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1993-007-e.html
SUPERANNUATION ADMINISTRATION MANUAL
SPECIAL BULLETIN: 1993-007
Section A
Section B
Section C
Appendix A
Appendix B
September 10, 1993
SUBJECT: |
Changes to the Public Service Superannuation Act (PSSA) Regarding Recovery of Deficiencies for Periods of Leave without Pay (LWOP) |
|
1 |
PURPOSE |
|
1.1 |
The purpose of this Bulletin is to provide Personnel Offices with information on recent changes to the Public Service Superannuation Regulations regarding recovery of deficiencies for periods of LWOP. |
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1.2 |
The changes are effective September 9, 1993. |
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2 |
POLICY |
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2.1 |
In the past, PSSA contributions were required for all periods of authorized LWOP. Effective from September 9, 1993, employees will be given an option NOT TO COUNT their LWOP for PSSA purposes, and deficiencies will not be required for the leave other than for the first three months. |
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2.2 |
It is important to note that Regulations still require LWOP deficiencies to be recovered either in a lump sum within 30 days of return to duty or over a period equal to twice the period of the LWOP (except for on-loan situations). Recovery of LWOP deficiencies must commence as required by the regulations if the contributor has not paid the deficiencies in a lump sum within 30 days of return to duty. Where the contributor has opted not to count the LWOP as pensionable service, the recovery will be made for the first three months of the leave only; if no election is made, recovery will be made for the full period of the leave. |
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2.3 |
It is also important to note that the option not to count LWOP does not extend to contributions required for the Supplementary Death Benefit (SDB) Plan, and for the Disability Insurance (DI) or Long Term Disability (LTD) Plans. Any deficiencies owing for SDB and the above-named insurances must be collected for the full period of the LWOP. |
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2.4 |
For convenience, this Bulletin has been divided into sections: Section A applies to employees who return to duty after September 9, 1993; Section B applies to employees who returned to duty prior to September 9, 1993, and who are now repaying deficiencies; Section C applies to both groups; Appendix A lists the new LWOP codes for users of the Regional Pay System; Appendix B provides a list of questions and answers to help Personnel in providing their employees with information regarding the changes to the recovery of LWOP deficiencies. |
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3 |
RESPONSIBILITY |
|
3.1 |
Personnel Offices are responsible for advising affected employees of these changes. |
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4 |
INQUIRIES |
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4.1 |
Inquiries concerning the content of this bulletin should be directed to Marg Bambrick (819) 956-2058, Adèle Gervais (819) 956-2096, or Judy Thorne (819) 956-2064 of the Advisory Services Group. |
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4.2 |
Questions relating to an individual's eligibility should be directed to Superannuation Branch at (506) 533-5700 for English calls and (506) 533-5767 for French calls. |
Director General
Compensation Directorate
Government Operational Service
Original Signed by
P. Charko |
P. Charko
|
SECTION A: |
EMPLOYEES WHO RETURN TO DUTY ON OR AFTER SEPTEMBER 9, 1993 |
| 1.A |
OPTION FORM AND TIME LIMITS: |
| 1.A.1 |
Employees who commence their LWOP or return to duty on or after September 9, 1993 can opt not to count the LWOP as pensionable at any time from three months after commencement of the leave until three months after return to duty.
| Example: |
LWOP from October 1, 1993, to July 31, 1994.
