SUPERANNUATION ADMINISTRATION MANUAL
SPECIAL BULLETIN: 2003-004

1

PURPOSE

1.1

The purpose of this bulletin is to provide compensation advisors with the new procedure for reporting salaries for the purpose of calculating a pension benefits division. The new procedure outlined in this bulletin is effective immediately.

1.2

In this text, use of the masculine is generic and applies to both men and women.

2

POLICY

2.1

When calculating the maximum transferable amount (MTA) under the Pension Benefits Division Act (PBDA), the average salary for the best five consecutive years during the period subject to division (PSTD) must be used. However, where a salary revision, a reclassification, a period of acting, a pensionable lump sum payment or bonus has been authorized after the PSTD, the revised salary or lump sum payment must not be used in the average salary calculation. For these cases, the unrevised salary must be used.

2.2

This change in procedure is to streamline the task for human resources personnel by having them complete a PWGSC-TPSGC 2020 form, "Salary Service Information - Pension Support System", in PBDA cases as stated in Section 2.1 rather than by manipulating data on the Pension Support System (PSS).

3

PROCEDURES

3.1

Compensation advisors should note that the new procedure for reporting salaries regarding pension benefits division cases, will only be required when a rate of pay has been authorized after the end of the PSTD and the effective date is prior to the end of the PSTD.

As stated in Section 2 of this bulletin, where a change in salary occurs as a result of a salary revision, a reclassification, a period of acting, a pensionable lump sum payment or bonus and the authorization date is after the end of the PSTD, the rates of pay in effect prior to this event must be used.

In these instances, when certifying salaries for the purpose of a pension benefits division, compensation advisors must complete the PWGSC-TPGSC 2020 form and should only report the old salaries for the period affected by the revision.

Note: Even though the best five consecutive years of salary are used in the calculation of the average salary, six years of service and salary are normally needed to accommodate any periods of authorized or unauthorized leave without pay (LWOP), strike, suspension, etc.

This means that with this new procedure compensation advisors are no longer required to make any changes in salaries using the Salary Maintenance screen (SAQ) of the PSS for the rate of pay authorized after the end of the PSTD with an effective date prior to the end of the PSTD.

PENSION SUPPORT SYSTEM

In all instances pertaining to a pension benefits division, compensation advisors must continue to certify the service, periods of LWOP and salaries by submitting a reason code "1" on the Pension Request screen in the PSS.

3.2

Example 1

Date of becoming a contributor: November 1, 1984

PSTD: October 1, 1985, to September 30, 1999

Salary revision: signed on June 30, 2000, retroactive to June 30, 1999

For the period June 30, 1999, to September 30, 1999, the salary is $40,000.

Revised salary: $41,500

Using the PSS, certification of the service is required for the period October 1, 1985, to September 30, 1999. All salaries, including the revised rates, for the best six consecutive years within the PSTD must also be certified (see note in Section 3.1).

However, Compensation advisors must complete a PWGSC-TPSGC 2020 form for the period June 30, 1999, to September 30, 1999, reflecting the salary prior to the revision ($40,000).

3.3

Example 2

Date of becoming a contributor: October 1, 1980

PSTD: November 1, 1980, to October 1, 1994

This employee was eligible for pay equity for the period March 8, 1985, to September 29, 1998, which was approved by the Canadian Human Rights Tribunal on October 29, 1999.

Using the PSS, certification of the service is required for the period November 1, 1980, to October 1, 1994. All salaries, including the revised rates, for the best six consecutive years within the PSTD must also be certified (see note in Section 3.1).

However, Compensation advisors must complete a PWGSC-TPSGC 2020 form for October 2, 1988, to October 1, 1994, reflecting the old salaries (pay equity payments should not be included in the salary).

3.4

Example 3

Date of becoming a contributor: November 1, 1996

PSTD: January 1, 1997, to October 31, 2000

Salary Revision: signed on September 30, 2000, retroactive to January 1, 1999

For the period January 1, 1999, to September 30, 2000, the salary is $45,000.

Revised salary: $47,000

Using the PSS, certification of salaries is required for the period January 1, 1997, to October 31, 2000, using the revised salaries.

As the salary revision was authorized during the PSTD, a PWGSC-TPSGC 2020 is NOT required in this case.

3.5

The Pension Support System Manual will be updated to incorporate the relevant information contained in this bulletin.

4

INQUIRIES

4.1

Any inquiries on the information contained in this document should be addressed to your Public Works and Government Services Canada (PWGSC) Compensation Services Office.