SACCO 2013-001

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Subject: New Pension Legislation 2013 – Contributions and Remittance

Date: September 20, 2013

1. Purpose

1.1. The Purpose of this special advice is to provide Crown corporations and territorial governments, not using the Regional Pay System (RPS), with information regarding the changes to the public service pension plan member and employer contribution rates.

2. Background

2.1. In an attempt to achieve a more balanced cost-sharing ratio between plan members and the Government, the Federal Budget (March 29, 2012) announced that employee contribution rates be increased over time starting January 1, 2013. Royal assent was given to Bill C-45 on December 14, 2012, and these changes became effective on January 1, 2013.

The legislative amendments to the Public Service Superannuation Act (PSSA) allow plan member contribution rates to gradually increase over time to attain an employee to employer cost-sharing ratio of 50:50.

This is to inform you that employees who become new plan members on or after January 1, 2013 are subject to different PSSA rules. Both employee and employer contribution rates differ between the two distinct groups of plan members. Therefore, there is a need to distinguish employees who become new members on or after January 1, 2013.

3. Policy

3.1. In 2012, members contributed to the public service pension plan at the following rates:

6.2% on pensionable earnings up to the maximum pensionable earnings (YMPE) ($50,100 for 2012);
8.6% on pensionable earnings in excess of the maximum pensionable earnings (YMPE) ($50,100 for 2012);
1% on pensionable earnings for employees with 35 years of service.

Note: There is no change to the pension entitlements of current pre-2013 plan members.

3.2. Commencing January 1, 2013, the contribution rates for plan members who were participating in the plan prior to 2013, will increase each year until 2015 as follows:

Table Summary

Following is the table that contains the contribution rates for plan member who were participating in the plan prior to 2013, commencing in January 2013 and with each year's increase until 2015.

Based on the YMPE covered by the Canada Pension Plan (CPP) or Quebec Pension Plan (QPP)	2012	2013	2014	2015
on earnings up to the YMPE ($51,100 for 2013)	6.20	6.85	7.50	8.15
on earnings over the YMPE ($51,100 for 2013)	8.60	9.20	9.80	10.40

3.3. Commencing January 1, 2013, new plan members will contribute to the public service pension plan at the following rates:

Table Summary

Following is the table that contains the contribution rates for new plan members, commencing in January 2013 and with each year's increase until 2015.

Based on the YMPE covered by the CPP/QPP	2013	2014	2015
on earnings up to the YMPE ($51,100 for 2013)	6.27	6.62	7.05
on earnings over the YMPE ($51,100 for 2013)	7.63	7.89	8.54

3.4. As a result, your business processes must identify employee and employer contributions for existing pre-2013 plan members and new members who join the plan on or after January 1, 2013 and report these amounts separately via the PWGSC-TPSGC 2292 “Monthly Remittance of Superannuation Contributions (Public Service Corporation)” form.

3.5. The Data Capture Tool (DCT) continues to be used for submitting employee data and information to the Penfax system using current procedures. This special advice should also be read in conjunction with the following documents:

Note: Future enhancements to the Data Capture Tool (DCT) to introduce new pension type codes to identify new plan members will be communicated via a subsequent Special Advice to Crowns.

3.6. Leave Without Pay Deficiencies

The need to distinguish employees who become new members on or after January 1, 2013 also applies to pension contributions for periods of leave without pay (LWOP). As a result, the PWGSC-TPSGC 2292 “Monthly Remittance of Superannuation Contributions (Public Service Corporation)” form has been amended to ensure that any LWOP amounts are reported separately for existing pre-2013 plan members and new members who join the plan on or after January 1, 2013.

Plan members should be referred to the leave without pay defficiency section of the Your Public Service Pension and Benefits Web portal for information on the pension impacts of taking a leave of absence and to update their address on line. They can also contact the Pension Centre.

3.7. Service Buyback

The need to distinguish employees who become new members on or after January 1, 2013 also applies to pension contributions for service buyback (election) deductions. As a result, the PWGSC-TPSGC 2292 “Monthly Remittance of Superannuation Contributions (Public Service Corporation)” form has been amended to ensure that any service buyback amounts are reported separately for existing pre-2013 plan members and new members who join the plan on or after January 1, 2013.

Plan members should be referred to the pension increase section of the Your Public Service Pension and Benefits Web portal for information on Service Buyback. They can also contact the Pension Centre.

4. Procedures and Instructions

4.1. Eligibility to Contribute

Employers continue to apply the public service pension plan rules of eligibility to commence contributions and to input the appropriate employee and pension type codes into the DCT. This is done at various times during a plan member's career, such as at initial hiring, completion of the six-month qualifying period, where there is a change in employment conditions and/or status (e.g. a change in an assigned work week to more than 12 hours, or a change in employment status that would affect an employee's eligibility to participate in the plan).

