1998-015-e.html

SUBJECT:

CPP/QPP Contribution Rate, PSSA Indexation, PSSA Thresholds/Employer Rate PA Calculations

PURPOSE

i) the change in Canada/Quebec Pension Plan( CPP/QPP) rate of the contribution for 1999;
ii) the rate of pension indexation for 1999;
iii) the Employer contribution rate to the Retirement Compensation Arrangement (RCA) and the Public Service Superannuation Act (PSSA) salary thresholds for 1999; and
iv) to provide examples of how to calculate the Pension Adjustment (PA) for 1998 and 1999.

POLICY

PSSA Salary Threshold and RCA Contributions

For double rate LWOP and double rate past service , the employer rate is 4.39 times the employee contributions.

There has been no change to the Employer rate required for matching PSSA contributions. For Public Service Corporations, the Employer contribution rate continues to be equal to the single rate contributions paid by employees for current service, single rate types of LWOP, and single rate past service elections.

The maximum PA for 1998 is $14,900.

The maximum PA for 1999 is $14,900 (conditional on Federal Budget).

The maximum RRSP contribution for 1999 as specified in the 1996 Federal Budget is $13,500.

Consequently, employees whose 1998 PA is $13,500 or over could have no RRSP room in 1999.

The 1998 Yearly Maximum Pensionable Earnings (YMPE) for CPP/QPP is $36,900.

The 1999 Yearly Maximum Pensionable Earnings (YMPE) for CPP/QPP is $37,400.

The maximum Benefit Entitlement Accrued is $1,722.22.

The PA Calculation will be based on the benefit entitlement multiplied by the factor 9, less $600.00.

You will find in Appendix A of this Bulletin examples of PA Calculations and a worksheet that has been developed as an aid to calculate the PA figure. Please note that the cases where Rehabilitation and Dual Employment have occurred, adjustments are required prior to calculation.

NOTE:

The PWGSC-TPSGC 2386 (Certification Notice - Pension Support System ) MUST indicate a PA figure for Reciprocal Transfer Agreements (RTAs) and for terminated employees who received a lump sum benefit (i.e. Return of Contributions, Transfer Value, or transfer of benefits to another pension plan). A Pension Adjustment Reversal Special Bulletin will be issued shortly with further details.

INQUIRIES