Option period: any time from January 1, 1994 until October 31, 1994. |
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Note: Employees can complete their option form before they proceed on leave. This will make it easier for Personnel to counsel their employees. However, the option does not take effect until three months after commencement of the leave. Employees should be cautioned not to complete their option too far in advance of the leave. |
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| 1.A.2 |
To take advantage of the option not to count their LWOP, employees must complete an election form DSS-MAS 2480 in accordance with the instructions on the reverse of the form. |
| 1.A.3 |
Employees who return to duty on or after September 9, 1993, who wish to count their LWOP will be requested to complete form DSS-MAS 2481 to indicate that they have been made aware of this new opportunity. |
| 1.A.4 |
If an employee does not complete form DSS-MAS 2480 not to count the LWOP, Superannuation deficiencies will be recovered under the regular recovery provisions. There should be no delay in commencing the recovery pending receipt of either the DSS-MAS 2480 or the DSS-MAS 2481. |
| 1.A.5 |
Employees must be cautioned that an option not to count their LWOP under the current LWOP recovery provisions should be considered to be an IRREVOCABLE OPTION. Where an employee has opted not to count his LWOP as a deficiency recovery, it may be possible to purchase the service under the elective service provisions of the PSSA; see Section C of this Bulletin. |
| 1.A.6 |
An option not to count LWOP cannot be made after an employee has terminated employment. The option must be exercised while the individual is still an "employee" actively at work or on LWOP. |
| 1.A.7 |
There are very limited circumstances where an option not to count LWOP can be revoked. These will be outlined in Chapter 2 of the Superannuation Administration Manual. Superannuation Branch should be contacted in any case where a revocation is being pursued. |
| 2.A |
COLLECTION OF LWOP DEFICIENCIES |
| 2.A.1 |
Where an employee completes an option not to count his LWOP as pensionable, deficiencies for the first three months of the LWOP only will be recovered in the normal manner; that is, over twice the period of the COUNTABLE leave, i.e. over six months. Recovery of deficiencies in SDB and DI/LTD premiums will continue to be made for the full period of the leave in the normal manner. |
| 2.A.2 |
Where the LWOP option was made before the LWOP recoveries commenced, the calculation of the PSSA deficiency performed by the Pay Office should include the first three months of the LWOP only. Recovery of deficiencies will then continue at the same rate until the contributions owing for the first three months of the leave have been collected. |
| 2.A.3 |
Where the option not to count the LWOP is not made in advance of the leave, the Pay Office will calculate the LWOP deficiency for the full period of LWOP and establish a recovery rate over twice the period of the LWOP. If an option is made after the recoveries commence (BUT WITHIN THE THREE MONTH OPTION PERIOD), the deficiency must be recalculated to include the first three months of leave only. There may be some adjustment required to the final payment.
| EXAMPLE: |
Please note, this example is for illustration purposes only, the pay periods and dollar values are estimated only. LWOP Period : April 10, 1993, to May 31, 1995;
Type of leave : single and double rate;
Return to duty: June 1, 1995;
LWOP recovery commenced: July 1, 1995; Total PSSA deficiency: $10,882.49;
Recovery rate: $97.16 per pay period (112 pay periods);
Option not to count the LWOP: August 28, 1995;
Deficiency owing for the first three months: $727.72;
LWOP recovered to option date: $97.16 x 5 pay periods = $485.80;
Deficiency owing for three months = $727.72 - $485.80 = $241.92;
New recovery schedule: $97.16 for two more pay periods and a final payment of $47.30. Note: This method may result in the deficiencies being collected over less than the maximum six month recovery period, but will require less intervention with the employee's pay cheque. |
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| 2.A.4 |
An employee may request that the balance of the recovery owing after the option date be spread over the maximum (six month) repayment period. Although requests of this nature would require an adjustment to the monthly deficiency deduction, they should be accommodated where practical. |
| 2.A.5 |
If deficiencies covering beyond the first three months have been collected, a refund of the excess must be made to the employee. |
| 3.A |
UPDATING THE CONTRIBUTOR SYSTEM AND SUPERANNUATION FILE |
| 3.A.1 |
For employees on the Regional Pay System (RPS): When an employee completes an option not to count his LWOP as pensionable, Personnel must change the LWOP code on the Contributor System to a non-pensionable leave code. These codes are identified in Appendix A of this Bulletin. The "from" date of the non-pensionable period will extend from three months after the LWOP commenced until return to duty. The LWOP code is amended to a "1" for single rate leave not counted and "2" for double rate leave not counted via a PAC-12 A (STA).