4.2. Remittances

A separate breakdown of contributions for existing pre-2013 plan members and new members who join the plan on or after January 1, 2013, must be provided on monthly remittances. There are additional reporting requirements for service buyback payments and deficiency payments for new plan members on the amended PWGSC-TPSGC 2292 “Monthly Remittance of Superannuation Contributions (Public Service Corporation)” form.

The following table contains Public Service Corporation contribution types and employer rates effective January 1, 2013 for existing pre-2013 plan members.

Table Summary

Following is the table that contains the Public Service Corporation contribution types and employer rates effective January 1, 2013 for existing pre-2013 plan members.

Contribution Type	Employer Rate
Current Service	1.64 × employee contribution (Pension Fund) 8.00 × employee contribution (Retirement Compensation Arrangement (RCA))
Elective/LWOP single rate	1.64 × employee contribution (Pension Fund Single Rate) 8.00 × employee contribution (RCA Single Rate)
Elective/LWOP double rate	0.32 × employee contribution (Pension Fund Double Rate) 3.50 × employee contribution (RCA Double Rate)

The following table contains Public Service Corporation contribution types and employer rates effective January 1, 2013 for plan members who join the plan on or after January 1, 2013.

Table Summary

Following is the table that contains the Public Service Corporation contribution types and employer rates effective January 1, 2013 for plan members who join the plan on or after January 1, 2013.

Contribution Type	Employer Rate
Current Service	1.57 × employee contribution (Pension Fund) 8.00 × employee contribution (RCA)
Elective/LWOP single rate	1.57 × employee contribution (Pension Fund Single Rate) 8.00 × employee contribution (RCA Single Rate)
Elective/LWOP double rate	0.29 × employee contribution (Pension Fund Double Rate) 3.50 × employee contribution (RCA Double Rate)

Public Service Corporations are expected to match employee contributions at the appropriate relevant rate starting January 1, 2013 starting with the first pay period of 2013. It is recognized that, in general, January 1st is not at the beginning or end of a pay period. Public Service Corporations are expected to determine the percentage of the remittance that should be credited to each fund and to adjust the remittance accordingly at the organizational level.

Examples:

For existing pre-2013 plan members PSSA – Bi-weekly pay

December 20 to 31, 2012: 6.2% on pensionable up to the 2013 threshold ($51,100);
January 1 to 2, 2013: 6.85% on pensionable earnings up to the 2013 threshold ($51,100);

For existing pre-2013 plan members RCA - Bi-weekly pay

December 20 to 31, 2012: 8.6% on pensionable earnings in excess of the 2013 threshold ($150,900);
January 1 to 2, 2013: 9.20% on pensionable earnings in excess of the 2013 threshold ($150,900);

For plan members who join the plan on or after January 1, 2013 PSSA

January 1 to 2, 2013: 6.27% on pensionable earnings up to the 2013 threshold ($51,100);

For plan members who join the plan on or after January 1, 2013 RCA

January 1 to 2, 2013: 7.63% on pensionable earnings in excess of the 2013 threshold ($150,900);

The PWGSC-TPSGC 2292 “Monthly Remittance of Superannuation Contributions (Public Service Corporation)” has been redesigned to reflect the split between existing plan members and new plan members who join the pension plan on or after January 1, 2013.

The form consists of five sections. Annex A provides instructions on how to complete each of the sections.

5. Forms

5.1. Once completed, the PWGSC-TPSGC 2292 form should be sent to the following address or fax number:

Government of Canada Pension Centre
Employer Support Services - Mail Facility
150 Dion Blvd
PO Box 9000
Matane QC
G4W 0C6
Fax: 418-566-2757

6. Inquiries

6.1. Any inquiries on the information contained in this document should be addressed to the Employer Support Services at the Government of Canada Pension Centre.

Original Signed by
Carrie E. Roussin

Carrie E. Roussin
Director General
Compensation Sector
Accounting, Banking and Compensation

Reference: 9213-15

ANNEX "A"

Section 1: PSPF (Public Service Pension Fund)

Subsection A: All existing plan members contributing to the public service pension plan on or before December 31, 2012

Line 5: Employee contributions for current service (6.85% for 2013 on salaries up to the Yearly Maximum Pensionable Earnings (YMPE) ($51,100 for the 2013 taxation year) and 9.2% on salaries in excess of the YMPE; this line should also contain any retroactive or lump sum payments for the year in question; this will also include contributions for employees with more than 35 years service (i.e. 1%)).

Line 6: Employee contributions for LWOP or on loan service--Single rate (reminder that LWOP and elective service are reported separately).

Line 7: Employee contributions for elective service--Single rate (note that all elections signed after March 31, 2000, even for service prior to April 1, 2000, will be recorded here)

Line 8: Employee single rate contributions requiring employer remittance (total of lines 5 to 7)

Line 9: Employer contributions--Single rate (line 8 × applicable single matching rate) [1.64 for 2013]

Line 10: Employee contributions for prior year 1 (identify year) × the applicable single matching rate.

