|
SUPERANNUATION ADMINISTRATION MANUAL
SPECIAL BULLETIN: 2005-001
| January 20, 2005 (Revised February 2, 2005)
SUBJECT: |
Changes to the Certification of Leave Without Pay Form (PWGSC-TPSGC 2123
(PDF 558k)) |
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1 |
PURPOSE |
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1.1 |
The purpose of the bulletin is to provide compensation
advisors with instructions for the completion of the revised Certification
of Leave Without Pay form (PWGSC-TPSGC 2123
(PDF 558k)). |
|
1.2 |
In this text, use of the masculine is generic
and applies to both men and women.
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2 |
POLICY |
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2.1 |
The form PWGSC-TPSGC 2123
(PDF 558k) has
been revised to include additional information needed to comply with the
Income Tax Regulations. This information is required by the Superannuation,
Pension Transition and Client Services Sector (SPTCSS) to calculate a past
service pension adjustment (PSPA) when a member is electing for past service.
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3 |
PROCEDURES/INSTRUCTIONS |
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3.1 |
Completion of the form PWGSC-TPSGC 2123
(PDF 558k) is
required for all elections for prior contributory public service for which
a lump sum benefit, such as a return of contributions (ROC), was paid upon
termination of employment. The SPTCSS may request the completion of the
form PWGSC-TPSGC 2123
(PDF 558k) for
situations where an employee elects to reinstate the full period of service
for which he had previously received a transfer value (TV). For those situations,
the SPTCSS will contact the client department if the completion of the
form is required. |
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3.1.2 |
Compensation advisors are to note that
for elections that have not been finalized, the SPTCSS will be requesting
client departments to provide additional information as per the revised
form. |
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3.2 |
Section A |
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3.2.1 |
A new column has been added entitled "Department
Name". For each period of elective service, compensation advisors are to
indicate the name of the department, agency or Crown corporation. If an
employee worked in more than one department during the period of elective
service, then the last employing department should be indicated. This section
has also been modified by adding lines. |
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3.3 |
Section B - Period(s) of Pensionable
Leave Without Pay (LWOP) |
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3.3.1 |
This section has been modified for the purpose
of reporting periods of LWOP for which contributions were required. If
an employee opted to count as pensionable service the full period of LWOP,
then the full period should be reported in this section. On the other hand,
if the employee opted not to count the portion of the LWOP exceeding the
first three months, then only the first three months should be reported
in this section. Please note that periods of pensionable LWOP of less than
three months should also be reported in this section. |
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Example 1: |
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Period of elective service: January 8, 2001 to March 31, 2004
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Period of LWOP (personal leave): April 1, 2002 to March 31, 2003
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Employee chose to count the full period of LWOP as pensionable service
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When completing Section B, the full period
(April 1, 2002 to March 31, 2003) must be reported. |
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Example 2: |
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Period of elective service: January 8, 2001 to March 31, 2004
-
Period of LWOP (maternity leave): September 9, 2002 to
January 5, 2003
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Period of LWOP (parental leave): January 6, 2003 to April 30, 2003
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Employee opted not to count the period of LWOP
in excess of the first three months as pensionable service, i.e. from December 9, 2002
to January 5, 2003 (maternity leave) and January 6, 2003
to April 30, 2003 (parental leave). |
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When completing Section B, only the period
of September 9, 2002 to December 8, 2002 should be
reported. |
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3.3.2 |
The list of reason codes for this section has
been modified to add parental leave. Compensation advisors must indicate
the reason code when reporting periods of LWOP in this section. If the
reason code is not included in the list, then the reason for the LWOP must
be indicated in the Remarks Section (Section H). |
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3.4 |
Section C - Option Not to Count LWOP
as Pensionable Service (New) |
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3.4.1 |
This section has been added for the purpose
of reporting periods of LWOP for which an employee made an option not to
count the period in excess of the first three months as pensionable service. |
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Example: |
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Period of elective service: January 8, 2001 to March 31, 2004
-
Period of LWOP (maternity leave): September 9, 2002 to
January 5, 2003
-
Period of LWOP (parental leave): January 6, 2003 to April 30, 2003
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Employee opted not to count the period of LWOP
in excess of the first three months as pensionable service, i.e. from December 9, 2002
to January 5, 2003 (maternity leave) and from January 6, 2003
to April 30, 2003 (parental leave). |
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When completing Section C, only the periods
of December 9, 2002 to January 5, 2003 (maternity leave)
and from January 6, 2003 to April 30, 2003 (parental
leave) should be reported. As indicated earlier, the first three months
of the LWOP are to be reported in Section B. |
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3.4.2 |
The same list of reason codes mentioned in
Section B applies to this section as well. Compensation advisors must indicate
the reason code when reporting periods of LWOP in this section. If the
reason code is not included in the list, then the reason for the LWOP must
be indicated in Section H. |
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3.4.3 |
Compensation advisors are to note that
if the election pertains to one or more periods of LWOP that an employee
had previously opted not to count as pensionable service and no pension
adjustment (PA) was reported, then the Elective Non-contributory Pensionable
Service Record form (PWGSC-TPSGC 2001) must be used. |
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3.5 |
Section D (New) |
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3.5.1 |
The purpose of this section is to indicate
if a PA was reported for the periods of LWOP indicated in Section C. For
additional information regarding the reporting of PAs for periods of LWOP,
compensation advisors should refer to Compensation Directive 1994-012 section
4.7 (iii) and Compensation Directive 1995-010 section 2.4. |
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3.6 |
Section E (Formerly Section C) |
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The purpose of this section is to report any
periods of non-pensionable service such as periods of strike and suspension.
