SACCO 2016-001

Subject: Pension legislation 2013—Updates to the Data Capture Tool

Date: May 11, 2016

1. Purpose

1.1. The purpose of this special advice is to provide direction to Crown corporations and territorial governments, not using the new Phoenix pay system which replaced the Regional pay system, with Data Capture Tool (DCT) instructions for reporting pension information required due to changes in Pension Legislation that came into force in 2013. As a result, new codes to identify pension plan members will need to be entered into the DCT as of Release 6.0 of the Government of Canada Pension Modernization Project, which is scheduled for July 1, 2016.

1.2. This special advice is a follow up to this document:

• SACCO 2013-001 entitled “New pension legislation 2013—Contributions and Remittance”

It should also be read in conjunction with the following documents:

• SACCO 2011-003 Government of Canada Pension Modernization Project (GCPMP)—Release 2.0.1—Impact on systems, business processes and procedures"
• Archived SACCO 2010-001 entitled "Government of Canada Pension Modernization Project (GCPMP)—Release 2.0 (Contributors)"
• Archived SACCO 2010-002 entitled "Government of Canada Pension Modernization Project (GCPMP)—Release 2.0—New Secure Crown corporation portal"
• Archived SACCO 2010-003 entitled "Government of Canada Pension Modernization Project (GCPMP)—Release 2.0—New Data Capture Tool" [update in progress]

2. Background

2.1. The contribution rates for active plan members have been gradually increasing since 2006. In an attempt to achieve a more balanced cost-sharing ratio between plan members and the Government, the Federal Budget of March 29, 2012 announced that employee contribution rates for all active plan members would continue to increase 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.

In addition, 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 for the two distinct groups of plan members. Therefore, it is necessary to distinguish employees who become new members on or after January 1, 2013 and are subject to the post-2012 PSSA rules from those employees who remain under the pre-2013 plan rules.

In this document, the term “pre-2013 plan member” signifies a plan member who is subject to the pension plan rules in effect prior to 2013 and the term “post-2012 plan member” signifies a plan member who is subject to the current (post-2012) plan rules.

3. Policy

3.1. 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. The DCT continues to be used for submitting employee data and information to the Penfax system using current procedures.

3.2 Contributions rates, thresholds, indexation and calculations can be found in the Superannuation administration manual—Special bulletin 2016-001. Please note that an advanced copy was sent via email on December 10, 2015.

4.  New data requirements

4.1 In addition to the data that Crown corporations and territorial governments are currently providing, new pension type and fund type codes will be required to identify members who join the public service pension plan on or after January 1, 2013. The consequence of failing to include these transactions is that the new plan member will not be provided the correct pension benefits. As well, failure to provide this information will create over or under payments that will require correction and reconciliation on both the plan member and employer share. Refer to section 8.1 Processes—Refund and overpayment for the refund and overpayment process.

4.2 There is no change to the pension benefits of pre-2013 plan members. However, should a pre-2013 plan member take their pension credits out of the pension plan, they will become subject to the post-2012 pension plan rules if they are re-employed in the federal public service and  they become a plan member again on or after January 1, 2013.

5. New edits

New Edits will be made available in the Archived SACCO 2010-003 entitled "Government of Canada Pension Modernization Project (GCPMP)—Release 2.0—New Data Capture Tool"[update in progress]

6. New type codes

6.1. New type codes—Timing

Changes to the pension type and fund type codes are required upon the implementation of Release 6.0, scheduled for July 1, 2016 and retroactive to when the employee became a plan member. To assist in this initiative, a report will be provided to employers in time for July 1, 2016 that will identify all post 2012 plan members along with their date of becoming a contributor. A second report, post Release 6.0, will be provided to employers that will identify all pre-2013 plan members that are erroneously identified as post 2012 plan members for corrective action in the DCT.

6.2 New type codes—Contribution adjustments

Accounts pending plan group identification (according to pre-2013 or post-2012 plan rules) must have the pension type correctly entered via batch file or in the DCT Status Change Transaction (STS) screen retroactive to the date of becoming a plan contributor and their pension contributions adjusted using the STA screen or batch file upload and remitted for the difference in the employee rate and the difference in the employer rate.

Changes to pension and fund type codes for post-2012 members will ensure that proper contribution deduction codes are used moving forward and that the proper rates are used during costing of service buyback and leave without pay deficiencies. This will also ensure that the correct benefit options and calculations are produced.  

Adjustments between pre-2013 or post-2012 plan member contributions will need to be reported  on the monthly remittance of superannuation contributions (Public Service Corporation) Form 2292 and remitted by separate year only, to indicate the amounts that have been adjusted from post-2012 to pre-2013 or vice versa. In the case where the employee would have paid the higher pre-2013 plan member contributions in error, a refund allocated to the employee would be completed by the Crown or territorial government if it’s current year and by accounting for all years prior. Refer to section 8.1 Processes—Refund and overpayment for procedures on refunding pension contributions.

