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1 |
PURPOSE |
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1.1 |
The purpose of this Bulletin is to remind Compensation Specialists of the end of the two-year transition period for the purpose of lock-in under the Public Service Superannuation Act (PSSA). |
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2 |
POLICY |
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2.1 |
As described in Superannuation Administration Manual (SAM)
Special Bulletin 1996-006 dated July 4, 1996, employees who become PSSA members on or after June 20, 1996 will be locked-in as soon as they have accumulated two years of pensionable service. |
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2.2 |
A locked-in employee is not entitled to a return of pension contributions A locked-in employee may, on termination, opt for a pension benefit (immediate or deferred, depending on the employee's age), or may opt for the Transfer Value payment if less than age 50 at date of termination. |
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2.3 |
Employees who were contributors immediately prior to June 20, 1996, and who have remained contributors continuously since that date are subject to a transitional rule. |
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2.4 |
Transitional Rule |
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2.4.1 |
These employees will be locked-in the earlier of: i) June 20, 1998; or ii) when they reach the previous 45 and 10 threshold (i.e. age 45 and 10 years of pensionable service). |
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2.5 |
Cessation of employment under age 60 because of disability |
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2.5.1 |
Effective from June 20, 1998, the only option available to an employee with 2 or more years of pensionable service to his credit, who ceases to be employed under age 60 because of disability, is an Immediate Annuity. The Cash Termination Allowance (CTA) is no longer available in this situation. |
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2.5.2 |
The CTA will still be available to those employees described in section 4.2.1 of the SAM (i.e. employees with more than 33 years of pensionable service under either the Canadian Forces Superannuation Act [CFSA] or the Royal Canadian Mounted Police Superannuation Act [RCMPSA], etc.). |
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2.6 |
Effective from June 20, 1998, a Return of Contributions (ROC) will be available to the following employees only: i) An employee with less than two years of pensionable service; ii) An employee who terminates voluntarily with less than 2 years of substantially continuous employment, even though the employee may have a total of current and elective service in excess of 2 years (refer to SAM 4.3.6); iii) An employee who is dismissed for misconduct and who has requested an ROC (refer to SAM 4.3.5). |
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2.7 |
Employees who have transferred service under a Reciprocal Transfer Agreement (RTA) |
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2.7.1 |
It is important to note that where an employee has opted for an ROC, and the pensionable service to the employee's credit includes a period of service transferred under an RTA, the Compensation Specialist must forward the "Request for Return of Superannuation Contributions" (PWGSC-TPSGC 2577) to the Superannuation Directorate for processing. |
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2.7.2 |
The contributions transferred under the RTA must be paid to a locked-in retirement vehicle; either to a Registered Retirement Savings Plan (RRSP) to be administered in accordance with the federal Pension Benefits Standards Act (PBSA), to another Registered Pension Plan (RPP), or to a financial institution for the purchase of a life annuity. |
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2.7.3 |
In the same manner as for Transfer Value payments, the "Certification of Lock-in for Purposes of the Public Service Superannuation Act" (PWGSC-TPSGC 2347-18) and the Tax Form T-2151 must be completed and provided to the Superannuation Directorate before the locked-in portion of the ROC can be paid out. |
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2.7.4 |
In these cases, it is also necessary to notify the Pay Office that the PWGSC-TPSGC 2577 has been forwarded to the Superannuation Directorate for payment of the ROC. |
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3 |
INQUIRIES |
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3.1 |
Any request for information regarding the foregoing should be addressed to your Public Works and Government Services Canada (PWGSC) Compensation Services Office. |