The list of reason codes has been modified to include periods of LWOP that
have exceeded the 5-year limit of permissible pensionable LWOP. If a period
of elective service includes a period of LWOP that has exceeded the 5-year
limit permissible, then such period should be reported in this section. |
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3.7 |
Section F - Pensionable Earnings for
Post-1989 Service for Each Calendar Year (New) |
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3.7.1 |
This section has been added for the purpose
of reporting the pensionable earnings for periods of contributory service
that occurred on and after January 1, 1990. The information required when
completing this section is the same as the information required when completing
section 2 of the form PWGSC-TPSGC 2001. |
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NOTE: Completion of this section is
not required if the ROC was paid prior to January 1, 1997. |
| |
3.7.2 |
The pensionable earnings are required to calculate
a PA. When completing this section, compensation advisors must report the
pensionable earnings in accordance with the payroll calendar year. This
means that for each year, the pensionable earnings to be reported are those
received up to the last day of the last pay period for that year. |
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3.7.3 |
The pensionable earnings must also include
allowances which form part of salary for pension purposes. |
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| |
Please note that the examples below are based
on the current pay cycle (7C) of the Regional Pay System payroll calendar. |
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Example: |
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Period of elective service: June 10, 2002 to November 28, 2003
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Date of election: September 6, 2004
-
Scheduled work week (SWW): 37.50
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Assigned work week (AWW): 37.50
-
Annual Salary:
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June 10, 2002 to June 20, 2002:
$40,400 |
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June 21, 2002 to June 20, 2003: $41,600 |
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June 21, 2003 to November 28, 2003: $42,300 |
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Allowance: $800 per annum (bilingual bonus) |
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When completing this section, the pensionable
earnings to be reported are as follows: |
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Pensionable earnings from June 10, 2002
to January 1, 2003 |
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-
June 10, 2002 to June 20, 2002: 9 days at $40,400
= $1,393.74
-
June 21, 2002 to January 1, 2003: 139 days at $41,600
= $22,164.98
-
Bilingual bonus from June 10, 2002 to January 1, 2003:
153 days at $800 = $469.18
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The total pensionable earnings from
June 10, 2002 to January 1, 2003 are as follows: $1,393.74
+ $22,164.98 + $469.18 = $24,027.90 |
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Pensionable earnings from January 2, 2003
to November 28, 2003 |
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-
January 2, 2003 to June 20, 2003: 122 days at
$41,600 = $19,454.15
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June 21, 2003 to November 28, 2003: 115 days
at $42,300 = $18,646.50
-
Bilingual bonus from January 2, 2003 to November 28, 2003:
237 days at $800 = $726.77
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Total pensionable earnings from January 2, 2003
to November 28, 2003: $19,454.15 + $18,646.50 + $726.77 = $38,827.42 |
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3.7.4 |
Retroactive Salary Adjustments |
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| |
For purposes of calculating a PA, lump sum
payments in terms of retroactive salary adjustments must be reported in
the calendar year in which the payments are made. Therefore, if a lump
sum payment was made during the period of elective service, then the amount
of the lump sum must be included in the pensionable earnings. |
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| |
Example 1: |
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Period of elective service: February 21, 2000 to December 31, 2001
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Date of election: August 9, 2004
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SWW: 37.50
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AWW: 37.50
-
Annual Salary:
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|
February 21, 2000 to June 20, 2000:
$37,300 |
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Pay equity lump sum payment: $8, 230 (paid on April 7, 2000) |
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June 21, 2000 to December 31, 2000: $37,300 |
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January 1, 2001 to June 20, 2001: $37,300 |
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June 21, 2001 to August 1, 2001: $37,300 |
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August 2, 2001 to December 31, 2001: $39,700 |
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A new collective agreement was signed on May 4, 2001.