| Example: |
LWOP April 10, 1993, to May 31, 1995
Return to duty: June 1, 1995
Option not to count the LWOP as pensionable: August 1, 1995
NON-PENSIONABLE period reported to the Contributor System July 10, 1993, to May 31, 1995 |
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| 3.A.2 |
A copy of the election form DSS-MAS 2480 must be provided to Superannuation Branch for their records. |
| 3.A.3 |
For employees not on the RPS: The Personnel Office must provide a copy of the election form DSS-MAS 2480 to Superannuation Branch, who will amend the Contributor System to reflect the employee's non-pensionable service. |
| 4.A |
EMPLOYEES ON LOAN |
| 4.A.1 |
Employees who proceed on loan and are required to pay their PSSA contributions in advance of the LWOP are also eligible not to count their LWOP as pensionable. |
| 4.A.2 |
Where such an employee completes his option in advance of the LWOP, the contributions required for the first three months of the LWOP only should be forwarded directly to Superannuation Branch. |
| 4.A.3 |
Where an employee on loan returns to duty after September 9, 1993, and opts not to count his LWOP as pensionable, only the first three months of the LWOP is countable. The advance contributions in excess of the first three months of the LWOP will be refunded to the employee. Any refund of contributions is taxable at source and is not transferable to an RRSP. |
| 4.A.4 |
Employees who opt not to count their leave must be advised that the option is in respect of PSSA current contributions only. SDB premiums and arrears payments for past service must continue to be forwarded directly to Superannuation Branch. |
| 5.A |
DUAL EMPLOYMENT |
| 5.A.1 |
Sometimes employees who are on LWOP from one position (e.g. relocation of spouse) may be employed elsewhere as a term while the LWOP is still in effect. For administrative reasons (i.e. short terms, lack of time to provide data from previous pay offices etc.), recovery of LWOP deficiencies are not being made from the term salary, although current contributions are deducted from the term salary. The deficiencies for the full period of the LWOP, excluding the periods of term employment, are reconciled and recovered when the employee returns to his original position, or the LWOP ends (e.g. acceptance of an indeterminate position). |
| 5.A.2 |
The opportunity to elect not to count LWOP is complicated by this situation. To minimize some of the administrative difficulties involved in these dual employment cases, employees in this situation may wait until the end of their LWOP to complete an option not to count their leave. As with any other employee, the individual must make the option while employed or on LWOP, the option cannot be made after termination of employment. |
| 5.A.3 |
The calculation for the non-pensionable LWOP can be somewhat complex. The fist three month period of LWOP following each period of term employment must be counted (at single rate). |
| 5.A.4 |
When the employee completes the option not to count the LWOP, an option must be made in respect of each period of the leave. The employee must clearly indicate the period not counted, since any period of LWOP not specifically mentioned on the option form will be to the employee's credit and appropriate recoveries will be made for the service. |
| 5.A.5 |
If the employee opts NOT TO COUNT the LWOP as pensionable, the non-pensionable LWOP is calculated as follows.
| Exemple: |
LWOP from February 5, 1994, to July 17, 1997 |
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February 5, 1994, to March 31, 1994 |
Single rate/countable |
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April 1, 1994, to July 21, 1994 |
RETURNED TO DUTY AS A TERM |
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July 22, 1994, to October 21, 1994 |
Single rate/countable |
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October 22, 1994, to February 21, 1995 |
non-pensionable |
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February 22, 1995, to March 31, 1995 |
RETURNED TO DUTY AS A TERM |
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April 1, 1995, to June 30, 1995 |
Single rate/countable |
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July 1, 1995, to September 30, 1995 |
RETURNED TO DUTY AS A TERM |
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October 1, 1995, to December 31, 1995 |
Single rate/countable |
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January 1, 1996, to February 28, 1996 |
non-pensionable |
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March 1, 1996, to November 30, 1996 |
RETURNED TO DUTY AS A TERM |
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December 1, 1996, to February 28, 1997 |
Single rate/countable |
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March 1, 1997, to July 17 1997 |
non-pensionable |
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July 18, 1997 |
RETURNED TO POSITION/LWOP TERMINATED |
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Contributions would be required, at single rate, for each three month period after the term employment ended. |
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| 5.A.6 |
The option form should clearly indicate each separate period that the employee is opting not to count. |
| 5.A.7 |
If the employee opts before the LWOP commences, and becomes re-employed in a dual employment situation, the option is valid only for the period of LWOP prior to the re-employment. If the employee does not wish to count subsequent periods of LWOP, a new option would be required, (usually upon final return to duty when the LWOP ends). |
|
SECTION B: |
EMPLOYEES WHO RETURNED TO DUTY BEFORE SEPTEMBER 9, 1993 |
| 1.B |
OPTION FORM AND TIME LIMITS: |
| 1.B.1 |
For employees who return to duty before September 9, 1993, who are now repaying LWOP deficiencies, the option not to count the LWOP as pensionable can be made at any time before the deficiencies are paid in full.
| Example: |
LWOP from October 10, 1991, to April 15, 1993.
LWOP recovery commenced May 1993 to continue until approximately June 1996.
