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SAM 3-4-4
Section: COSTING OF ELECTIVE SERVICE
Subsection: CONTRIBUTION RATES -- ELECTIVE SERVICE
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NOTE 1 |
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The contribution rate used for calculating the contributions required for elective service depends on when the service occurred (the service being elected for). The applicable rates are indicated in tables 1 and 2 below.
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NOTE 2 |
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Effective January 01, 2006, the rates used for calculating the contributions required under the Public Service Superannuation Act (PSSA) will increase each year by 0.3%. Contributions based on pensionable earnings up to the yearly maximum pensionable earnings (YMPE) under the Canada Pension plan (CPP) and the Quebec Pension Plan (QPP) will increase until 2013 while contributions on those pensionable earnings over the YMPE will increase until 2008. |
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As the cost of elective service is determined based on the contribution rate in effect at the time the service occurred, this increase will apply to periods of elective service which occurred on or after January 1, 2006. |
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The following table sets out the elective service contribution rates that will apply:
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Current |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
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Pensionable earnings up to the YMPE |
4.0% |
4.3% |
4.6% |
4.9% |
5.2% |
5.5% |
5.8% |
6.1% |
6.4% |
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Pensionable earnings over the YMPE |
7.5% |
7.8% |
8.1% |
8.4% |
8.4% |
8.4% |
8.4% |
8.4% |
8.4% |
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NOTE 3 |
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Retirement Compensation Arrangements (RCA) Account |
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For periods of elective service which occurred on or after December 15, 1994, the rate of contributions for the RCA account is 7.5% on the portion of salary exceeding the salary threshold for the purpose of contributing to the Public Service Pension Fund (PSPF). The salary threshold to be used is the one for the year pertaining to the period of elective service (see table 2). |
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Effective January 1, 2006, the rates of contributions for the RCA account will increase each year by 0.3% 2008. These new rates will apply to periods of elective service which occurred on or after January 1, 2006. |
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The following table sets out the RCA Account elective service contribution rates that will apply:
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Current |
2006 |
2007 |
2008 |
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Pensionable earnings above the salary threshold |
7.5% |
7.8% |
8.1% |
8.4% |
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TABLE 1 |
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The contribution rates for elective service are as follows: |
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Elective Service |
Public Service Superannuation Act (PSSA) |
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Canada Pension Plan (CPP) |
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Service before 1-1-66 -- Male Contributors |
6.5% |
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0 |
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Service before 1-1-66 -- Female Contributors |
5.0% |
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0 |
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For service from 1-1-66 and after, the rates of contributions used are the same for both male and female contributors. |
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Service from 1-1-66 to 31-3-70 |
6.5% |
minus |
1.8% |
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Service from 1-4-70 to 31-12-76 |
7.0% |
minus |
1.8% |
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Service from 1-1-77 to 31-12-86 |
7.5% |
minus |
1.8% |
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Service from 1-1-87 to 31-12-87 |
7.5% |
minus |
1.9% |
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Service from 1-1-88 to 31-12-88 |
7.5% |
minus |
2.0% |
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Service from 1-1-89 to 31-12-89 |
7.5% |
minus |
2.1% |
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Service from 1-1-90 to 31-12-90 |
7.5% |
minus |
2.2% |
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Service from 1-1-91 to 31-12-91 |
7.5% |
minus |
2.3% |
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Service from 1-1-92 to 31-12-92 |
7.5% |
minus |
2.4% |
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Service from 1-1-93 to 31-12-93 |
7.5% |
minus |
2.5% |
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Service from 1-1-94 to 31-12-94 |
7.5% |
minus |
2.6% |
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Service from 1-1-95 to 31-12-95 |
7.5% |
minus |
2.7% |
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Service from 1-1-96 to 31-12-96 |
7.5% |
minus |
2.8% |
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Service from 1-1-97 to 31-12-97 |
7.5% |
minus |
3.0% |
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Service from 1-1-98 to 31-12-98 |
7.5% |
minus |
3.2% |
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Service from 1-1-99 to 31-12-99 |
7.5% |
minus |
3.5% |
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PSSA |
Yearly Maximum Pensionable Earnings (YMPE) |
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Service from 1-1-00 to 31-12-00 |
4% of salary up to the YMPE and 7.5% of salary above the YMPE |
$37,600 |
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Service from 1-1-01 to 31-12-01 |
