|
1 |
PURPOSE |
|
1.1 |
The purpose of this bulletin is to provide Public Service Corporations (both those serviced by the Regional Pay System and those not serviced by the Regional Pay System) with information regarding the EMPLOYER contributions required under the Public Service Superannuation Act (PSSA) and the Retirement Compensation Arrangement (RCA). This bulletin also provides details regarding the manner and time of remitting the contributions to the Superannuation Directorate. |
| |
2 |
POLICY PSSA contributions |
| |
2.1 |
The EMPLOYER contribution rate under the PSSA is equal to the "single rate" contributions paid by employees for: current service; single rate types of Leave Without Pay (LWOP) as described in the Superannuation Administration Manual Section 2.6.3; and past service elections for service which requires a single rate of contributions. The Public Service Corporation is required to match LWOP or election payments for single rate service whether the contributions are paid in a lump sum or by monthly instalments. Public Service Corporations do not match PSSA contributions where the employee is paying LWOP deficiencies or past service arrears at the "double rate". RCA contributions |
| |
2.2 |
The EMPLOYER contribution for the RCA has been established effective from January 1, 1996 as follows: For current contributions, "single rate" LWOP, and "single rate" past service, the Employer rate is 7 TIMES the employee contribution. For "double rate" LWOP and "double rate" past service the Employer rate is 3 TIMES the contributions made by the employee. |
| |
2.3 |
The EMPLOYER contribution rates for the RCA in effect from April 1, 1995 to December 31, 1995 were as follows: For current contributions, "single rate" LWOP and "single rate" past service, the Employer rate was 4.3 TIMES the employee contribution. For "double rate" LWOP and "double rate" past service, the Employer rate was 1.65 TIMES the contributions made by the employee. Note: For past service elections and for LWOP recoveries in respect of RCA contributions, the Employer contribution rate is the rate in effect when the contributions are remitted, NOT the rate that was in effect at the time the service occurred. Lump sum payments |
| |
2.4 |
When employees make lump sum payments for LWOP deficiencies or for past service elections, the Public Service Corporation is responsible to match the contributions. The Corporation is notified by means of a monthly listing sent by the Superannuation Directorate. This listing identifies the employee and the "type" of payment made. Determination of "single rate" and "double rate" past service |
| |
2.5 |
The "Elective Service Notice" (PWGSC-TPSGC 2097) does not specify whether past service is "single rate" or "double rate". However, this can be determined by the "type" of service indicated. Note: The Superannuation Administration Manual Chapter 3.3 describes all types of service in greater detail. |
| |
2.6 |
For elective service purposes, the following are examples of "single rate" types of service:
| a) |
any period of prior full-time or part-time (post December 31, 1980) Public Service, (excluding elective periods of double rate Leave Without Pay), |
| b) |
any period of service with any board, commission, corporation or portion of the Public Service of Canada, |
| c) |
any period of prior service while subject to the Canadian Forces Superannuation Act or the Royal Canadian Mounted Police Superannuation Act. |
|
|
2.7 |
For elective service purposes, the following are examples of "double rate" types of service:
| a) |
elective periods of Public Service double rate Leave Without Pay, |
| b) |
any continuous period of full-time service of six months or more in the Canadian Forces where the employee was not subject to the Canadian Forces Superannuation Act, |
| c) |
any period of pensionable employment immediately prior to becoming employed in the Public Service. |
If the Corporation cannot determine from the "Elective Service Notice" whether the service is single or double rate, the Personnel Office should refer to the Superannuation Administration Manual (SAM) Chapter 3.3. The attached example of the Elective Service Notice (PWGSC-TPSGC 2097) illustrates different "types" of elective service and the contribution rate normally charged for the service. |
| |
2.8 |
It is important to note that when an employee elects for past Public Service for which he had previously received a Return of Superannuation Contributions, the Corporation must match the elective contributions even though the current contributions may have been matched as the service occurred. Supplementary Death Benefit Contributions |
| |
2.9 |
For those Public Service Corporations who are participants in the Supplementary Death Benefit Plan, the employer contribution rate is $0.01 for every $250.00 of the basic benefit of each participant who is employed by the Public Service Corporation at any time during a given month. Terminated Employees |
| |
2.10 |
Public Service Corporations must also match contributions for terminated employees when pension deficiencies or past service arrears are deducted from termination related payments. These include payments of final salary, unused leave, severance pay, and retiring allowances. |
| |
2.11 |
The Public Service Corporation is not required to match lump sum payments made directly to Superannuation Directorate after the employee has terminated. LWOP deficiencies or past service arrears collected from an employee's pension are not matched by the Corporation. |
| |
3 |
PROCEDURES |
| |
3.1 |
When RCA Contributions are remitted to the Accounting Section of the Superannuation Directorate, they must be identified separately from PSSA contributions. |
| |
3.2 |
Both the employee and employer contributions under the PSSA, the SDB Plan, and the RCA are to be remitted on a monthly basis and must be received at the Accounting Section of Superannuation Directorate on or before the 15th of the following month. |
| |
3.3 |
Following is an example of the Employer matching contributions required under the RCA. Employer Pension Contributions: Note: Examples cover a full year (1996). Employee's salary: $120,000 Current Contributions PSSA contributions: $98,600 x 7.5% less CPP/QPP $7,395.00 less 893.20 = $6,501.80 RCA Contributions: $120,000 - $98,600 x 7.5% = $1,605.00 Matching required by Corporation:
PSSA : $6,501.80 x 1 = $6,501.80
RCA: $1605.00 x 7 = $11,235.00 Total matching required = $13,470.75 Double Rate LWOP PSSA contributions : $98,600 x 7.5% less CPP/QPP $7,395.00 less 893.20 = $6,501.80
$6,501.80 x 2 = $13,003.60 RCA contributions: $120,000 - $98,600.00 x 7.5% = $1,605.00
$1,605.00 x 2 = $3,210.00 Matching required by Corporation: RCA: $3,210.00 x 3 = $9,630.00 Note: In the case of double rate LWOP, the PSSA contributions are not matched by the Employer. |
| |
4 |
INQUIRIES |
|
4.1 |
Specific inquiries relating to accounting procedures may be directed to the Superannuation Directorate Accounting Section at (506) 533-5766. |
| |
4.2 |
Any request for information regarding the foregoing should be addressed to your PWGSC Client Services Centre. |