The annual salary was revised on August 2, 2001 and a lump sum
payment in the amount of $2,675 was paid on July 27, 2001.
The lump sum amount consists of a retroactive salary increase for
the period of June 21, 2000 to August 1, 2001. |
|
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The pensionable earnings are as follows: |
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-
From February 21, 2000 to June 20, 2000: 87
days at $37,300 = $12,439.05
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|
During this period, a pay equity lump sum payment
of $8,230 was paid. The pay equity lump sum amount must be included
in the pensionable earnings for this period. |
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Therefore, the pensionable earnings for the period of February 21, 2000
to June 20, 2000 are: $12,439.05 + $8,230 = $20,669.05 |
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-
From June 21, 2000 to December 20, 2000: 131
days at $37,300 = $18,730.07
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From December 21, 2000 to June 20, 2001: 130 days at $37,300
= $18,587.09
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From June 21, 2001 to August 1, 2001: 30 days
at $37,300 = $4,289.33
During this period, a retroactive salary increase lump
sum payment of $2,675 was paid. The lump sum amount must be included
in the pensionable earnings for this period.
-
From August 2, 2001 to December 19, 2001: 100
days at $39,700 = $15,217.72
|
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Therefore, the pensionable earnings for the period
of June 21, 2001 to December 19, 2001 are: $4,289.33
+ $15,217.72 + $2,675 = $22,182.05 |
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- From December 20, 2001 to December 31, 2001: 8 days at $39,700 =
$1,217.42
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When completing this section of the form, the
pensionable earnings to be reported are as follows: |
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|
Total pensionable earnings from February 21, 2000
to December 20, 2000: $12,439.05 + $8,230 + $18,730.07 = $39,399.12 |
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Total pensionable earnings for the
period of December 21, 2000 to December 19, 2001: $18,587.09
+ $4,289.33 + $15,217.72 + $2,675 = $40,769.14 |
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Total pensionable earnings for the
period of December 20, 2001 to December 31, 2001: $1,217.42 |
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Example 2: |
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Period of elective service: June 1, 1997 to April 30,
1999
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Date of election: December 16, 2004
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Annual Salary:
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|
Pre-revision |
Post-revision |
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June 1, 1997:
$38,000 |
June 1, 1997:
$39,400 |
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June 1, 1998:
$38,000 |
June 1, 1998:
$40,100 |
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|
A collective agreement is signed on November 1, 1998
providing for salary increases retroactive to June 1, 1997.
A lump sum payment of $3,500 is paid on January 22, 1999 as a retroactive
salary increase up to February 3, 1999 and the revised
salary becomes payable on the regular pay effective February 4, 1999. |
|
Although the salaries were revised retroactively, only the salaries
received must be used for the pensionable earnings. However, the
lump sum payment of $3,500 will be included in the pensionable earnings
as it was paid during the period of elective service. |
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The pensionable earnings for the period of
elective service will be as follows: |
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-
From June 1, 1997 to December 24, 1997: 148
days at $38,000 (salary received) = $21,557.80
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From December 25, 1997 to May 31, 1998: 112 days at $38,000
(salary received) = $16,314.01
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From June 1, 1998 to December 23, 1998: 148
days at $38,000 (salary received) = $21,557.80
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From December 24, 1998 to February 3, 1999: 30 days at
$38,000 (salary received) = $4,369.82 + $3,500 (lump sum payment
as a result of a retroactive salary increase, paid on January 22,
1999) = $7,869.82
-
From February 4, 1999 to April 30, 1999: 62 days at $40,100
(salary received as a result of salary increase effective June 1, 1998)
= $9,530.05
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When completing this section of the form, the
pensionable earnings to be reported are as follows: |
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Total pensionable earnings for the
period of June 1, 1997 to December 24, 1997: $21,557.80 |
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Total pensionable earnings for the
period of December 25, 1997 to December 23, 1998: $16,314.01
+ $21,557.80 = $37,871.81 |
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Total pensionable earnings for the
period of December 24, 1998 to April 30, 1999: $7,869.82 + $9,530.05
= $17,399.87 |
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Example 3: |
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Period of elective service: January 8, 2001 to December 31, 2003
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Date of election: January 19, 2005
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SWW: 37.50
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AWW: 37.50
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Annual Salary:
|
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January 8, 2001 to June 20, 2001:
$79,983 |
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June 21, 2001 to June 20, 2002: $83,500 |
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June 21, 2002 to March 31, 2003: $85,588 |
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April 1, 2003 to December 31, 2003: $87,370 |
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On May 2, 2003, a lump sum payment of $3,000 was paid
in terms of a performance award. |
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The pensionable earnings for the period of
elective service will be as follows: |
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January 8, 2001 to June 20, 2001: 118 days at
$79,983 = $36,177.53
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June 21, 2001 to December 19, 2001: 130 days
at $83,500 = $41,609.17
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December 20, 2001 to June 20, 2002: 131 days at $83,500
= $41,929.24
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June 21, 2002 to January 1, 2003: 139 days at $85,588
= $45,602.31
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January 2, 2003 to March 31, 2003: 63 days at
$85,588 = $20,668.67
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April 1, 2003 to December 31, 2003: 197 days
at $87,370 = $65,976.27. During this period a lump sum performance
award of $3,000 was paid. This amount must be included in the pensionable
earnings. Therefore, the pensionable earnings for this period are:
$65,976.27 + $3,000 = $68,976.27.
