Compensation Annual Report 2001-2002

• Highlights
• A Few Words About PWGSC Compensation
• PWGSC Compensation Activities
• Initiatives Common to Pay, Pension and Insurance
  • Modernization of Pension and Pay Services and Systems
  • Web Site
  • Pay Equity
  • Recruitment Program and Development
  • Web Access to Information and Services
• Pension and Insurance Initiatives
  • Modernization of Pension and Pay Services and Systems - Pension Component
  • Communications
  • Your Statement of Pension and Group Benefit Plans
  • Standard Payment System
  • Services Provided on the Web
  • Data Integrity - Preliminary Analysis
  • Post Implementation Cleanup Activities
  • Interface with Crown Corporations Systems
  • Financial Controls
• Pension and Insurance Activities
• Pension and Insurance: Looking Ahead to 2002-2003
• Pay Initiatives
  • Modernization of Pension and Pay Services and Systems - Pay Component
  • Introduction of the Generic Pro Forma Functionality
  • Compensation Training Redesign
  • Conversion of the Regional Pay System T4 Print Process
  • Canada Savings Bonds Campaign Pilot
• Pay Activities
• Pay: Looking Ahead to 2002-2003

Highlights

Public Works and Government Services Canada (PWGSC) Compensation met the significant 2001-2002 challenges by continuing the transition towards a customized and integrated service delivery for our clients. Following the new focus for PWGSC, this fiscal year has seen more partnerships with departments and intensive analysis of options to modernize the compensation systems. Improvements were also made to enhance service delivery performance, on-line services for government employees, training, development, and recruitment.

PWGSC Compensation has also:

• Initiated Phase 2 of the Modernization of Compensation Systems project which assessed the current compensation systems data and application architectures. It also identified the key pressure points that inhibit the systems' ability to adopt the technologies and the best business practices needed to support the new business vision which is to provide modern, client-focused services, comparable to those offered by industry leaders.

• Continued pension modernization activities by investigating pension services in other large public and private organizations to identify best practices and future trends in service delivery methods and technologies. Commercial-Off-The-Shelf (COTS) implementations in other large public and private organizations were also investigated in order to identify strategies, costs, impacts, risks, and lessons learned. Scope statements, preliminary business requirements and rules, as well as a draft business model, were developed to provide a consistent framework for analysis.

• Developed a new "MS Excel" workbook and used it as an interface between the Crown corporations' human resources and pay systems and the Contributor System in order to automate the reporting of pension data that used to be performed manually. New controls were put into place for cash receipts of pension contributions. Salary/service reject correction processes were centralized in the Superannuation Directorate.

• Developed and implemented an external Post-secondary Recruitment Program focused on employment equity groups: the program includes three eight-month assignments and structured training. A Web-based orientation package and a welcome guide were completed for the new recruits. Support mechanisms such as coaching and mentoring were established. Eight recruits participated in the recruitment program during 2001-2002.

• Continued to provide information to departmental compensation advisors by responding to 655 inquiries regarding pay, pension, insurance and the Compensation Sector Web site in general and by publishing 35 new compensation directives.

• Reorganized the structure of the Compensation Sector Web site to make it easier for a broad clientele, including compensation advisors, employees, pensioners, and eventually managers, to use and search out information.

• Continued the development of the Pension Benefits Calculator to add "Net Pension Calculations". There was an average of 68,000 hits per month on the Pension Benefits Calculator in 2001-2002.

• Developed a Service Buyback Estimator for the calculation of elective service estimates, which will be rolled out in 2002-2003.

• Undertook construction of the "Your Statement of Pension and Group Benefit Plans" data base which will provide electronic salary, service and insurance data to members. Implementation will occur once all security issues have been resolved.

• Issued paper versions of "Your Statement of Pension and Group Benefit Plans" to 231,500 pension plan participants. This was the first time that statements have been issued to public service employees in 90 departments and 59 Crown corporations.

