of lines 9, 10, 13 and 14). |
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Section 2: PSSA (Public Service
Superannuation Account) |
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Line 16: Employee contributions
for current and retroactive service prior to April 1, 2000. |
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Line 17: Employee contributions
for LWOP or on loan service--Single rate. |
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Line 18: Employee contributions
for elective service--Single rate. |
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Line 19: Employee single rate contributions
requiring employer remittance (total of lines 16, 17 and 18). |
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Line 20: Employer contributions--Single
rate (line 19 x applicable single matching rate [1.0]). |
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Line 21: Employee contributions
for LWOP or on loan service--Double rate. |
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Line 22: Employee contributions
for elective service--Double rate. |
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Line 23: Total contributions credited
to the PSSA (total of lines 19 to 22). |
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Section 3: RCAA (Retirement Compensation
Arrangement Account) |
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Line 24: Employee contributions
for current service. |
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Line 25: Employee contributions
for LWOP or on loan service--Single rate. |
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Line 26: Employee contributions
for elective service--Single rate. |
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Line 27: Employee single rate contributions
requiring employer remittance (total of lines 24, 25, and 26). |
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Line 28: Employer contributions--Single
rate (line 27 x applicable single matching rate [currently,
11.93). |
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Line 29: Employee contributions
for LWOP or on loan service--Double rate. |
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Line 30: Employee contributions
for elective service--Double rate. |
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Line 31: Employee double rate contributions
requiring employer remittance (total of lines 29 and 30). |
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Line 32: Employer contributions--Double
rate (line 31 x applicable double matching rate [currently 5.465]). |
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Line 33: Employee contributions
prior year 1 (identify year). |
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Line 34: Employer contributions
prior year 1 (identify year and apply the appropriate rate for
that year). |
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Line 35: Employee contributions
prior year 2 (identify year). |
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Line 36: Employer contributions
prior year 2 (identify year and apply the appropriate rate for
that year). |
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Line 37: Total contributions credited
to the RCA (total of lines 27, 28, 31, 32, 33, 34, 35 and 36). |
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Section 4: SDBA (Supplementary
Death Benefit Account) |
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Line 38: Employee SDB contributions
(currently $0.15 per $1,000 of coverage). |
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Line 39: Employer SDB contributions
(currently $0.04 per $1,000 of the basic benefit). |
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Line 40: Total contributions credited
to the SDBA (Note: Please do not remit provincial sales tax
on Supplementary Death Benefit [SDB] premiums.) [total of lines
38 and 39]. |
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Section 5: Total Remittance and
Certification |
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Line 41: Total Remittance (total
of lines 15, 23, 37 and 40). |
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4.2 |
TERMINATION AND CONTRIBUTIONS
ADVICE |
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The PWGSC-TPSGC 2321 "Terminations
and Contributions Advice" form is being redesigned to reflect
the requirements of Pension Reform. Information will be required
for long term absences such as educational leave, and on loan
to unions or other organizations. Current procedures should
be maintained until the new form has been redesigned. Information
on the changes to the form and procedures will be forthcoming. |
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4.3 |
SUPERANNUATION REMITTANCE FOR
EMPLOYEES ON LWOP |
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Submission of the PWGSC-TPSGC 4005
"Superannuable Remittance for Employees on Leave Without
Pay" will become a requirement for employees remitting
contributions directly to the Superannuation Directorate. Currently,
submitting the form is an option. Superannuation Directorate
will be charging Public Service Corporations for employer contributions
directly related to employee contributions. Information on the
changes to the form and procedures will be forthcoming. |
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4.4 |
ANNUAL REPORTING |
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The annual method of reporting individual
contributions is being changed. For the 2000 calendar year,
the following information will be required: |
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individual contributions, superannuable
salary and service |
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for the year as it would normally
be identified on the PWGSC-TPSGC 2020 "Salary Service Information
Pension Support System". PWGSC is currently developing
a Data Collection and Remittance System (DCRS) which will help
Public Service Corporations to do their annual reporting. The
DCRS is expected to be ready for implementation by the end of
2000. Information on the annual reporting process and the DCRS
will be forthcoming.
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5 |
PWGSC SYSTEMS |
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PWGSC systems have changed as a
result of Pension Reform. Instructions on the elements that
have changed are provided below. |
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5.1 |
RE-TOS APPLICATION |
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Version 2.3.1 of the RE-TOS software
can be used in order to calculate LWOP deficiencies. The deficiencies
will automatically be calculated and attributed to PSSA or PSPF
based on the period of the LWOP. The RE-TOS application is available
for downloading from the Compensation Sector Web site under
the menu item SOFTWARE, at the following addresses:
Internet--http://www.pwgsc.gc.ca/compensation
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Example:
Period of single rate LWOP from February 1, 2000, to April 30,
2000
Period of double rate LWOP from May 1, 2000, to May 31, 2001
Deficiencies:
01 02 00 1 to 31 03 00 2--Single rate (PSSA)
01 04 00 1 to 30 04 00 2--Single rate (PSPF)
01 05 00 1 to 31 05 01 2--Double rate (PSPF)
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LWOP deficiencies, paid while the
employee is still on leave, must be clearly identified as PSSA
or PSPF when remitted to the Superannuation Directorate. The
PWGSC-TPSGC 4005 will change as described in subsection 4.3.