4% of salary up to the YMPE and 7.5% of salary above the YMPE |
$38,300 |
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Service from 1-1-02 to 31-12-02 |
4% of salary up to the YMPE and 7.5% of salary above the YMPE |
$39,100 |
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Service from 1-1-03 to 31-12-03 |
4% of salary up to the YMPE and 7.5% of salary above the YMPE |
$39,900 |
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Service from 1-1-04 to 31-12-04 |
4% of salary up to the YMPE and 7.5% of salary above the YMPE |
$40,500 |
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Service from 1-1-05 to 31-12-05 |
4% of salary up to the YMPE and 7.5% of salary above the YMPE |
$41,100 |
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Service from 1-1-06 to 31-12-06 |
4.3% of salary up to the YMPE and 7.8% of salary above the YMPE |
$42,100 |
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Service from 1-1-07 to 31-12-07 |
4.6% of salary up to the YMPE and 8.1% of salary above the YMPE |
$43,700 |
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TABLE 2 |
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Elective Service |
RCA Contributions Rate |
Salary Threshold |
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Service from 15-12-94 to 31-12-94 |
7.5% |
$98,200 |
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Service from 1-1-95 to 31-12-95 |
7.5% |
$98,400 |
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Service from 1-1-96 to 31-12-96 |
7.5% |
$98,600 |
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Service from 1-1-97 to 31-12-97 |
7.5% |
$98,700 |
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Service from 1-1-98 to 31-12-98 |
7.5% |
$99,100 |
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Service from 1-1-99 to 31-12-99 |
7.5% |
$99,300 |
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Service from 1-1-00 to 31-12-00 |
7.5% |
$99,300 |
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Service from 1-1-01 to 31-12-01 |
7.5% |
$99,600 |
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Service from 1-1-02 to 31-12-02 |
7.5% |
$99,800 |
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Service from 1-1-03 to 31-12-03 |
7.5% |
$100,100 |
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Service from 1-1-04 to 31-12-04 |
7.5% |
$105,900 |
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Service from 1-1-05 to 31-12-05 |
7.5% |
$114,400 |
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Service from 1-1-06 to 31-12-06 |
7.8% |
$120,300 |
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Service from 1-1-07 to 31-12-07 |
8.1% |
$126,500 |
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BACKGROUND |
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Before August 1, 1960, a male contributor paid a contribution rate of 6.0%. This rate was fixed at 6.5% effective August 1, l960. The contribution rate for female employees remained at 5.0%. |
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The CPP came into effect on January 1, 1966, with a contribution rate of 1.8%. The contribution rates of the PSSA were integrated with those of the CPP so that no one would contribute in excess of 6.5% (5.0% for females). The PSSA contributions were cut back by 1.8% on those salaries for which contributions were required for CPP. Effective January 1, l987, the CPP contribution rate was increased to 1.9%. The annual CPP rates are reviewed and amended every January 1. When an employee is electing for service which occurred after January 1, l966, the PSSA contributions are reduced by the amount of the CPP contributions for each year. |
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Effective April 1, 1970, the Supplementary Retirement Benefits Act (SRBA) came into effect and all contributors were required to pay an additional 0.5% in contributions to the Supplementary Retirement Benefit Account. On January 1, 1977, the contribution rate for SRBA was increased to 1.0%. |
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Effective April 1, 1991, the contributions under the SRBA were combined with the contributions required under the PSSA. |
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The contribution rates for elective service do not necessarily follow the historical contribution rates. Refer to the table for the contribution rates for elective service. |
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On February 1, 1976, the PSSA contribution rate for female employees was increased to 6.5%. From that date up to February 1, 1977, there was a transitional period when female contributors could elect for prior service at the 5.0% contribution rate provided they were contributing to the Public Service Superannuation Account before February 1, 1976, and made an election prior to February 1, 1977. |
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For those female employees who were contributors prior to February 1, 1976, but made an election after February 1, 1977, and for those who became contributors on or after February 1, 1976, only the elective service prior to January 1, 1966, is set at the 5.0% contribution rate. All elective service which occurs after January 1, 1966, is set at the 6.5%, 7.0% or 7.5% rate for PSSA. |
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For all periods of elective service commencing on or after January 1, 2000, the rate used for calculating the contributions required under the PSSA was changed. For those periods of elective service, the rate of contributions required is 4% of the salary up to the YMPE and 7.5% of salaries above the YMPE. The YMPE to be used is the one corresponding to the year of the elective service (see table 1).
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REFERENCE |
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Public Service Superannuation Act, Section 7.
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Last Update: November 2006
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