If you have any comments about this report or would like further information, please contact:

Tom Meyers
Director, Pay Operations and Service Management Directorate
Compensation Sector
Public Works and Government Services Canada
1451 Coldrey Avenue
Ottawa, Ontario K1A 0S5

A Few Words About PWGSC Compensation

PWGSC Compensation administers government payroll, pension and insurance processes, including the development and maintenance of computer systems and a national service office infrastructure. This allows departments to administer pay and benefits in accordance with collective agreements and compensation policies established by the Treasury Board and certain separate employers as well as to fulfill the requirements of the Public Service Superannuation Act (PSSA).

PWGSC Compensation also provides specialized pension services for the administration of superannuation plans to the Department of National Defense (DND), the Royal Canadian Mounted Police (RCMP), Members of Parliament, diplomatic services, lieutenant governors and judges.

Administration is provided for insurances, including the Public Service Health Care Plan (PSHCP), the Disability Insurance Plan (DI), the Public Service Management Insurance Plan (PSMIP) - Life Insurance, the PSMIP - Long-term Disability, and the Dental Care Plan (DCP).

The Compensation Sector, which is a part of the Government Operational Service (GOS) Branch of PWGSC, directs these activities in partnership with PWGSC regional offices, the Superannuation Directorate (located in the Atlantic Region), and Government Telecommunications and Informatics Services (GTIS).

While GTIS manages the informatics aspect of compensation services, the Superannuation Directorate is responsible for the delivery of the benefits provided under the PSSA. Regional pay offices provide pay, advisory and training services to compensation advisors across the country. Insurance administration activities and functions are divided between the Compensation Sector, regional pay offices and the Superannuation Directorate.

Due to the current government-wide growth in Public Service employment, the number of pay accounts paid by means of the Regional Pay System (RPS) has continued to increase. On March 31, 2002, there were 264,500 pay accounts in the RPS, an increase of 15,801 (6.4%) from March 31, 2001.

Pay Facts

• 4 different pay cycles
• 25 collective agreements under TB
• 398 types of entitlements
• 120 collective agreements under separate employers
• 330 types of deductions
• 140 remittance agencies

Pension Facts

PSSA Clients
100 Pay and Pension Clients
43 Pension-only Clients

Insurance Facts

PWGSC Compensation Activities

Following is a summary statement of the objective, commitments, strategies and key activities of PWGSC Compensation. Developed in 2001-2002, these are detailed in PWGSC's Report on Plans and Priorities, the PWGSC Business Plan and the GOS 2001-2002 operational plans.

Objective

The objective of PWGSC Compensation is to provide compensation services to government departments, agencies and public servants. Commitments include:

• the strengthening of collaborative relationships with clients focusing on customizing and integrating services;
• the modernization of values-based human resources management, while managing change; and
• the support of the government's policy agenda.

Initiatives Common to Pay, Pension and Insurance

Modernization of Pension and Pay Services and Systems

To address the challenges of aging technology and increasing client demands, PWGSC Compensation completed the preliminary phase of the modernization project to renew business processes, systems and working tools in order to provide cost-effective, "best in class" services that will allow client departments to deliver their programs to Canadians more efficiently.

Following Phase 1's conclusions that technical modernization would not bring sufficient improvements without corresponding modernization of business processes, Phase 2 was initiated to assess the current compensation systems. Phase 2 identified the key pressure points inhibiting the systems' ability to adopt the technologies and the best business practices needed to provide modern, client-focused services.

In 2001-2002, an extensive consultation process included an in-depth survey of client satisfaction, future strategic direction, as well as site visits with industry leaders. The insights and information obtained allowed PWGSC Compensation to develop a comprehensive direction for future services that will ensure PWGSC's ongoing delivery of cost-effective services across the Public Service.

The study identified that pension and pay services and systems should be evaluated separately: the Pension Modernization Project and Pay Modernization Project were defined to continue the work.

Web Site

The Compensation Sector Web site contains information concerning PWGSC Compensation's products including compensation publications, directives, bulletins and communiqués, as well as other information of a general nature. In 2001-2002, approximately 2,296 new pages of information for PWGSC Compensation clients were published. This included 101 new pay rate implementation bulletins and 35 new compensation directives. Beyond these day-to-day activities, PWGSC Compensation planned and began the implementation of the future of the Compensation Web site. The Compensation Sector Web site's look was changed to correspond to the Government of Canada's Common Look and Feel standards for Internet pages. This Web site was also restructured, which made it easier to use, search and maintain.

