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1 |
PURPOSE
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1.1 |
The purpose of this bulletin
is to provide information regarding amendments to the Retirement
Compensation Arrangements (RCA) Regulations, No. 1
pertaining to the transfer of pension credits under the Public Service
Superannuation Act (PSSA) to an outside pension plan
under a reciprocal transfer agreement (RTA) or a pension
transfer agreement (PTA). |
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1.2 |
In this text, use of the masculine
is generic and applies to both men and women. |
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1.3 |
A notice of information to
employees concerning the above has been included with this
Superannuation
Administration Manual Special Bulletin and will also be
posted in the "Who
are you? - Public Service Employee" page of the Compensation
Sector Web site.
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2 |
BACKGROUND
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2.1 |
In 1994, the RCA Regulations,
No. 1 were created to provide a vehicle to pay those
pension benefits that could not be provided under a registered
pension plan, due to the Income Tax Act (ITA) limits. |
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2.2 |
Prior to the amendments taking
effect, individuals who transferred their PSSA pension credits
under an RTA or PTA could not transfer out their RCA credits
to a retirement compensation arrangement fund established
by an outside employer.
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3 |
POLICY
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3.1 |
Effective June 13, 2003, amendments
were made to the RCA Regulations, No. 1 with the following
consequential amendments to the Public Service Superannuation
Regulations (PSSR) to provide for the transfer of an amount
from the RCA account to a retirement compensation arrangement
account established by an outside employer, in respect of
an individual with an entitlement under RCA Regulations,
No. 1, who chooses to transfer his PSSA pension credits
under an RTA or PTA. |
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Plan members, who choose to transfer
their PSSA pension credits to an employer with whom an RTA
or a PTA exists, must also transfer out their RCA credits
to a retirement compensation arrangement account established
by that employer . |
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In cases where the amount transferred
to the outside employer is less than the base amounts determined
on an actuarial basis for vested members or on the basis
of the amount of RCA contributions for non vested members,
the difference will be paid to the plan member in a lump
sum, taxable at source. |
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3.2 |
The amendments also provide for
the payment of an amount from the RCA directly to a plan
member if one of the following situations occur:
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3.3 |
Before making a decision to
transfer PSSA pension credits to an outside employer's
pension plan,
it is strongly recommended that employees be advised to
carefully consider their overall situation. The retirement
compensation
arrangement established by outside employers may not necessarily
provide the same type of benefit or the same amount of
benefit that is provided under the RCA Regulations, No. 1.
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4 |
PROCEDURE
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4.1 |
Superannuation Directorate |
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4.1.1 |
The Superannuation Directorate
will be responsible for identifying all former employees
to whom these amendments apply and for advising them of the
changes in the regulations and of the options that have become
available. |
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4.2 |
Departments, Agencies, and
Crown Corporations |
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4.2.1 |
Departments, Agencies, and Crown
Corporations will be responsible for informing their employees
of the changes.
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5 |
INQUIRIES
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5.1 |
Any request for information regarding
the preceding, should be addressed to your Public Works and
Government Services Canada (PWGSC) Compensation Services
Office. |