Annual Report 1999/2000

Highlights

The Compensation Business Line (CBL) staff met the 1999-00 challenges and achieved the forecasted results. We moved into the year 2000 without any problems. System changes and contingency plans, put in place to respond to potential problems related to the year 2000 transition, made it almost a non-event. Changes to our Pension and Pay systems—a response to the new pension reform legislation—were implemented in April 2000 and achieved their objective.

Programming changes for the new round of collective bargaining, implemented with few problems, improved retroactive payment processes and provided additional support to our clients.

We met the significant challenges of the Government Pay Equity settlement; implemented system and process changes on time; and, in April 2000, made the first payments to 230,000 former and current employees.

• Implemented the compensation provisions of 169 new collective agreements, 141 of which were on behalf of Separate Employers.

• Completed the adjustments to compensation systems aimed at meeting the provisions of the Federal and Provincial budgets, and supported the second wave of departments moving to the Financial Information Strategy (FIS).

• Implemented specific activities to automate the transfer of employees between departments; upgraded the contributor system edits and data integrity; and finalized the automation of compensation manuals.
  
  
• Developed a mechanism to permit the routing of the Pension Fund contributions to the newly created Pension Investment Board, to help the development and implementation of an improved financial management and control framework.
  
  
• Continued to provide a high level of service through its various Regional Offices (supported by the headquarters component) to ensure that the day to day business of running a complex compensation environment was uninterrupted.
  

It was a busy year and the Business Line staff was up to the challenge. We expect that this pace will continue for the foreseeable future. Our next challenge will be to maintain the current level of service, while implementing the changes required to move into the 21st century.

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

Diane Riou
A/Director, Pay Operations and Service Management Directorate
Compensation Sector
Public Works and Government Services Canada
Room 2060A, Main Building, Tunney's Pasture
Ottawa, Ontario
K1A 1G7

Table of Contents

1.0 A few words about the Compensation Business Line

The Compensation Business Line (CBL) administers government payroll, pension and insurance processes, including the development and maintenance of computer systems and a national service office infrastructure. CBL's work allows departments to administer pay and benefits in accordance to the collective agreements and compensation policies. The agreements and policies were established by the Treasury Board and certain Separate Employers to fulfill the requirements of the Public Service Superannuation Act.

The CBL also provides specialized pension services for the administration of the superannuation plans to the Department of National Defense (DND) and the Royal Canadian Mounted Police (RCMP).

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

While GTIS manages the informatics aspect of compensation services, the Superannuation Directorate is responsible for the delivery of the Public Service Superannuation Act (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.

The Compensation Business Line costs and volumetrics for Pay, Pension and Insurance are provided in the Appendices, under sections 8 and 9 of this report.

Summarized below is a statement of objective, commitments, strategies and key activities of the CBL. Developed in 1999-00, these are included in PWGSC's Report on Plans and Priorities. Progress with regard to these commitments, strategies and key activities is outlined in this document under "Ongoing Accomplishments" and "Strategies and Key Activities: Results"—section 3.0 for Pay, and section 5.0 for Pension and Insurance.

Objective and Commitments

Our objective is to provide compensation services to government departments, agencies and public servants. Our commitments include:

• Implementation of the compensation provisions of the collective agreements and policies of the federal government;
• Cost-effective payroll operations, pension plan administration, and systems infrastructure;
• Accurate payments, tax remittance, and collection of contributions.

Strategies and Key Activities

In 1999-00, the Public Service Compensation Business Line focused on the following strategies and key activities:

Year 2000 activities

These activities involved obtaining year 2000 accreditation for the government compensation and superannuation systems, including related support systems. These systems are government-wide and their successful conversion to year 2000 was considered mission-critical.

Supporting Public Service Reform

This initiative involves supporting the development of Alternative Service Delivery agencies across government; implementing Pay Equity, Collective Bargaining Agreements, and the Universal Classification Standard (UCS); participating in the implementation of the Financial Information Strategy (FIS); and implementing the Federal and Provincial Budget Measures, including Canada and Quebec Pension Plans and Tax Reform.

Another government initiative in Human Resource Management is aimed at revising the pension plans for the Public Service, the Royal Canadian Mounted Police (RCMP) and the Department of National Defence (DND).