Pay Equity

Pay Equity interest payment programs were modified to calculate daily interest that will be paid in addition to the simple interest payments issued in November 2000 and May 2001. The Superannuation Directorate received over 26,000 pay equity files requiring retroactive payments and adjustments to pensioners' accounts. Approximately 23,500 files were completed and the remaining 2,500 files, which required additional information, were worked on.

Recruitment Program and Development

In order to maintain a group of competent experts in the Compensation Sector, an external Post-secondary Recruitment Program was developed and implemented, with a focus on employment equity groups. Eight recruits participated in the program during 2001-2002 through assignments in pay and pension services. The program includes three eight-month assignments and structured training. A Web-based orientation package and welcome guide were completed for the new recruits. Support mechanisms such as coaching and mentoring were also established.

Web Access to Information and Services

In addition to Web site development, which is focused on offering Web-enabled applications and training, PWGSC Compensation has also been working collaboratively with the Treasury Board Secretariat in bringing more services to employees through the Web. Activities included chairing the Benefits, Pay and Pension Domain Committee for the e-HR Web site, and ensuring effective Web linkages to compensation material.

Pension and Insurance Initiatives

Modernization of Pension and Pay Services and Systems - Pension Component

PWGSC Compensation's commitment to deliver pension services more efficiently to Canadians is evident in the activities completed to date as part of the modernization initiative:

• a comprehensive investigation of pension services in large public and private organizations. The purpose was to determine "best practices" and future trends in service delivery methods and technologies that may be adopted by PWGSC Compensation;

• a complete analysis of COTS applications that have been implemented in large public and private organizations. This analysis helped to identify implementation strategies, costs, impacts, risks and lessons learned;

• development of scope statements, preliminary business requirements and rules;

• development of a strategic business focus for future services and systems;

• development of a draft business model to provide a consistent framework for analysis; and

• familiarization with COTS products for customer relations management and pension administration.

The current modernization activities focus on gathering information regarding the feasibility, impact, cost, and risks associated with each technological option. Included with this analysis is the evaluation of tools, such as Imaging and Customer Relationship Management applications, which are required to support the modernized services for members, pensioners, managers, sponsors and administrators. Results from these activities will be used to complete the business case analysis, to define the recommended option, and to prepare the Treasury Board submission.

Communications

A complete review and update of the Superannuation Administration Manual incorporated the special bulletins that were issued over the last three years. The objective was to update the manual directly on the Compensation Web site and to eliminate the need to issue printed bulletins. Some compensation forms were converted to a PDF format and are now available on-line. All PWGSC departmental forms will be changed to a Web based format by 2003-04. A total of 65 pay and benefit forms, such as Election Form for Elective Pensionable Service and Certification Notice-Pension Support System were revised, and 45 new forms were developed.

Your Statement of Pension and Group Benefit Plans

As a precursor to "Your Statement of Pension and Group Benefit Plans" becoming available on the Web, Treasury Board Pension Services and PWGSC Compensation worked together to issue over 231,000 statements in 90 departments and 59 Crown corporations. These statements provided pension plan members with detailed information related to pension benefit entitlements based on complete service history and the salary data for the best consecutive five years. A call centre was established in the Superannuation Directorate to field inquiries related to the information contained in these statements. The call centre operated efficiently to resolve any issues and made necessary corrections to pension plan participants' accounts. The ability to access the statements on-line, thereby reducing the number of paper statements, will be available once security issues are resolved. Until then, the full distribution of paper statements will continue.

Standard Payment System

In March 2002, the Public Service Superannuation System payment issue was successfully converted from the Direct Deposit Interface System to the Standard Payment System (SPS). The conversion to SPS means that all payments are issued through one standardized payment system, thereby giving client departments greater cheque processing flexibility. With the conversion to SPS, the Superannuation Directorate has on-line access to facilitate the interception and replacement of payments, as well as the ability to process a priority payment. Included with the conversion was the standardization of the payment stub, and for those with a net cheque amount of zero, a zero balance statement will be received. The RCMP pay and pension payments were also converted to SPS, with the ability to process paper cheques and direct deposits for small or large volume requirements.