Line 11: Employee contributions for LWOP or on loan service--Double rate

Line 12: Employee contributions for elective service--Double rate

Line 13: Employee double rate contributions requiring employer remittance (total of lines 11 and 12)

Line 14: Employer contributions--Double rate (line 13 × applicable double matching rate)[0.32 for 2013]

Subsection B: New plan members who join the public service pension plan on or after January 1, 2013

Line 15: Employee contributions for current service (6.27% for 2013 on salaries up to the Yearly Maximum Pensionable Earnings (YMPE) ($51,100 for the 2013 taxation year) and 7.63% on salaries in excess of the YMPE;

Line 16: Employee contributions for LWOP or on loan service--Single rate

Line 17: Employee contributions for elective service--Single rate

Line 18: Employee single rate contributions requiring employer remittance (total of lines 15 to 17)

Line 19: Employer contributions--Single rate (line 18 × applicable single matching rate) (1.57 for 2013)

Line 20: Employee contributions for prior year 1 (identify year) x the applicable single matching rate

Line 21: Employee contributions for LWOP or on loan service--Double rate

Line 22: Employee contributions for elective service--Double rate

Line 23: Employee double rate contributions requiring employer remittance (total of lines 21 and 22)

Line 24: Employer contributions--Double rate (line 23 × applicable double matching rate) (.29 for 2013)

Line 25: Total contributions credited to the PSPF (total of lines 8, 9, 10, 13, 14, 18, 19, 20, 23 and 24)

Section 2: PSSA (Public Service Superannuation Account)

Line 26: Employee contributions for current and retroactive service prior to April 1, 2000

Line 27: Employee contributions for LWOP or on loan service--Single rate

Line 28: Employee contributions for elective service--Single rate

Line 29: Employee single rate contributions requiring employer remittance (total of lines 26, 27 and 28)

Line 30: Employer contributions--Single rate (line 29 × applicable single matching rate) [1.64 for 2013]

Line 31: Employee contributions for LWOP or on loan service--Double rate

Line 32: Employee contributions for elective service--Double rate

Line 33: Total contributions credited to the PSSA (total of lines 29 to 32)

Section 3: RCAA (Retirement Compensation Arrangement Account)

Subsection A: All existing plan members contributing to the public service pension plan on or before December 31, 2012

Line 34: Employee contributions for current service [9.2% for 2013]

Line 35: Employee contributions for LWOP or on loan service--Single rate

Line 36: Employee contributions for elective service--Single rate

Line 37: Employee single rate contributions requiring employer remittance (total of lines 34, 35 and 36)

Line 38: Employer contributions--Single rate (line 37 × applicable single matching rate) [8.00 for 2013]

Line 39: Employee contributions for prior year 1 (identify year) × the applicable single matching rate

Line 40: Employee contributions for prior year 2 (identify year) × the applicable single matching rate

Line 41: Employee contributions for LWOP or on loan service--Double rate

Line 42: Employee contributions for elective service--Double rate

Line 43: Employee double rate contributions requiring employer remittance (total of lines 41 and 42)

Line 44: Employer contributions--Double rate (line 43 × applicable double matching rate) [3.50 for 2013]

Subsection B: New plan members who join the public service pension plan on or after January 1, 2013

Line 45: Employee contributions for current service [7.63% for 2013]

Line 46: Employee contributions for LWOP or on loan service – Single rate

Line 47: Employee contributions for elective service--Single rate

Line 48: Employee single rate contributions requiring employer remittance (total of lines 45, 46 and 47)

Line 49: Employer contributions--Single rate (line 48 × applicable single matching rate) [8.00 for 2013]

Line 50: Employee contributions for prior year 1 (identify year) × the applicable single matching rate

Line 51: Employee contributions for LWOP or on loan service--Double rate

Line 52: Employee contributions for elective service--Double rate

Line 53: Employee double rate contributions requiring employer remittance (total of lines 51 and 52)

Line 54: Employer contributions--Double rate (line 53 × applicable double matching rate) (3.50 for 2013)

Line 55: Total contributions credited to the RCAA (total of lines 37, 38, 39, 40, 43, 44, 48, 49, 50, 53 and 54)

Section 4: SDBA (Supplementary Death Benefit Account)

Line 56: Employee SDB contributions (currently $0.15 per $1,000 of coverage)

Line 57: Employer SDB contributions (currently $0.04 per $1,000 of the basic benefit)

Line 58: Total contributions credited to the SDBA (Note: Please do not remit provincial sales tax on Supplementary Death Benefit [SDB] premiums.) [total of lines 56 and 57]

Section 5: Total Remittance and Certification

Line 59: Total Remittance (total of lines 25, 33, 55 and 58)