This form should be used for all LWOP remittances to the Superannuation
Directorate including on loan cases.
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The PWGSC-TPSGC 2480 "Election
Not to Count Leave Without Pay as Pensionable Service"
must reflect deficiencies credited to each fund. The amended
form will be available shortly at which time a Forms Advice
will be issued. Until the amended forms are available, deficiencies
for each fund must be reported separately on the current version
of the form. |
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The PWGSC-TPSGC 2481 "Statement
of Option--Leave Without Pay" remains unchanged. |
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5.2 |
PENSION SYSTEMS |
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Effective April 1, 2000, the total
contributions "To date" will be managed daily by the
Contributor System. |
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5.2.1 |
CONTRIBUTOR INQUIRY SYSTEM |
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5.2.1.1 |
PENSION REFORM ENHANCEMENTS |
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The Contributor Inquiry System has
been amended to reflect Fund 1 (PSSA) and Fund 2 (PSPF) information.
The Summary screens will provide the total contributions credited
under both funds. Separate screens have been created to display
the breakdown between Fund 1 and Fund 2. Even though, as stated
above, there will continue to be a single RCAA, PWGSC systems
have been modified to reflect RCA contributions after April
1, 2000, as RCA Fund 2. |
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The following screens have been
created or revised: |
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Screen name |
Acronym |
Status |
Comments |
Contributions Summary |
CON |
Revised |
Contains total contributions
by fund for all funds. |
PSSA Contributions |
CNP |
New |
Provides detailed Fund 1 and
Fund 2 contributions and interest. Linked to Contributions
Summary screen. |
RCA Contributions |
CNR |
New |
Provides detailed Fund 1 and
Fund 2 RCA contributions, if applicable, and interest.
Linked to the Contributions Summary screen. |
SOS Summary |
SOS |
Revised |
Displays all SOS records.
Highlighted SOS records will display payment details. |
SOS Details |
SOD |
New |
Displays the lump sum detail
for Fund 1, Fund 2, RCA 1, RCA 2 and interest attributed
to each. |
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Example: |
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The Contributions Summary (CON)
screen will display the contribution information as follows: |
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CONTRIBUTIONS |
INTEREST TO-DATE |
PSSA Fund 2: |
$ XXXX.XX |
$ XXX.XX |
PSSA Fund 1: |
$ XXXX.XX |
$ XXX.XX |
RCA Fund 2: |
$ XXXX.XX |
$ XXX.XX |
RCA Fund 1: |
$ XXXX.XX |
$ XXX.XX |
GRAND TOTAL: |
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5.2.1.2 |
OTHER SYSTEM ENHANCEMENTS |
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The Entitlement Summary screen (SUM)
will now display the Adjusted Average, the Adjusted RCA Average
and the Adjusted CPP/QPP Average salaries for part-time employees.
This screen will only display information when a SUBMIT for
benefit has been processed. |
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5.2.2 |
PENSION SUPPORT SYSTEM (PSS) |
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5.2.2.1 |
PENSION REFORM ENHANCEMENTS |
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The PSS will automatically calculate
Fund 1 and Fund 2 benefit information. The summary screens will
provide the total benefit credited under both funds. Separate
screens have been created to display the breakdown between Fund
1 and Fund 2. |
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The following screens have been
modified or revised. |
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Screen name |
Acronym |
Status |
Comments |
Pension Calculation Summary |
CAL |
Revised |
Displays total benefits for
Fund 1 and Fund 2 |
Pension Calculation Fund 1 |
CL1 |
New |
Displays Fund 1 information |
Pension Calculation Fund 2 |
CL2 |
New |
Displays Fund 2 information |
Transfer Value Calculation
Summary |
TVC |
Revised |
Displays total value for Fund
1 and Fund 2 |
Transfer Value Calculation
Fund 1 |
TC1 |
New |
Displays Fund 1 values |
Transfer Value Calculation
Fund 2 |
TC2 |
New |
Displays Fund 2 values |
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NOTE: Elections that are in progress
(deductions commenced but not yet finalized by the Superannuation
Directorate) may be included in benefit calculations in the
Elective Service area. A message will be displayed advising
that the election in progress is included as part of the calculation. |
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5.2.3 |
ESTIMATES OF COST SYSTEM |
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5.2.3.1 |
PENSION REFORM ENHANCEMENTS |
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There will be no change in procedures.