Employee can opt not to count the LWOP at any time from September 9, 1993, until June 1996.NOTE: Employees must be made aware that contributions already deducted WILL NOT BE REFUNDED. The deficiencies recovered to the end of the pay period in which the option is made will be applied to purchase a portion of the LWOP, as described in Section 5B. |
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| 1.B.2 |
Employees must be cautioned that an option not to count their LWOP under the current LWOP recovery provisions is an IRREVOCABLE OPTION. Where an employee has opted not to count his LWOP as a deficiency recovery, it may be possible to purchase the service under the elective service provisions of the PSSA. (See Section 2C of this Bulletin.) |
| 1.B.3 |
To take advantage of the option not to count their LWOP, employees must complete the election form DSS-MAS 2480 in accordance with the instructions on the reverse of the form. |
| 1.B.4 |
An option not to count LWOP cannot be made after an employee has terminated employment. The option must be completed while the individual is still an "employee" either actively at work or on LWOP. |
| 1.B.5 |
There are very limited circumstances where an option not to count LWOP can be revoked. These will be outlined in Chapter 2 of the Superannuation Administration Manual. Superannuation Branch should be contacted in any case where a revocation is being pursued. |
| 2.B |
COLLECTION OF LWOP DEFICIENCIES |
| 2.B.1 |
Where the option is completed by an employee who returned to duty prior to September 9, 1993, who is now repaying deficiencies, the collection of PSSA deficiencies will cease effective from the pay period following the date the employee signed the election form. |
| 2.B.2 |
In the above situation, the Pay Office must ensure that the recovery for at least the first three months has been made. None of the deficiencies recovered up to the end of the pay period when the option was made are to be refunded. (Note: deficiencies collected AFTER that pay period may, however, be refunded as long as they are not deficiencies in respect of the first three months of the leave.) |
| 2.B.3 |
Recovery of deficiencies in SDB and DI/LTD premiums will continue to be made for the full period of the leave in the normal manner. |
| 3.B |
UPDATING THE CONTRIBUTOR SYSTEM AND SUPERANNUATION FILE |
| 3.B.1 |
For employees on the Regional Pay System (RPS): When an employee completes an option not to count his LWOP as pensionable, Personnel must change the LWOP code on the Contributor System to a non-pensionable leave code. These codes are identified in Appendix A of this Bulletin. |
| 3.B.2 |
Where the employee returned to duty prior to September 9, 1993, and opted not to pay the balance of the LWOP, the "from" date of the non-pensionable period will extend from the end date of the period purchased until return to duty. The LWOP code is amended via a PAC-12 A (STA). The reason code for the LWOP is "1" for single rate leave not counted and "2" for double rate leave not counted.
| Example: |
LWOP October 15, 1991, to April 30, 1993
Return to duty: May 1, 1993
Option not to count the balance of the LWOP: September 15, 1994
Period purchased by contributions paid to option date: October 15, 1991, to June 12, 1992
Period reported to the Contributor System as non-pensionable: June 13, 1992, to April 30, 1993 |
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| 3.B.3 |
A copy of the election form DSS-MAS 2480, as well as the output from the System indicating the service purchased by deficiencies collected must be provided to Superannuation Branch for their records. |
| 3.B.4 |
For employees not on the RPS: The Personnel Office must provide a copy of the election form DSS-MAS 2480, and the form letter indicating the service purchased by the recoveries paid, where applicable, to Superannuation Branch, who will amend the Contributor System to reflect the proper portion of non-pensionable service. |
| 4.B |
EMPLOYEES ON LOAN |
| 4.B.1 |
Employees who had been on loan and who were required to pay their PSSA contributions in advance of the LWOP are also eligible not to count their LWOP as pensionable |
| 4.B.2 |
Where the employee returned to duty prior to September 9, 1993, the contributions paid to the date of the election will be used to purchase a period of the leave. In this case, none of the contributions paid in advance of the LWOP are to be refunded to the employee. Where the contributions required in advance were not paid, Personnel must ensure that recovery for the first three months of the leave is made, over a three month period. Where some, but not all of the contributions required in advance were paid, the contributions paid will be used to purchase a portion of the LWOP, as described in 5.B. |