Improving service and reducing costs through investment in technology

The CBL will gear its service improvements toward reducing work in process in regional offices and improving control of the Transfer Value workload process for pension administration. In addition, the CBL will invest in technology by supporting several initiatives: the implementation of Electronic Data Interface (EDI) for payroll remittances, the continuation of the automation of compensation manuals, the upgrade of the Contributor and Annuitant Systems, and the creation of a Compensation Integrated Testing Environment.

Operating with integrity, openness and responsiveness

Over the planning horizon, the Business Line will use several approaches to encourage dialogue with the compensation community. These include continued participation in the Association of Compensation Managers and close consultation with the Treasury Board with regard to major projects, and legislative or system changes.

The CBL administers Public Service pay by providing a national service infrastructure to enable departments, Separate Employers and Crown Corporations to administer pay and benefits in accordance with the relevant collective agreements and compensation policies. Our regional offices are located in six cities:

• Atlantic Region: Darmouth, Nova Scotia
• Quebec Region: Montréal, Quebec
• NCR Region: Ottawa, Ontario
• Ontario Region: Scarborough, Ontario
• Western Region: Edmonton, Alberta
• Pacific Region: Vancouver, British Columbia

The Department of Public Works and Government Services Act directs that PWGSC provide compensation services to persons employed in or by any government department, and to persons employed in or by any other portions of the Public Service of Canada, as the Governor in Council may direct. This means that PWGSC is mandated to pay departments and agencies listed in Section I.I of the Public Service Staff Relations Act. Agencies listed in Section I.II of the Act, and the Crown Corporations are not subject to the Act but optional clients. The CBL has also provided specialized pay services to National Defense, Solicitor General, House of Commons and Justice. Due to the current government-wide growth in Public Service employment, the number of pay accounts remunerated by the Regional Pay System has not only stopped decreasing but started to increase.  On March 31, 2000, there were 234,811 pay accounts — a 10,701 increase from March 31, 1999.

3.2 Ongoing pay accomplishments

The CBL issued 7.5 million payments on behalf of 95 client departments from the Public Service, Separate Employers and Crown Corporations.

The CBL issued biweekly, monthly or supplementary payments in respect to the 279 types of entitlements (signing bonus, isolated post allowance, bilingual bonus, etc.); 274 types of deductions (union, insurance, additional tax, etc.); and 130 remittances (unions, agencies, provincial governments, credit unions, etc.)

The Compensation Sector processed 2,027 regular and supplementary pay runs to issue these payments triggered by a total of 11.4 million pay transactions of which 50.3% were automated by the Regional Pay System (RPS).

In addition, the CBL released some 405 technical system updates for production to meet legislative requirements (new allowances, changes to CPP/QPP regulations, etc.); regular system maintenance (tax year end, new year updates, etc.); and system enhancements (automation of transfers, contributor system streamlining, on-line pay conversion pro forma).

The CBL 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 composed 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 such as bulletins, communiqués and on-line broadcast messages.

The CBL placed emphasis on communicating with our clients and providing tools to help them in the accurate and consistent application of compensation policies and procedures. The CBL also issued several publications, most of them accessible on the Compensation Sector Web site: http://www.pwgsc.gc.ca/compensation/text/publications-e.html . Among our publications are amendments to the Personnel-Pay Input Manual, Compensation Directives, Compensation Communiqué and Forms Advice, Compensation Focus and newsletters — the last two were published in hard copy. In addition, to support the Web-enabled manuals, a transitional forms manual was released in May and some 28 pay forms were revised and subjected to a quality assurance process.

  3.3 Strategies and Key Activities: Results

The work of the CBL contributes to the fulfillment of PWGSC objectives and GOS' business strategy, which have been organized around the following themes:

• Supporting Public Service Reform
• Improving service through investment in technology
• Operating with integrity, openness and responsivenes

Year 2000 activities

The calendar year 1999 was a pivotal one for the Compensation Sector Year 2000 project team. The team tested the government-wide mission critical systems such as Regional Pay, Contributor, the RCMP Pay and the Standalone PC Systems, and implemented them into production. In June 1999, all Compensation Sector government-wide mission critical systems successfully completed year 2000 compliant platform lab testing. Each application received year 2000 accreditation, certifying it operational for the year 2000 and beyond.

The CBL also developed the Contingency and Business Resumption plans to deal with potential problems that could have occurred during the transition. In the end, January 1, 2000 startup of all of our compensation applications was a complete success. Our clients did not experience any major problems and there was no disruption of work.

