Purpose
The purpose of this notice is to inform plan members and employers
participating under the Public Service Management Insurance Plan (PSMIP) of the
premiums required effective January 1, 2002.
Background
Each year, the Board of Trustees reviews the financial operation of the Plan.
Based on this review, the Trustees make recommendations to the Treasury Board
for the changes necessary to ensure that the plan continues to operate in the
best interest of plan members.
On October 4, 2001, the Treasury Board approved the following measures, to
become effective January 1, 2002.
Main Plan
(Employee-paid)
An increase in the cost of Accidental Death and Dismemberment (AD&D)
insurance from $0.10 per unit to $0.275 per unit.
A 20% reduction in the premiums required for Supplementary Life insurance.
Note: The premium holiday for Basic Life insurance will end December 31,
2001. Premiums will resume as per the Rate Chart in Appendix C.
Executive Plan
(Employer-Paid)
A reduction in the monthly premium for Dependants' Insurance from $1.50 to
$1.21.
A reduction in the monthly premium for AD&D insurance from $5.00 to
$2.25.
Members of Parliament Plan
(Employer-Paid)
Cessation of the 9-month premium holiday for Basic Life Insurance.
Continuation of the Dependants and AD&D premium holiday for one year.
Notice to Employees and Premium Rate Chart EffectiveJanuary 1, 2002
The attached Appendices A and B, addressed to Main Plan and Executive Plan
members respectively, outline the above-noted changes for 2002. Also attached as
Appendix C is a chart showing the premium rates effective
January 1, 2002. Please ensure that all members of the Plan are
provided with a copy of this chart.
Administrative Information
Participating employers with their own pay facilities are required to
ensure that premiums remitted to National Life during 2002 are in accordance
with the information on the rate chart.
Enquiries
Human Resources Branch
Treasury Board Secretariat
(613) 957-2400
Enquiries about the PSMIP
Employees with questions about their coverage under the PSMIP should contact
their pay and benefits specialist.
Chiefs of Compensation at the corporate level may call Karen MacGregor at
(613) 957-7189.
Gary Dingledine
Assistant Secretary
Human Resources Management Division
APPENDIX A
NOTICE TO MAIN PLAN MEMBERS
November 2001
The Public Service Management Insurance Plan (PSMIP)
The PSMIP consists of four separate programs, including the Main Plan for
excluded employees, the Executive plan, the Members of Parliament Plan and the
Judges Plan. The Main Plan is funded by employee-paid premiums while the other
three plans are employer/government paid.
Each plan has a number of different lines of insurance, including Basic Life,
Accidental Death and Dismemberment (AD&D), and Dependents' Insurance.
Supplementary Life insurance is the only line common to all four programs and is
always employee-paid. There is a separate fund for each line of insurance. This
means, for example, that the Basic Life premiums deducted from your pay cheque
go into the Basic Life fund, LTD premiums go into the LTD fund, and so on.
Likewise, if a claim for benefits is made under a particular line of insurance,
it is paid out of the fund for that line.
The amount of money paid for claims under the various lines of insurance has
a direct impact on the premium rates for those lines. This "claims
experience" is taken into account when establishing the premiums required
for PSMIP. The Board of Trustees monitors the plan's financial situation each
year to ensure that premium rates continue to provide sufficient income to pay
anticipated claims. If the fund for a particular line of insurance accumulates
too large a surplus because of good claims experience, members will benefit
through premium holidays and reductions in premium rates. By the same token,
premium rates must be increased if claim costs rise.
You will notice some changes in the PSMIP premiums being deducted from your
pay cheque in January 2002. The following information will help you to
understand the reasons for the new amount being deducted.
MAIN PLAN
PREMIUM RATE CHANGES
Employee-paid coverage
Basic Life Insurance:
The premium holiday under the Basic Life Insurance line will end in December
2001. Premium rates in effect prior to the holiday will be reinstated in January
2002. The cost of Basic Life premiums is determined based on your age and sex.
Supplementary Life Insurance
The premium rates for Supplementary Life Insurance will be reduced by 20%
beginning in January 2002.
AD&D Insurance
A number of premium holidays have been in effect over the years, however, due
to claims experience in the year 2000,the premium for AD&D insurance will
have to be increased. For example, the premium for the maximum coverage of
$250,000 will increase from $1.00 to $2.75 per month.
NOTE
The premiums required in 2002 for Dependants' and Long Term Disability
Insurance are unchanged from the rates in 2001.
The attached chart of premium rates PUBLIC SERVICE MANAGEMENT INSURANCE
PLAN 2002 will assist you in calculating your premium deduction and can be
used to compare the cost of coverage with other insurance you might be able to
buy.
Should you wish to make any changes to your PSMIP coverage, please contact
your Compensation Advisor.
APPENDIX B
NOTICE TO EXECUTIVE PLAN MEMBERS
November 2001
The Public Service Management Insurance Plan (PSMIP)
The PSMIP consists of four separate programs, including the Main Plan for
excluded employees, the Executive plan, the Members of Parliament Plan and the
Judges Plan. The Main Plan is funded by employee-paid premiums while the other
three plans are employer/government paid.
Each plan has a number of different lines of insurance, including Basic Life,
Accidental Death and Dismemberment (AD&D), and Dependents' Insurance.
Supplementary Life insurance is the only line common to all four programs and is
always employee-paid. There is a separate fund for each line of insurance. This
means, for example, that the Basic Life premiums paid on your behalf are
deposited into the Basic Life fund, LTD premiums go into the LTD fund, and so
on. Likewise, if a claim for benefits is made under a particular line of
insurance, it is paid out of the fund for that line.