| 4.B.3 |
Recovery of SDB, DI and LTD premiums for the full period of the leave are required. |
| 5.B |
SERVICE PURCHASED BY DEFICIENCIES RECOVERED FROM EMPLOYEES WHO RETURNED TO DUTY PRIOR TO SEPTEMBER 9, 1993 |
| 5.B.1 |
Departments and Agencies will be provided with an automated computer program and instructions to calculate the period of service purchased by contributions paid up to the date of completion of the DSS-MAS 2480. The Pay Office must confirm the total PSSA deficiencies recovered from the date of commencement of the recovery to the end of the pay period in which the option was made. |
| 5.B.2 |
When the period of service purchased has been determined, the System output will indicate the amount of deficiency collected and the period of service covered by the contributions. A copy of this form should be provided to the employee and to Superannuation Branch, and the Contributor System updated as outlined in Section 3.B. In every case, Personnel must ensure that contributions recovered cover at least the first three months of the leave. |
| 5.B.3 |
For employees who have periods of dual employment during their LWOP, the deficiencies collected up to the end of the pay period in which the option is made will be applied to purchase the LWOP (excluding any term employment while the individual was a PSSA contributor.) The contributions are applied to the first three months of the LWOP and then to the three months following each period of term employment. Any balance of deficiencies collected is then applied to the portion of LWOP from the furthest in point of time. |
|
SECTION C: |
APPLICABLE TO BOTH GROUPS |
| 1.C |
PENSION ADJUSTMENT (PA) |
| 1.C.1 |
When an employee is on LWOP, a Pension Adjustment is reported for the period of the leave. This practice will continue unless the employee opts in advance of the leave not to count the LWOP. |
| 1.C.2 |
Where an option not to count LWOP as pensionable has been made before the LWOP commences, Personnel should ensure that the LWOP in excess of three months is excluded when reporting information to the pay system for the PA calculation. |
| 1.C.3 |
Where an employee opts not to count his LWOP upon return to duty, there will be no adjustment made to the PA. Employees should be made aware that a PA will be reported for the LWOP even if the employee later opts not to count the leave. |
| 2.C |
PAST SERVICE ELECTIONS FOR PERIODS OF LWOP |
| 2.C.1 |
An employee who has opted not to count his LWOP under the deficiency recovery procedures, may elect for the service under the elective service provisions of the PSSA. |
| 2.C.2 |
A past service election for LWOP service will follow the regular elective service procedures. That is, the employee must complete the DSS-MAS 2006 in accordance with the normal procedures for making a past service election. |
| 2.C.3 |
The cost of prior LWOP is based on the salary at date of election. That is, regardless of the date of election, the cost is based on the penalty costing provisions. |
| 2.C.4 |
The employee is required to pass a medical, again, the same conditions that apply to penalty elections. Also, the election must be forwarded to the appropriate Paying Office or Superannuation Branch within 30 days of signing. |
| 2.C.5 |
The contribution rate for the LWOP service is based on the rate that would have been applicable for the LWOP. For example, a past service election for maternity LWOP would be at single rate, while an election for relocation of spouse leave (after the first three months) would be at double rate. |
| 2.C.6 |
An election for LWOP, like any other past service election, can be made only while the individual is still a PSSA contributor. Although the option not to count the LWOP (via the DSS-MAS 2480) can be made while the employee is on LWOP, a past service election (via the DSS-MAS 2006) can only be made when the individual is actively employed and a contributor. |
| 2.C.7 |
The option not to count LWOP as pensionable service under the deficiency recovery procedures applies to the full period of the LWOP. However, where the employee subsequently elects for the service under the elective service provisions, the election, like any other past service election, can be made for partial periods. |
| 2.C.8 |
An election for a partial period of LWOP must be made for the period most recent in point of time. An employee could not choose to pay for an earlier period of service at single rate instead of a later period of leave at double rate.