Alternative Service Delivery

The Business Line continued its support of Alternative Service Delivery agencies with the successful conversion of the Custom and Revenue Agency and the Canadian Parks Agency employee accounts.

Collective Bargaining

The CBL implemented the provisions and rates of pay of the 27 new collective agreements negotiated by the Treasury Board, and the 141 new collective agreements negotiated by Separate Employers, within the legislated 90 day implementation period.

Pay Equity

In 1999, the CBL established a Pay Equity Project Team to complete business line activities to issue retroactive payments to 260,000 former and current PSAC members and increase the basic rates of pay. This involved significant modifications to the Regional Pay and Contributor systems and the coordination of activities in the client Departments to ensure employee salary history files were validated for the initial payments.

Federal and Provincial Budgets

The CBL adjusted the systems to implement federal and provincial budget measures, including the Canada and Quebec Pension Plans and Tax Reform.

Financial Information System

The CBL continued to provide support to departments moving to FIS. Thirty-five government departments have now implemented FIS compliant systems.

In addition to the completion of year 2000 changes to the system infrastructure, the Business Line continued its efforts to improve service and reduce cost to government through investment in technology. To this end, the CBL implemented specific activities, including automating the process used to transfer employees between departments; moving remittance payments to electronic payment methods; upgrading the contributor system edits and data integrity; and finalizing the automation of compensation manuals.

In 1999-00, the CBL completed a client consultation process (exploring the priority of specific system initiatives) and initiated system changes to address key priorities related to the transfer process and retroactive payments associated with collective bargaining changes. Close cooperation among Treasury Board, Separate Employers, departments and the Association of Compensation Managers, has assisted the Business Line in identifying its work priorities. The Business Line continued to improve the Performance Management Framework, and presented the "Performance Management Framework in Government Operational Service 1999-00" report to the Business Board on June 6, 2000.

The following are some of the key activities that the Compensation Business Line will be undertaking next year.

• Pay Equity retroactive payments, interest payments and payments for Separate Employers
• Universal Classification Standard new groups and salaries
• Implementation of Tax on Income
• Improvement of Computer-based Training Orientation Course
• Response to Client Consultation
• Initiation of a project to move RCMP Pay into Regional Pay System
• Implementation of the remaining FIS-compliant clients for Public Service Pay and a FIS compliant process for RCMP Pay
• Completion of study leading to a strategy to modernize compensation systems

As program sponsor, the Treasury Board Secretariat delegated the management of pensions under the Public Service Superannuation Act (PSSA), the Canadian Forces Superannuation Act (CFSA), the Royal Canadian Mounted Police Superannuation Act (RCMPSA), the Members of Parliament Retirement Act (MPRA), and the Judges Pension to PWGSC's Compensation Sector.

Public Service Superannuation Act (PSSA)

The administration of pension operations for PSSA is the responsibility of the Superannuation Directorate in Shediac, New Brunswick. The directorate is under the line direction of the Atlantic Region and receives functional direction from the GOS Compensation Sector. The GOS and GTIS operate and maintain mainframe systems for the storage of contribution information; salary and service records of public servants and employees of Crown corporations; and other related information. The CBL provided pension payment services to 215,200 retired PSSA members.

CFSA, RCMPSA, MPRA and Judges Pension

The Department of National Defense (DND) is the program authority for Canadian Forces Superannuation and as such is responsible for calculating benefits, counseling members and providing legislative and policy interpretation for issues affecting superannuation. The Compensation Sector in GOS, based on payment data provided by National Defense, provides pension payment services for retired members of the Canadian Forces. The Compensation Sector maintains files, calculates and pays benefits to members of the RCMP or their survivors using two licensed commercial software packages, and maintains contributor accounts. The Business Line also administers benefits to retired Members of Parliament or their survivors under the Members of Parliament Retiring Allowance Act, and administers the payment of pension benefits for retired Government of Canada judges. Over the last fiscal year, the CBL provided pension payment services to 102,190 retired members of the Canadian Forces; 11,240 retired members of the RCMP; 433 retired Members of Parliament; 611 retired judges; or their respective survivors.