Services Provided on the Web

A Superannuation Web site was created to improve the services to annuitants and their survivors by providing information on-line. Annuitants or their survivors will have the ability to access information kits, forms, publications, frequently asked questions, and an e-mail feedback option whenever and wherever they have an Internet connection. With the implementation of Web security, more functionality will be added such as the ability to change address and bank information on-line. The popularity and success of this Web site are demonstrated by the average number of hits, which exceeded 95,000 each month, from June 2001 to March 2002.

Implementation of a Web-based Pension Benefits Calculator provided pension plan participants with the opportunity to estimate their pension amount based on their average salary and years of service. The number of hits registered on the Pension Benefits Calculator totaled 818,351 during 2001-2002.

Data Integrity - Preliminary Analysis

To ensure the accuracy of pension contributions, and salary and service data from April 1, 2000, (date of introduction of the new pension fund), a pension data repository (PDR) and a data integrity process were developed and implemented. The PDR stores contributions and the associated salary and service on which the contributions are based. The data integrity processes test the relationship between the reported contributions and the salary/service data to ensure the accuracy of the contributions. This year, enhancements to the PDR were implemented to fine tune the data integrity processes. Data integrity tests are performed on a regular basis.

In addition to ensuring the accuracy of contributions, data integrity is essential for supporting the production of an accurate "Your Statement of Pension and Group Benefit Plans". As well, complete historical data integrity is one of the prerequisites for modernizing the systems supporting pension administration. For these reasons, the scope of the Data Integrity Project was expanded in 2001 to include the development of a historical data integrity process. In this regard, a historical data integrity pilot analysis was successfully completed in 2001-2002, resulting in the development of a historical pension data repository (HPDR). Construction is scheduled to begin in 2002-2003. Similar to the PDR, the HPDR will be utilized to test the accuracy and completeness of pre-April 2000 (prior to the new pension fund) pension data.

Post Implementation Cleanup Activities

Pension Reform (Bill C-78) involved several amendments to pension administration under the PSSA, including the introduction of a new fund. In order to implement the legislative changes, PWGSC Compensation had to introduce a variety of system changes. Certain modified functions failed to perform updates as they had prior to these implementations. As a result, the post implementation cleanup activities (PICA) project was established to correct inaccurate data being updated to the Contributor System.

Interface with Crown Corporations Systems

A new "MS Excel" workbook was developed to facilitate the interface between the Crown corporations' human resources and pay systems, and the Contributor system. This innovative tool will automate the reporting of pension data, which was a time-consuming manual process in the past. Training on the use of this new tool was also provided to the staff of various Crown corporations. Controls were put in place for receipts of pension contributions personal payments, and salary/service reject correction processes have been centralized in the Superannuation Directorate.

Financial Controls

Other financial controls implemented include the centralization of all requests for pension data corrections, the reporting of accounts receivable for leave without pay (LWOP) and election payments, and the development of a module to track election payments.

Pension and Insurance Activities

In 2001-2002 PWGSC Compensation successfully performed the following key pension and insurance activities:

• Pension payment services were provided to 214,639 retired members under the PSSA; 104,344 retired members of the Canadian Armed Forces; 13,036 retired members of the RCMP; 444 retired Members of Parliament; and 636 retired judges, or their respective survivors.

• Two reports were completed and are currently available on the Treasury Board Secretariat (TBS) Web site. The first, Triennial Valuation Overview Report, provided an overview on the financial health of the PSSA pension plans, and the second, Annual Report on the Administration of the PSSA, contained detailed financial information on the PSSA.

• Expert advice was provided to compensation advisors in all matters affecting PSSA pension payments. Additionally, bulletins, compensation communiqués, forms advices, articles for the Compensation Focus, and newsletters were distributed. The National Capital Region Applications Program Support (APS) unit answered a total of 6,798 pension related inquiries from compensation advisors across Canada.