|
LWOP: |
March 15, 1994, to March 14, 1995 |
Sick LWOP single rate |
| |
|
March 15, 1995, to June 26, 1996 |
Relocation of spouse leave |
|
RETURNED TO DUTY: |
June 27, 1996 |
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OPTED NOT TO COUNT THE LWOP: |
15.08.1996 |
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LWOP COUNTABLE: |
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FIRST THREE MONTHS |
March 15, 1994 to June 14, 1994 |
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POSSIBLE ELECTIVE SERVICE |
June 15, 1994 to June 26, 1996 |
If the employee wishes to elect for only one year of the LWOP under the elective service provisions, the election would cover the period from June 27, 1995, to June 26, 1996, even though the service is at double rate and would be more expensive than the earlier single rate period. |
| 3.C |
EMPLOYEES WHO RETURN TO DUTY AS NON-CONTRIBUTORS |
| 3.C.1 |
Where an employee, who had been on LWOP from a full-time position has returned to duty as a non-contributor, (e.g. as a part-time employee), recovery of the deficiencies for the full-time LWOP are usually deferred until the employee resumes full-time employment |
| 3.C.2 |
An employee who has returned to duty as a non-contributor prior to 09-09-1993 can, once contributory status resumes, opt at any time before the deficiencies are paid in full not to count the unpaid balance of any LWOP deficiency. |
| 3.C.3 |
An employee who returns to duty as a non-contributor on or after 09-09-1993 can, within three months of recommencing PSSA contributions, (e.g. when the employee resumes full-time employment) complete an option not to count the LWOP as pensionable. |
| Leave Without Pay and the Public Service Superannuation Act. |
APPENDIX B |
| 1. |
DO PENSION CONTRIBUTIONS HAVE TO BE PAID FOR ALL PERIODS OF LEAVE WITHOUT PAY (LWOP)? Prior to the recent amendments to the Public Service Superannuation Regulations, all authorized Leave Without Pay (LWOP) was pensionable, and PSSA contributions were required for the full period of the leave. |
| 2. |
HOW DOES PENSION REFORM CHANGE THE LWOP PROVISIONS? With the changes to the PSS Regulations, employees will now be able to choose not to count LWOP beyond the first three months as pensionable, and PSSA contributions will not be required for the leave in excess of three months. |
| 3. |
HOW DOES THE PROVISION WORK? An employee who is proceeding on or returning from LWOP on or after September 9, 1993 can complete an Option Form DSS-MAS 2480 not to count his LWOP as pensionable. PSSA contributions will not be recovered for the period of leave in excess of three months. |
| 4. |
WHEN DOES THIS OPTION HAVE TO BE COMPLETED? The option must be completed no later than three months after return to duty following a period of LWOP. The option may be completed prior to commencement of the leave, but will not take effect until three months after commencement of the leave. (Because the first three months of the leave must be counted.) |
| 5. |
WHERE SHOULD THE OPTION FORM BE SENT? The option form should be completed and sent to Personnel within the time limits specified on the reverse of the form. A copy of the form will also be sent by Personnel to Superannuation Branch. |
| 6. |
DOES THE OPTION APPLY TO THE FULL PERIOD OF LWOP? The first three months of any period of LWOP must be counted as pensionable and contributions must be recovered for the period. |
| 7. |
CAN AN EMPLOYEE OPT NOT TO COUNT ONLY A PORTION OF THE LWOP, AND PAY FOR THE BALANCE? No. The option not to count LWOP as pensionable must be made for the FULL period of the LWOP (except for the first three months as noted above.) |
| 8. |
WHAT HAPPENS IF AN EMPLOYEE DOES NOT COMPLETE AN OPTION? If no option is completed, LWOP deficiencies will be recovered from the employee's salary upon return to duty, under the current LWOP provisions. |
| 9. |
CAN EMPLOYEES WHO ARE NOW REPAYING LWOP DEFICIENCIES TAKE ADVANTAGE OF THIS NEW OPTION? Yes. An employee who has returned to duty and is repaying LWOP deficiencies can opt not to count the unpaid balance of the LWOP. The first three months of the LWOP are countable, and shortages must be recovered. Also, it must be noted that the option is in respect of ONLY the period not yet paid. The option cannot be made retroactive. |
| 10. |
WHAT IS THE OPTION PERIOD FOR EMPLOYEES WHO WERE REPAYING DEFICIENCIES AT THE DATE THE CHANGE TO THE REGULATIONS BECAME EFFECTIVE? Employees who had returned to duty and were repaying LWOP deficiencies as of the effective date of the change to the Regulations, may at any time before the deficiencies are paid in full elect not to count the balance of the leave. |
| 11. |
WHAT HAPPENS TO THE CONTRIBUTIONS THAT HAVE BEEN DEDUCTED UP TO THE DATE OF OPTION? Contributions that were deducted up to the date of option will be applied to purchase a portion of the service. It is important to note that there will be no refund of contributions paid towards the deficiencies. |