Insurance Operations

The Compensation Sector, the Regional Pay Offices and the Superannuation Directorate share the responsibilities for the administration of the Disability Insurance (DI); the Public Service Management Insurance Plan Disability Insurance (PSMIP-DI); the Public Service Health Care Plan (PSHCP); the Dental Care Plan (DCP); and the Public Service Management Insurance Plan - Long Term Disability (PSMIP-LTD). These activities include interpreting policies and processes; developing or updating procedures manuals; maintaining files; processing transactions; processing casework; providing accounting and remittance services; delivering training; and providing advisory services.

Public Service Superannuation

In recent years the Superannuation Directorate has seen record volumes of incoming work. Activities such as the Early Retirement Incentive and the Early Departure Incentive programs and the departure of Nav Canada have now concluded, serving to regularize workloads volumes.

This reduced incoming workload has allowed the Superannuation Directorate to refocus its efforts in a number of other key areas. The Directorate supported pension reform activities (developing business requirements, functional specifications and systems testing), and Alternative Service Delivery initiatives (including the documentation of business requirements for the Canada Post Corporation withdrawal); and made progress with regard to Collective Bargaining recalculation of benefits and retroactive payments.

The Directorate completed activities related to the performance management framework including reviewing, defining and expanding the service levels indicators. The customer relations staff answered a total of 145,878 telephone calls, some of which were associated with Bills C-71 and C-78, new legislation and future dental plan for pensioners.

The Backlog Reduction chart reveals a major reduction in backlog level during 1999-00 (22 %).

The CBL continued to provide expert advice to pensioners and compensation advisors in all matters affecting pension payments. The Directorate issued a total of 21 notices/mail outs to pension beneficiaries, and the Compensation Sector added several manuals to the Web site: the Superannuation procedures manual for personnel offices serviced by the Regional Pay System (PER) and Public Service Corporations (PSC), the Superannuation Administration Manual and the Pension Support System manual. These manuals can be found at: http://www.pwgsc.gc.ca/compensation/text/pen-toc-e.html .

The CBL has developed and revised several communication and working tools including bulletins, compensation communiqué and forms advice, articles for the Compensation Focus, and newsletters. The CBL made an extensive effort to update the pension forms for the Pension Reform requirements, and the automation of forms project. Finally, the CBL developed some 70 new pension forms, revised 63 more, and reviewed approximately 300 others using its quality control process.

The work of the CBL contributes to the fulfillment of PWGSC objectives and GOS' business strategy, which have been organized around the following themes:

• Supporting Public Service Reform
• Improving service through investment in technology
• Operating with integrity, openness and responsiveness

Year 2000 activities

The Pension systems (Judges, CFSA, PSSA) and the stand alone systems, SMIRS (Superannuation Master Index Retrieval), ESTEL (Estimate and Election), EOC (Estimate of Cost) and Pension Division (PDS), received their year 2000 compliance accreditation from the Year 2000 Project Office.

Pension Reform

The Compensation Business Line played a major role in supporting Public Service Reform in the revision of pension plans prompted by Pension Reform legislation. Two Bills (C-71 and C-78) were passed in 1999-00 affecting the administration of the PSSA, CFSA and RCMPSA. The Business Line was responsible for making changes to the automated systems (with the exception of the Canadian Forces regular pay system) that support these three Superannuation Acts. The CBL created a Pension Reform Project Team to implement these changes. The team introduced the necessary modifications, on schedule at various points during 1999-00. One of the highlights is the creation of a Public Service Pension Fund (separate from the existing PSSA account) — a mechanism to permit the routing of the Pension Fund contributions to the newly created Pension Investment Board for investment purposes, and the development and implementation of an improved financial management and control framework.

Alternative Service Delivery

CBL completed activities related to Human Resources Development Canada (HRDC) transfer for the province of Manitoba, and prepared transfer estimates for former HRDC employees who transferred to the Province of Alberta under the Labour Market Development Agreement. The CBL completed the Ottawa Airport and the DND Medical Centre Transfers at the end of 1999. The CBL continued processing Nav Canada accounts, and a cheque was issued on December 1, 1999. CBL's work continued on other Alternative Service Delivery initiatives such as Sir John Franklin School Board and Québec and Winnipeg Airports. The Directorate also supported Canada Post Corporation withdrawal, including the documentation of business requirements.

Collective Bargaining

The new collective agreements created the need to recalculate 10,676 annuities and produce retroactive payments.