Compensations Advisors will not be required to split the period
of estimation as the fund to which the service and contributions
will be credited is determined by the date the election is signed. |
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Lump sum payment information and
monthly instalment costs at the single and the double
rates are provided in the estimates. |
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Estimates that are processed by
the Superannuation Directorate will be displayed on a revised
PWGSC-TPSGC 2057 "Estimate of Cost for Elective Pensionable
Service". Separate estimates will be provided for each
period of service with the appropriate cost either at single
or at double rate. |
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5.2.3.2 |
OTHER SYSTEM ENHANCEMENTS |
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The Estimate of Cost Calculation
Screen (CAL) has been modified to display the Assigned Work
Week (AWW) and Scheduled Work Week (SWW). |
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5.2.4 |
ELECTIONS SYSTEM |
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5.2.4.1 |
PENSION REFORM ENHANCEMENTS |
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When an employee completes an election
on or after April 1, 2000, Compensation Advisors must ensure
that new deduction codes for PSPF at the single or double rate
are used when starting the monthly deductions. |
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Lump sum payments for periods of
elective service must clearly reflect the correct fund and the
breakdown by single and double rate. |
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The PWGSC-TPSGC 2097 "Elective
Service Notice" will now have the SWW and AWW and the monthly
deduction requirement at single and/or double rate. |
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The PWGSC-TPSGC 2092 "Election
to Surrender Benefits" has been revised and should be used
for all surrenders made on or after April 1, 2000. |
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5.2.5 |
PENSION BENEFITS DIVISION SYSTEM |
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5.2.5.1 |
PENSION REFORM ENHANCEMENTS |
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For Public Service Corporations
that have access to the Pension Division System, enhancements
are described below. Public Service Corporations without access
to the Pension Benefits Division System should continue to use
the PWGSC-TPSGC 2055-1 "PBDA Information Request Worksheet--Public
Service Corporations". |
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The following screens have been
created or revised:
Screen name |
Acronym |
Status |
Comments |
Contribution Calculation |
CON |
Revised |
Used to calculate contributions
to be divided. Contributions are now captured quarterly.
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Special Process |
CSP |
New |
Used for part-time employees
and to calculate Fund 1 and Fund 2. |
Fund Information |
CFU |
New |
Provides pension division
information by Fund 1 and Fund 2 . |
Pension Division Request |
CAR |
Revised |
The cohabitation period will
be displayed by Fund 1 and Fund 2 (system generated).
This screen will also display the date on which the employee
reached 35 years of pensionable service, if applicable. |
Service Calculation |
CSR |
Revised |
Displays information by fund.
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Calculation |
CCA |
Revised |
Displays total payment. |
Pension Benefit Request |
CPI |
Revised |
Displays RTA/CFSA/RCMP values. |
Pension Benefit Report |
CP1 |
Revised |
Provides breakdown of contributions
and displays elective service (LWOP/RTA/CFSA/RCMP) and
non-elective service. |
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5.2.5.2 |
OTHER SYSTEM ENHANCEMENTS |
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The Pension Benefits Division System
has been enhanced and now calculates an accurate division calculation
where the employee has part-time service. Such requests should
therefore no longer be sent to the Superannuation Directorate. |
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Where an estimate for pension division
includes RCA salary in excess of the PSSA salary threshold,
the Pension Division System now splits the payment between PSSA,
PSPF and RCA. |
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5.2.6 |
ANNUITANT SYSTEM |
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The Annuitant System is used by
the Superannuation Directorate to issue benefit payments. Although
PSSA and PSPF benefits are managed separately, one blended payment
will be issued.
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6 |
INCOME TAX REPORTING |
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There are no changes to income tax
reporting requirements for pension contributions. The combined
contributions of both funds are to be reported as a single value.
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7 |
MANUALS |
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The following manuals will be updated
to reflect Pension Reform changes:
- Superannuation Administration Manual (SAM)
- Pension Support System Manual (PSS)
- Superannuation Procedures Manual for Public Service Corporations
(PSC)
- Pension Benefits Division System Manual (PBDS)
- Pension Benefits Division Act (PBDA)--Information kit
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8 |
HELP TEXT |
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Element Help (F4) in on-line systems
has been updated to reflect the changes described in this Directive.
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9 |
FORMS |
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The amended forms are available
electronically in the ELF application or may be ordered from
the appropriate Printing Plant.
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10 |
INQUIRIES
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10.1 |
Any request for information regarding
the foregoing should be addressed to your PWGSC Compensation
Services Office. |
R. Jolicoeur
Director General
Compensation Sector
Government Operational Service