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1 |
PURPOSE |
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1.1 |
The purpose of this Bulletin is to introduce and/or clarify a number of administrative issues related to the administration of the Public Service Superannuation Act (PSSA). |
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2 |
POLICY / PROCEDURES |
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2.1 |
"Your Pension Plan" |
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2.1.1 |
The Treasury Board booklet, "Your Pension Plan" is now available on the Internet at the following address: http://www.info.tbs-sct.gc.ca/SIGS/html/TB_836/text/files/YPP.e.html for the English version or YPP.f.html for the French version. The Internet version contains all of the amendments to the PSSA up to the end of 1997. Hard copy versions of the booklets are not available at this time. A Special Bulletin will be issued at a later date advising when the hard copy versions will be made available. |
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2.2 |
Past Service Elections Tax Deductibility of Pension Contributions |
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2.2.1 |
Services
Pay Directive 1992-008(04) dated February 26, 1992, outlines the tax
deductibility limits on past service contributions. Compensation Specialists
should be reminded that the deductibility is:
i) Service while not a contributor, $3,500.00 per year plus current service contributions. The total deductibility over a lifetime for "while not" service is equal to $3,500.00 multiplied by the number of years or part years purchased. This limit is described in the General Income Tax Guide. It is the employee's responsibility to monitor this when filing his Tax Return. The full elective service arrears continue to be reported on the T4. ii) Service while a contributor, $3,500.00 per year minus current service contributions and other elective service. iii) Past service arrears contributions for service which occurred after December 31, 1989, are fully tax deductible. Receipt of Elections |
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2.2.2 |
As outlined in
Special Bulletin 1997-001 dated January 24, 1997, employing departments are responsible for the receipt of elections on behalf of the Minister of Public Works and Government Services Canada (PWGSC). |
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2.2.3 |
It is important to note that the "Date of Receipt" field must be completed on the PWGSC-TPSGC 2006, "Election Form for Elective Pensionable Service" on the actual day the election was received. A date stamp or hand written entry may be used. Periodic Registered Retirement Saving Plan (RRSP) Transfers |
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2.2.4 |
Cash payments towards the cost of a past service election, including an RRSP transfer, may continue to be made, at any time, to pay the full or partial cost of an election. |
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2.2.5 |
Effective January 1, 1998, the Superannuation Directorate no longer accepts periodic RRSP transfers for the payment of monthly installments on a past service election. However, the Superannuation Directorate will continue to accept the periodic transfer of RRSP funds for employees who are presently using this payment method. |
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2.3 |
Current Service - Qualifying Period |
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2.3.1 |
"As required" service is not pensionable. However, "as required" service is included for the purpose of determining the six month qualifying period. The "as required" service must be immediately preceded by either full or part-time employment of 12 hours or more.
The employee is not required to contribute until he is again hired to
work at least 12 hours per week (see SAM
2.4.5).