6.3 New type codes—Service buyback and leave without pay

Existing service buyback (SBB) and leave without pay (LWOP) repayment schedules that are active on members’ account will need to be re-entered using the correct post-2012 plan member deduction codes for reporting and for employer share billing purposes. Refer to section 8.2 Processes—Service buyback and leave without pay for procedures on SBB and LWOP.

6.4 New type codes—Employer responsibility regarding input into the Data Capture Tool

There are no changes to employers’ responsibility concerning eligibility to contribute and remittances. Employers continue to apply the public service pension plan rules of eligibility to commence contributions and to input the appropriate employee type and pension type codes into the DCT. In addition, a separate breakdown of contributions for existing pre-2013 plan members and new members who join the plan on or after January 1, 2013 (post-2012 members) is still required on monthly remittances.

7. New Data Capture Tool type codes

7.1 New Data Capture Tool type codes—Taken on strength

Employers entering TOS transactions in the DCT now have to choose from an updated set of pension type codes:

Pre-2013 plan members pension type	Post-2012 plan members pension type equivalent	Definition
01	31	Under 35 years of service (assigned work week (AWW) equal to or more than12 hours)
02	32	Under 35 years of service (dual remuneration)
03	33	35 years of service (contributing 1% )
04	34	35 years of service (contributing 1%  dual remuneration)
13	36	Dual Employment

7.2 New Data Capture Tool type codes—Status change

Employers entering STS transactions in the DCT now have to choose from an updated set of pension type codes:

Pre-2013 plan members pension type	Post-2012 plan members pension type equivalent	Definition
01	31	Under 35 years of service (AWW equal to or more than 12 hours)
02	32	Under 35 years of service (dual remuneration)
03	33	35 years of service (contributing 1% )
04	34	35 years of service (contributing 1%  dual remuneration)
13	36	Dual Employment

7.3 New Data Capture Tool type codes—Contributions

Employers entering data related to contributions will now have to choose from 6 new fund type codes:

Fund type code	Phoenix field description for fund type code
1	Fund 1
2	G1 Fund 2
3	G1 Retirement Compensation Arrangement (RCA)
4	Supplementary Death Benefit (SDB)
5	G2 Fund 2
6	G2 RCA

8. Procedures and instructions

8.1. Processes—Refund and overpayment

For situations where the Employer needs to amend the employee/employer contributions rate from Pre-2013 plan to Post-2012 plan or vice versa, the following steps are required:

1. Current calendar year adjustments relating to refunds or recoveries (current contributions)

• Refunds or recoveries to be handled by employer
• DCT action required to adjust contribution amount
  • minus the full amount previously reported using the same effective from and to dates as well as the same Fund/Contribution Type Codes
  • upload correct contribution amounts for the period of service affected using the proper Fund and Contribution Type codes
  • amend the Pension Type code to reflect the proper group
  • refer to the DCT user guide as well as the Tips document for additional DCT entry instructions
• Adjustment to be added to PWGSC 2292 form

Example: 1—Error occurred in April, employer is made aware in June, and adjustments are made on the June PWGSC-TPSGC 2292 form (current calendar year rates to be used for both employee and employer).

2. Prior calendar year adjustments relating to refunds or recoveries (current contributions)

• Refunds
  • to be done by the Government of Canada Pension Centre’s Accounting Department;
  • employer process:
    • send email to PWGSC.SHEcrownreconciliation-SHErapprochementcomptes.TPSGC@pwgsc-tpsgc.gc.ca;
    • subject of the email: contributor Accounting Refund Request
    • body of email needs breakdown of employee/employer share for each type of contributions per calendar year; no PWGSC-TPSGC 2292 required
    • DCT action not required to adjust the contribution amount. These will be adjusted by the Accounting Department.
• Recoveries
  • to be done by the employer
    • Follow current calendar year adjustment process
• DCT action required
  • action not required to adjust the contribution amount. These will be adjusted by the Accounting Department
  • amend the Pension Type code to reflect the proper group
  • refer to the DCT user guide as well as the Tips document for additional DCT entry instructions

8.2. Processes—Service buyback and leave without pay

• Calculations are based on the group plan determined by the Pension Centre (group 1 or group 2)
• Employer is advised to start the deductions at proper rate
• If an error occurred for a monthly re- payment schedule; the schedule will be amended and the employer notified; no refunds or PWGSC-TPSGC 2292 amendments required
• If an error occurred when already paid in full; above step 1 or 2 will be required for refunds or recoveries

9. Data Capture Tool user guide

9.1. The DCT user guide will be updated to reflect these changes

10. Monthly listing of new employees

10.1. Providing the new pension type codes electronically via the DCT replaces the interim requirement for a list of new employees who become plan members each month.

11. Inquires

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