Contributor System Streamlining

In order to meet Pension Reform legislation requirements, the Business Line determined that enhancement to the Contributor System should be completed prior to implementation. The project to streamline the Contributor System identified two main areas of concern: the need to merge two masters into one database master, and the need to convert multiple account identifiers to one key element the Personal Record Identifier (PRI). The benefits of this streamlining include a decrease in the system's down time and improvements in the processes associated with key identifiers within the Contributor System. The CBL has given top priority to resolve the specific problems encountered during the development of the project — pension calculations, salary, service and screening .

Financial Management and Control Framework

The Public Service Pension Fund (PSPF), which is separate from the existing Public Service Superannuation (PSS) Account, was established April 1, 2000. The PSPF contributions made after April 1, 2000 are to be invested by the new Pension Investment Board. Administrative costs are charged to either the PSS or the PSPF account, according to a special formula. The Financial Management and Control Framework was developed to ensure that a sufficient amount of financial control is exerted over the PSPF.

Performance Management Framework

Performance measures for the PSSA pension products have been developed on predetermined key results areas, namely Client Service, Organizational Health, Delivery Infrastructure, Horizontal Issues and Financial Performance. Formal reporting on these items commenced in 1999-00.

The following are the main activities to be undertaken in 2000-01

• Completion of a study leading to a strategy to modernize compensation systems
• Pension Calculator accessible on the Web site
• Business and technical architecture design for Web-based Employee Benefit Statement
• Issuance of hard copy Employee Benefit Statement
• Implementation of a Pension Repository Data System for pension reconciliation and conduct of integrity test of individual salary, service and contributor data
• Recalculation of annuities and issuance of retroactive payments as a result of Pay Equity
• Canada Post Corporation withdrawal from the PSSA as per Bill C-78 legislation
• Financial Framework Infrastructure improvement
• Implementation of Tax on Income

During fiscal year 1999-00, the CBL utilized learning plans and competency profiles to develop comprehensive training schedules for its employees. The CBL also reviewed and evaluated the Universal Classification Standard work descriptions for all positions. Preliminary planning aimed at developing organizational structures adapted to the new environment continues.

The Business Line pursued several initiatives to develop a work force with diverse skills that is prepared to meet the challenges of the changing workplace. The Compensation Sector Employees' response to the Public Service survey was favourable. They identified areas for improvement and will pursue them through Human Resources initiatives such as extended management meetings, information sessions and formal training.

The Survey Themes tables represent the percentage of all survey responses rated at the first and second highest levels of employee satisfaction. Overall, the results were positive and in line with branch, departmental and public service results.

Appendix 1 Pay - Compensation Business Line Costs

Appendix 2 Compensation Client Department Advisors/PWGSC Pay Agents

Appendix 3 Pay and Dental Care Plan Volumetrics

Appendix 4 Training Volumetrics

Pay - Compensation Business Line Costs

Cost of Payroll Delivery

PWGSC Compensation Pay Agents

Pay Volumetrics

95 Payroll Clients

64 PSRRA I.I
19 PSSRA I.II
12 Other

Pay Accounts

163,971 PSSRA I.I
65,455 PSSRA I.II
5,385 Crown Corporations and Agencies
16,777 RCMP

Annual Payments

7.0 million Public Service
0.5 million RCMP

Direct Deposit Participation Rates

90.7% Public Service Pay
91.0% RCMP Pay

Complexity

4 different pay cycles
279 types of entitlements
274 types of deductions
99 collective agreements
130 remittance agencies

Training Volumetrics

Participants Training 1999-00

Courses 1999-00

Appendix 1 Compensation Business Line Costs - Pension

Appendix 2 Pension Volumetrics

Appendix 3 Insurance Volumetrics

Appendix 4 Training Volumetrics

Pension - Compensation Business Line Costs

Pension Volumetrics

PSSA Clients

95 Pay and Pension Clients
55 Pension-only Clients

Annuitant Accounts

Insurance Volumetrics

Public Service Health Care Plan (PSHCP)

410,208 accounts

Public Service Management Insurance Plan (PSMIP)

Training Volumetrics

Participants Training 1999-00

Courses 1999-00

Region	Ongoing	One-time	Total
Atlantic	26	19	45
Quebec	32	10	42
National Capital	129	41	170
Ontario	41	33	74
Western	28	16	44
Pacific	24	16	40
Totals	280	135	415

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