|
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When completing this section of the form, the
pensionable earnings to be reported are as follows: |
|
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Total pensionable earnings from January 8, 2001
to December 19, 2001: $36,177.53 + $41,609.17 = $77,786.70 |
|
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Total pensionable earnings from December
20, 2001 to January 1, 2003: $41,929.24 + $45,602.31 =
$87,531.55 |
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Total pensionable earnings from January 2, 2003
to December 31, 2003: $20,668.67 + $68,976.27 ($65,976.27 +
$3,000) = $89,644.94 |
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3.7.5 |
Retirement Compensation Arrangements
(RCA) Account |
|
|
When completing this section, compensation
advisors must ensure that the pensionable earnings do not exceed the salary
threshold permissible under the Public Service Superannuation Act (PSSA)
for the corresponding year. This is because the pensionable earnings exceeding
the salary threshold are subject to the RCA account and no PAs are to be
calculated on those earnings. The yearly RCA salary thresholds since 1994
are provided in the Chapter 2-5-2 of the Superannuation Administration
Manual (SAM). |
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Example: |
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Period of elective service: January 8, 2002 to December 31, 2002
-
Total pensionable earnings: $101,200
-
Salary threshold for 2002: $99,800
|
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|
Since the total pensionable earnings for this
period exceed the salary threshold permissible, then when completing this
section, the amount of $99,800 must be provided. Earnings above the salary
threshold are subject to the RCA and therefore are not subject to a PA
calculation. |
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3.7.6 |
Non-Pensionable LWOP |
|
|
When calculating the pensionable earnings,
all periods of non-pensionable LWOP such as strike and suspension must
be excluded. Periods of LWOP for which an employee opted not to count as
pensionable service should also be excluded. |
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3.7.7 |
PAs |
|
|
In addition to the pensionable earnings, compensation
advisors must also indicate the PA that was reported to the Canada Revenue
Agency (CRA) for each calendar year. This information is required to assist
the SPTCSS in determining if the PA exceeds the amount of the lump sum
benefit (ROC, TV) for the post-1989 service. |
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3.8 |
Section G (Formerly Section D) |
|
|
This section has been modified by adding a
box to indicate the date of payment of the ROC. In addition, three boxes
have been added to indicate if the ROC has been transferred to a registered
retirement savings plan (RRSP), a registered pension plan (RPP) or other
type of vehicle. If the ROC was transferred to an RPP, the compensation
advisor must indicate in Section H, whether the RPP was a defined benefit
or defined contribution type plan. In addition, if the ROC was paid in
cash, compensation advisors must indicate it in Section H. |
|
|
If the ROC was transferred to an RRSP or another
RPP, compensation advisors must report in the Amount box, only the portion
of the ROC that applies to the service that occurred after December 31, 1989.
If the payment of a ROC covered a period of service that includes both
pre-1990 and post-1989 service, then the amount must be prorated. |
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Example: |
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Period of service: January 10, 1989 to December 1, 1991
-
ROC amount for the full period including interests: $3,600
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ROC transferred to an RRSP
-
Number of calendar days in the period of service: 1,056
-
Number of calendar days for the post-1989 service: 700
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$3,600 / 1,056 days X 700 days = $2,386.36
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Therefore, $2,386.36 is the amount to be reported. |
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3.9 |
Section H (Formerly Section E) |
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There were no changes made to this section.
The purpose of the Remarks Section is to provide additional information
or clarifications. |
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3.10 |
Section I (Formerly Section F) |
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This section has been modified to provide a
space for an e-mail address.
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4 |
INQUIRIES |
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4.1 |
Any request for information regarding the content
of this bulletin should be addressed to your Public Works and Government
Services Canada (PWGSC) Compensation Services Office.
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Original Signed by
R. Jolicoeur |
R. Jolicoeur
Director General
Compensation Sector
Finance, Accounting, Banking and Compensation
Reference(s): CJA 9007-10-9
|