• The Superannuation Directorate instituted a number of improvements to client inquiry services by improving messaging and voice mail capabilities, and increasing the number of call centre staff. This resulted in significant reductions in the incidence of abandoned calls. The Directorate responded to 158,000 service and information requests, mainly from pensioners, on its toll-free telephone service.

• Reconciliation of the two pension funds was completed for DND.

• With respect to the RCMP, PWGSC Compensation helped create a migration plan for 3,600 disability accounts to Veterans Affairs Canada, worked on the introduction of SPS, and supported the client on various outsourcing projects.

• Efforts continued to finalize the withdrawal of the Canada Post Corporation (CPC) and the Export Development Corporation (EDC) from the PSSA plan. The CPC withdrew from the PSSA plan on October 1, 2000. A preliminary valuation of the assets accrued on behalf of CPC contributors under the Public Service Pension Fund has been established and an interim transfer of funds (up to 90%) is on schedule. EDC withdrew from the PSSA plan effective April 24, 2000, and approximately 90% of the assets have been transferred to the EDC pension plan, with the final transfer scheduled for completion by July 2002. The amounts of the transfers for both CPC and EDC are subject to PWGSC Superannuation Directorate audit.

Pension and Insurance: Looking Ahead to 2002-2003

The following summarizes the major initiatives scheduled for the next fiscal year:

• The continuation of the modernization of pension service and systems including;
  • the detailed definition of business requirements and rules,
  • the development of future business models,
  • the investigation of potential technological options,
  • the production of business cases, Treasury Board submissions and supporting documents, and
  • the initiation of business process transformation;

• Efforts will continue to enhance the on-line Pension Benefits Calculator. New enhancements such as a Net Pension Calculation feature and Service Buyback Estimator are scheduled to be implemented in 2002-2003. The Net Pension Calculation will allow the estimation of the net pension amount after taxes and voluntary deductions. The Service Buyback Estimator will estimate the cost of purchasing prior pensionable service. "Your Statement of Pension and Group Benefit Plans" service, which will provide electronic salary, service and insurance data to pension plan members on-line, will be implemented following the resolution of security issues;

• Based on the conclusions of the preliminary analysis, the development of a comprehensive data cleanup strategy to correct pension data on accounts where manual intervention is required;

• The completion of the financial framework initiative, which will improve the control and handling of superannuation contributions, and provide faster transmittal of funds to the Pension Investment Board;

• The development of the functionality to automatically calculate and issue commuted value lump sum payments in lieu of ongoing pension benefits to qualified individuals;

• PWGSC Compensation has been mandated by the Treasury Board Secretariat and the Human Resources Forum to obtain approval and support for a study on the delivery of pension services to members under the PSSA. This study will identify:
  • the overall business model,
  • the roles and responsibilities in the new model,
  • the potential impact(s) on the compensation community,
  • the concerns of plan members including strategies to mitigate these concerns,
  • the transition steps to the new model, and
  • the appropriate timing for the transition to the new model.

  A project team and a working group have been formulated, and the completion of the study is expected in December 2002.

Pay Initiatives

Modernization of Pension and Pay Services and Systems - Pay Component

In the fall of 2001, PWGSC Compensation initiated the third phase of the modernization project, the Pay Service Delivery Transformation Study. It will focus on exploring industry best practices, identifying client expectations, developing a future service delivery model, and analyzing potential options and their implications.

Introduction of the Generic Pro Forma Functionality

Construction and implementation of the generic pro forma were completed in December 2001. This enhancement to the RPS introduced new screens that provide regional pay client departments with the ability to complete and link multiple pay transactions in logical business groups. These transactions can now be completed in less time by using fewer key strokes, generate account lists on which to work, and retrieve previously processed transactions for re-use.

Compensation Training Redesign

PWGSC Compensation has been recognized as a pioneer for using an innovative Web-based training medium for our compensation advisors. Client support for insurance and payroll processing was particularly enhanced this year by the adoption of a blended learning strategy that advocates the use of complementary on-line and classroom training. The Web-enabled orientation course for compensation advisors was released to the community and development work was carried out on the Web-enabled advanced pay and insurance courses.

The following chart summarizes the number of training courses provided across the country.