Example 1 March 13, 1997 - full-time term of 3 months; June 4, 1997 - "as required" term of 2 months; August 4, 1997 - full-time term of 5 months; Contributor effective - September 13, 1997. Example 2 June 18, 1997 - full-time term of 3 months; September 9, 1997 - "as required" term of 5 months; February 4, 1998 - part-time term (more than 12 hours) of 5 months; Contributor effective - February 4, 1998. |
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2.3.2 |
Casual employment and employment as an assignment under a student employment program may be counted for the purpose of determining the six month qualifying period. These employees will contribute to the Superannuation Account once they have completed six months of substantially continuous service. |
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2.4 |
Supplementary Death Benefit (SDB) Elective Participants |
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2.4.1 |
It is important that Compensation Specialists
advise employees who opt for an Annual Allowance, payable immediately or
within 30 days after termination of employment, that they are eligible to
elect to retain SDB coverage at the regular rate of contribution (see SAM
6.4.3). |
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2.4.2 |
Elections for coverage must be made within one year prior to, or 30 days after, terminating employment by completing the PWGSC-TPSGC 2017, "Election to Continue SDB Coverage". Designation of Beneficiary |
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2.4.3 |
Compensation Specialists should ensure that the latest version of the PWGSC-TPSGC 2196 "Naming or Substitution of a Beneficiary", dated 11/95, is completed by all new participants as this is the only acceptable version. |
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2.4.4 |
If required, the version dated 11/95 can be ordered from the appropriate Printing Plant. SDB Payment |
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2.4.5 |
As explained in Compensation
Directive 1997-018 dated June 19, 1997, Compensation Specialists must
complete and forward the PWGSC-TPSGC 2014, "Determination of Payee
and Amount of Supplementary Death Benefit Payment", to the Superannuation
Directorate in cases where death in service occurs. |
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2.4.6 |
In order to avoid delays in processing SDB payments, the PWGSC-TPSGC 2014 and relevant documentation must be sent by facsimile to the Superannuation Directorate. The facsimile number is (506) 533-5989. Recovery of Deficiencies |
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2.4.7 |
Where possible, recovery of SDB deficiencies are to be made from final salary payments and/or termination entitlements. Only in cases where the recovery cannot be made from these payments should the amount be recovered from the SDB payment. |
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2.4.8 |
It is important to note that in cases where SDB contributions are recovered from a final payment, Part 2 (Recoverable Amounts) of the PWGSC-TPSGC 2014 must not be completed. This is to avoid a recovery being made by both the employing department and the Superannuation Directorate. |
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2.5 |
Annualizing Salaries |
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2.5.1 |
For SDB and Estimate of Cost purposes, when annualizing an hourly rate salary the following formula must be used: the number of hours in the Scheduled Work Week (SWW) multiplied by 52 plus 1 day
then
multiply the total number of hours by the hourly rate. Example 1 Hourly rate of $11.40, SWW of 37.5 hours 37.5 x 52 + (37.5 / 5) = 1950 + 7.5 = 1957.5 1957.5 x $11.40 = $ 22,315.50 per annum Example 2 Hourly rate of $12.50, SWW of 40.00 hours 40.0 x 52 + (40 / 5) = 2080 + 8.0 = 2088.0 2 088.0 x $12.50 = $26 100.00 |
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2.6 |
Voluntary Retirement |
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2.6.1 |
An employee who voluntarily retires from the
Public Service before having been employed substantially without interruption
for a period of two years immediately before retirement is entitled only
to a Return of Contributions, even though he may have a total of current
and elective service in excess of two years (see SAM
4.3.6). |
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2.6.2 |
It is important to note that for the purposes of this provision "end of term" is not considered a voluntary resignation. |
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2.7 |
Certification of the PWGSC-TPSGC 2000 |
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2.7.1 |
As explained in Compensation
Directive 1996-031 dated July 19, 1996, it is the employing department's
responsibility to certify salary and service information. Departments will
certify salary and service data regardless of the initial date of completion
of the PWGSC-TPSGC 2000. |
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2.8 |
Medical Examinations |
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2.8.1 |
The medical evaluation form HC/SC 3312E, "Occupational Health Assessment Report", may be completed for either a retirement or past service election. The form can only be used for one evaluation at a time. If a medical is required for more than one reason, a separate HC/SC 3312E is required for each reason. |
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2.9 |
Amended Forms |
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2.9.1 |
The PWGSC-TPSGC 2011, "Notice of Termination and Option for Benefit - Employees with two or more years of Service", was amended as a result of the two year vesting provision and new Transfer Value Option. The latest version of this form is dated 4/97. |
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2.9.2 |
The PWGSC-TPSGC 1422, "Deductions from Annuity or Annual Allowance", has also been amended to include information relating to SDB coverage for elective participants. The latest version of this form is dated 2/98. |
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2.9.3 |
Please note that the only acceptable versions of the PWGSC-TPSGC 2011 and 1422 are the ones dated 4/97 and 2/98. If required, these versions can be ordered from the appropriate Printing Plant. |
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3 |
INQUIRIES |
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3.1 |
Requests for information regarding any other question raised in this bulletin should be addressed to your PWGSC Compensation Services Office. |