| 12. |
HOW WILL THE EMPLOYEE KNOW HOW MUCH SERVICE HAS BEEN PURCHASED BY THE CONTRIBUTIONS RECOVERED PRIOR TO THE OPTION NOT TO COUNT THE BALANCE OF THE LEAVE? A notice will be issued to the employee to advise him of the service purchased by the deficiencies recovered to date. |
| 13. |
WHEN DOES THE RECOVERY OF THE DEFICIENCY CEASE FOR EMPLOYEES WHO OPT NOT TO COUNT THE BALANCE OF THE LEAVE? The recovery of the deficiencies will cease from the pay period following the date of option. Any deficiencies recovered after the pay period during which the option is made will be refunded, providing the deficiencies owing for the first three months have been paid. |
| 14. |
WHAT HAPPENS IF THE EMPLOYEE DOES NOT RETURN TO DUTY AFTER THE PERIOD OF LWOP? Where an employee terminates (or dies) before an option not to count the LWOP has been completed, the period of LWOP is to the employee's credit, and recovery of the LWOP deficiencies must be made. Of course, if on termination the employee receives a return of PSSA contributions, there is no recovery of the PSSA deficiencies. Recovery of SDB and DI/LTD premiums must however be made. |
| 15. |
ARE THERE ANY CHANGES TO THE LWOP RECOVERY RATES? No. The contribution rate for LWOP recoveries has not changed. The types of LWOP at single or double rate are outlined in the Superannuation Administration Manual, Chapter 2. |
| 16. |
ARE THERE ANY CHANGES TO THE RECOVERY PERIODS? No. Where no option has been made not to count the LWOP as pensionable, recovery of deficiencies will continue to be made over (generally) a period equal to twice the period of the LWOP. The LWOP recovery methods are also outlined in the Superannuation Administration Manual, Chapter 2. |
| 17. |
WHAT HAPPENS TO EMPLOYEES WHO ARE ON LWOP WHEN THE CHANGES TAKE EFFECT? These employees will be permitted to opt not to count the LWOP within three months of return to duty. Again contributions must be recovered for the first three months of the LWOP. |
| 18. |
HOW DO THESE CHANGES AFFECT SUPPLEMENTARY DEATH BENEFIT COVERAGE? Supplementary Death Benefit coverage remains in effect throughout the period of LWOP, and deficiencies must be recovered for all periods of leave. |
| 19. |
HOW DO THE CHANGES AFFECT OTHER INSURANCE COVERAGES, E.G. DISABILITY INSURANCE? The changes to the recovery of LWOP deficiencies for PSSA purposes do not affect the LWOP recovery provisions for the Insurance Plans. |
| 20. |
CAN AN EMPLOYEE WHO HAS OPTED NOT TO COUNT HIS LWOP LATER CHOOSE TO COUNT THE LWOP AS PENSIONABLE? Yes. An employee who has opted not to count his LWOP as pensionable can choose to count the LWOP under the elective service provisions. All the requirements for making a valid election must, of course, be met. |
| 21. |
HOW LONG MUST AN EMPLOYEE WAIT TO ELECT FOR THE SERVICE UNDER THE ELECTIVE SERVICE PROVISIONS? An employee can elect for the LWOP as elective service at any time after he opts not to count the LWOP as a current deficiency, (providing the employee is actively employed or a contributor at that time). All the requirements for making a past service election must be met. |
| 22. |
WHAT ARE THE ADVANTAGES OF COSTING THE SERVICE UNDER THE ELECTIVE SERVICE PROVISIONS? The monthly contributions would normally be less than the monthly contributions that would be recovered under the LWOP deficiency provisions. Contributions would be spread over the same period as elective service costing, (65 minus age to a minimum of 20 years). The monthly payments are life insured. Under the elective service provisions, the contributor can elect for only a portion of the LWOP if he or she chooses. The portion elected for would be the period most recent in point of time. |
| 23. |
WHAT IS THE TAX STATUS OF THE REPAYMENT? The Tax status is the same as for any other elective service; that is for post 1989 LWOP the contributions are fully tax deductible; for pre 1990 LWOP the deduction is limited to the amounts specified in Services Pay Directive No. 1992-008 (04). LWOP recovered as a deficiency is also tax deductible according to the limits specified above. However, LWOP recoveries are indicated on the T4 together with current PSSA contributions. Revenue Canada does not normally request a breakdown of the recovery as they do for past service elections. |
| 24. |
WHAT ARE THE DISADVANTAGES OF COUNTING THE SERVICE UNDER THE ELECTIVE SERVICE PROVISIONS? The total cost of the service would normally be greater because the cost will be based on salary at election date plus interest. The employee must pass a medical examination. In addition, all of the election requirements; e.g. proper completion and forwarding of election form, must be met. It should also be noted that an election can only be made while the individual is employed, so if an employee opts not to count the LWOP and terminates before a valid election can be made, the service cannot be counted. |
| 25. |