Conversion of the RPS T4 Print Process

The RPS T4 print process was converted to the SPS in October 2001. The SPS system has the flexibility to reprint any spoiled statements of remuneration (T4) based on a unique sequence number assigned to each record. Manual processing has been eliminated, thereby increasing system efficiency and the level of service to our clients.

Canada Savings Bonds Campaign Pilot

The Bank of Canada (BoC) requested the ability to provide bulk input to the RPS for Canada Savings Bonds via magnetic cartridge. The BoC piloted five client departments where employees input their own bond deductions on the BoC Web site. The BoC then provides a magnetic cartridge, once a year, for update to the RPS. The campaign pilot was a tremendous success. The elimination of paper forms and campaign materials saved resources.

Pay Activities

In 2001-2002, PWGSC Compensation delivered the following key pay activities:

• Payments were issued on behalf of 100 clients (departments whose employer is the Treasury Board), separate employers (also considered Public Service), Crown corporations and the RCMP. The number of payments has decreased by .9 million as a result of a reduction in the volume of supplementary pay equity payments, since most of these payments were issued in the previous year.

• Bi-weekly, monthly or supplementary payments were issued in respect to 398 types of entitlements (signing bonus, isolated post allowance, bilingual bonus, etc.), on which 330 types of deductions (union, insurance, additional tax, etc.) were made and remitted to 140 organizations (unions, agencies, provincial governments, credit unions, etc).

Following is a table that depicts the historical trend of pay accounts administered under the RPS since 1993-94 (does not include RCMP).

• PWGSC Compensation processed 1,966 pay runs to issue these payments triggered by a total of 15.1 million pay transactions.

• There were approximately 80,000 requests for pay-related information and guidance from clients.

• In addition, 310 technical system updates were released for production to:
  • meet legislative requirements (new allowances, changes to the Canada Pension Plan and the Quebec Pension Plan regulations, etc.),
  • improve regular system maintenance (tax year end, new year updates, etc.), and
  • make system enhancements (automation of transfers, Contributor System streamlining, on-line pay conversion pro forma).

• PWGSC Compensation continued to provide expertise and training in pay and statutory deductions to ensure the implementation of compensation-related legislation and policies. The Regional Advisory and Training Networks, which are comprised of representatives from headquarters and the regional offices, harmonize the dissemination of compensation policy, procedures and other vital information, and ensure uniformity of compensation practices throughout Canada. Regional communication with compensation clients is accomplished through client inquiries, notifications (bulletins and communiqués), and on-line broadcast messages.

• Continued emphasis was placed on communicating with clients and providing them with tools to help in the accurate and consistent application of compensation policies and procedures. Several publications were also issued, most of them accessible on the following Compensation Sector Web site address: http://www.pwgsc.gc.ca/compensation/text/publications-e.html

Pay: Looking Ahead to 2002-2003

The following are some of the key activities that PWGSC Compensation will be undertaking next year:

• As part of the modernization of pension and pay services and systems, the following will be undertaken:
  • development of future business models,
  • detailed analysis of potential technological options and the resulting implications,
  • development of business cases, Treasury Board submissions and related documents' and
  • the development of detailed definition of business requirements and rules;

• Pay stubs will be accessible to employees on the Internet. The Web-enabled pay stub will provide employees with a two-year display of their personal pay stubs as well as a comprehensive help text explaining the information displayed on the stub. Links to the home pages of major financial institutions will also be provided to enable employees to access their bank accounts. Expected early in 2003, the electronic pay stub should be available once the secure government Public Key Infrastructure is in place;

• The master file in the RPS will be expanded to accommodate additional deduction codes and new tax and pension legislation data fields;

• System enhancements will be undertaken to improve the interface between the RPS and the Canada Customs and Revenue Agency human resources system;

• An electronic interface will be developed to improve integration and efficiency between the RPS and the PeopleSoft Human Resource Management Systems (HRMS). The PeopleSoft Government of Canada HRMS Cluster currently services 20 departments and agencies with common shared interests and requirements in compensation and human resources. The interface is being developed generically and is meant to serve as a base that will allow PWGSC Compensation systems to link to additional government departments' and agencies' human resource systems in the future.

 [Print Version] ( PDF 267k )