The amount of money paid for claims under the various lines of insurance has
a direct impact on the premium rates for those lines. This "claims
experience" is taken into account when establishing the premiums required
for PSMIP. The Board of Trustees monitors the plan's financial situation each
year to ensure that premium rates continue to provide sufficient income to pay
anticipated claims. If the fund for a particular line of insurance accumulates
too large a surplus because of good claims experience, members will benefit
through premium holidays and reductions in premium rates. By the same token,
premium rates must be increased if claim costs rise.
Under the Income Tax Act, employer-paid life insurance premiums are
considered to be a taxable benefit. This means that the PSMIP life insurance
premiums paid by the government as your employer are considered part of your
income for federal and provincial income tax purposes. AD&D premiums paid on
your behalf are not considered to be part of your taxable income under the
Income Tax Act. However, since Provincial tax laws vary with respect to AD&D
premiums; you should consult your local taxation office to determine the rules
applicable to your province of residence.
EXECUTIVE PLAN
PREMIUM RATE CHANGES
Employer-paid coverage
AD&D Insurance
The employer-paid monthly premium for $250,000 of insurance will be reduced
from $5.00 to $2.25 in January 2002.
Dependants' Insurance
The employer-paid monthly premium will be reduced from $1.50 to $1.21 in
January 2002.
Supplementary Life Insurance (employee-paid)
The premium rates for Supplementary Life Insurance will be reduced by 20%
beginning in January 2002.
NOTE:
The employer-paid premiums required in 2002 for Basic Life and
Post-Retirement Life Insurance are unchanged from the 2001 rates.
The attached chart of premium rates PUBLIC SERVICE MANAGEMENT INSURANCE
PLAN 2002 will assist you in calculating both the premiums paid on your
behalf and your Supplementary Life premium deduction, if applicable.
Should you wish to make any changes to your PSMIP coverage, please contact
your Compensation Advisor.
APPENDIX C
PUBLIC SERVICE MANAGEMENT INSURANCE PLAN (PSMIP)
MONTHLY PREMIUM RATES AT JANUARY 1, 2002
MAIN PLAN (Employee-paid Coverage)
|
BASIC LIFE
(Rates per $1,000 of insured salary)
|
|
SUPPLEMENTARY LIFE
(Rates per $1,000 of insured salary)
|
| AGE GROUP |
MALE |
FEMALE |
|
AGE GROUP |
MALE |
FEMALE |
Under 31
31-35
36-40
41-45
46-50
51-55
56-60
61-65
66-70
71-75
76-80
81 and over |
0.04
0.04
0.07
0.10
0.17
0.28
0.44
0.51
0.26
0.18
0.28
0.42 |
0.03
0.04
0.04
0.07
0.12
0.20
0.31
0.35
0.20
0.14
0.22
0.33 |
|
Under 31
31-35
36-40
41-45
46-50
51-55
56-60
61-65
66-70
71-75
76-80
81 and over |
0.03
0.03
0.04
0.06
0.10
0.18
0.28
0.34
0.17
0.12
0.19
0.29 |
ALIGN="CENTER" 0.02
0.03
0.03
0.05
0.08
0.13
0.21
0.23
0.13
0.10
0.16
0.24 |
DEPENDANTS'
A. Children only: $0.47 flat rate
B. Spouse & children/spouse only¯ |
ACCIDENTAL DEATH &
DISMEMBERMENT (AD & D)
$0.275/$25,000 unit (maximum 10 units)
LONG-TERM DISABILITY (LTD)
$0.70 per $1,000 of insured salary.
The Employer pays 85% of the premium ($0.595) for excluded employees and
100% for Executives and equivalents.
|
| AGE GROUP |
MALE |
FEMALE |
Under 26
26-30
31-35
36-40
41-45
46-50
51-55
56-60
61-65
66-70
71-80
81 and over |
0.47
0.57
0.75
0.95
1.04
1.22
1.41
1.88
2.82
1.41
2.16
3.20 |
0.47
0.66
0.84
1.04
1.22
1.41
1.88
2.82
4.32
2.16
3.38
5.00 |
MONTHLY PSMIP PREMIUM RATES AT JANUARY 1, 2002
| EXECUTIVE PLAN (Employer-paid
Coverage) |
| BASIC LIFE |
$0.25 |
per $1,000 of insurance |
| AD & D |
$2.25 |
for $250,000 of insurance |
| DEPENDANTS' |
$1.21 |
Regardless of family status |
| POST-RETIREMENT LIFE |
$1.45 |
per $1,000 of insurance |
--------------------------------------------------------
MEMBERS OF PARLIAMENT PLAN (Government-paid Coverage) |
| BASIC LIFE |
$0.37 |
per $1,000 of insurance |
| *AD&D |
$9.13 |
for $250,000 of insurance |
| *DEPENDANTS' |
$0.92 |
Regardless of family status |
| POST-RETIREMENT LIFE |
$2.84 |
per $1,000 of insurance |
*Premium Holiday from January 1, 2002 to December 31, 2002
--------------------------------------------------------
JUDGES PLAN (Government-paid Coverage) |
| BASIC LIFE |
$0.90 |
per $1,000 of insurance |
| AD&D |
$2.50 |
for $250,000 of insurance |
| DEPENDANTS' |
$1.50 |
Regardless of family status |
| POST-RETIREMENT LIFE |
$3.80 |
per $1,000 of insurance |
|