WHAT HAPPENS IF THE EMPLOYEE OPTS NOT TO COUNT THE LWOP, AND WISHES TO CHANGE HIS OPTION? The option not to count LWOP should be treated as an irrevocable option. If an employee has made a valid option not to count LWOP as pensionable, in most cases the only way the service can be credited to the employee is by means of the elective service process. |
| 26. |
HOW DOES OPTIONAL LWOP AFFECT THE PENSION ADJUSTMENT (PA)? If an employee completes an option not to count the LWOP prior to the commencement of the leave, no PA will be reported for the LWOP beyond the first three months. In all other cases, the Pension Adjustment will continue to be reported while the employee is on LWOP. If the employee opts not to count the LWOP, the PAs reported for the LWOP cannot be cancelled. The reporting of the PA has the effect of reducing the employee's RRSP "room" for the year in which the LWOP occurred. However, if a PA has been reported during the period of the leave, and the employee later elects for the service as a past service election, at time of election, there will be no further decrease in the employee's RRSP "room" as a result of the election. |
| 27. |
HOW DOES OPTIONAL LWOP AFFECT EMPLOYEES WHO ARE ON LOAN? Employees on loan will also have an option not to count their LWOP. If the option is made in advance of the leave, contributions for the first three months of the leave are required in advance. (Advance contributions are still required for SDB for the full period of the leave, payable quarterly, semi-annually or annually in advance.) If the option is made on return to duty, and the employee returned to duty after the effective date of the changes, any contributions remitted while on loan will be refunded to the employee, except for the contributions required for the first three months of the leave. If the option is made on return to duty, and the employee returned to duty before the effective date of the changes, any contributions remitted while on loan will be applied to purchase a portion of the on loan period. Contributions are required for the first three months, and if the contributions remitted do not cover at least the first three months, recovery of those deficiencies is required. |
| 28. |
EMPLOYEES WHO HAVE RETURNED TO DUTY AS NON-CONTRIBUTORS? Sometimes an employee will return from a period of LWOP in a non-contributory position, e.g. as a part-time employee. In this case, the employee will have an opportunity to opt not to count the LWOP once he resumes contributory status. Where the employee had returned to duty prior to CIF, the option can be made at any time, after the employee again becomes a contributor and before the deficiencies are paid in full. Where the employee returns after CIF, the employee will have three months after PSSA contributions recommence to complete an option not to count the LWOP. In either case, deficiencies for the first three months of the leave, and for all of the outstanding SDB or DI/LTD deficiencies must be recovered when the employee recommences PSSA contributions on a current basis. |
| REASON FOR LWOP |
REASON CODE |
OPTION CODE |
| Training, Instruction, Educational |
B |
SINGLE (1) |
| Illness, Disability |
C |
SINGLE (1) |
| Serving in Forces (not a CFSA member) |
D |
SINGLE (1) |
Serving with Royal Commission
Board, Agency, outside PS |
E |
SINGLE (1) |
On loan to any organization,
Government, etc. to advantage of
Department (Except Union or
Credit-Union) |
7 |
SINGLE (1) |
On loan to an international
organization (not to advantage
of Department) |
F |
DOUBLE (2) |
On loan to Government of another
country not at request of Government
or to advantage of Department |
G |
DOUBLE (2) |
| Full time paid official of Union |
H |
DOUBLE (2) |
| Full time paid official of a Credit Union |
J |
DOUBLE (2) |
| Maternity Leave |
K |
SINGLE (1) |
| Other Reasons (not covered by a code) |
L |
DOUBLE (2) |
Paternity Leave (within first 52
weeks of child's birth) |
R |
SINGLE (1) |
| Paternity leave, beyond 52 weeks |
3 |
DOUBLE (2) |
Adoption leave (within first 52
weeks of adoption) |
S |
SINGLE (1) |
| Adoption leave, beyond 52 weeks |
4 |
DOUBLE (2) |
Leave for personal needs, not to
exceed 3 months |
T |
SINGLE (1) |
Care and Nurturing (within 52
weeks of child's birth) |
5 |
SIMPLE (1) |
| Care and Nurturing, after 52 weeks |
U |
DOUBLE (2) |
| Relocation of spouse |
V |
DOUBLE (2) |
| Self funded leave |
6 |
DOUBLE (2) |
| Off-duty status |
8 |
DOUBLE (2) |
| NOTE 1: |
The first three months of ANY TYPE of LWOP (which occurred after May 22, 1991) is at single rate. Where "double" is shown, the rate applies only to the leave after the first three months. |
| NOTE 2: |
Where the employee opts not to count the LWOP as pensionable, on the Regional Pay System the "reason code" for the non-countable portion of the leave would be "1" for a single rate type of leave and "2" for a double rate type of leave. |
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