SAM - Special Bulletin 2011-005

Information: GCintranet disclaimer

This information is only accessible from inside the Government of Canada network.

Subject: Government of Canada Pension Modernization Project Release 2.0 New Processes for Return of Contributions Upon Termination of Employment

April 11, 2011 Updated February 13, 2012

1. Purpose

1.1. The purpose of this bulletin is to inform compensation advisors and pay offices about the new process for the Return of Contributions (ROC) when a plan member terminates employment from the public service or when an employee dies with less than two years of substantially continuous service.

1.2. This directive should be read in conjunction with the SAM - Special Bulletin 2011-002 entitled New Processes for Pension Benefit Entitlements and Survivor Pension Entitlements and with the Compensation Directive 2011-003 entitled Amendment to the "Termination/Retirement Information" form (PWGSC-TPSGC 4242 - Termination/Retirement Information - This site is only accessible to federal government employees, and only to federal departments and agencies.) formerly known as "Certification Notice - Pension Support System".

1.3. In accordance with the new process, the "Your Public Service Pension and Benefits" Web Portal, the Superannuation Administration Manual, the Superannuation Procedures Manual Public Service Corporations, superannuation bulletins, compensation directives, national training courses, virtual pay checklists, as well as procedure guides and various forms have been amended or deleted.

Updated 1.4. The Treasury Board of Canada Secretariat's (TBS) standard benefit letters have not yet been amended to reflect the new pension benefit process. It is suggested that client organizations, including those not using the Secretariat's standard benefit letters, add a paragraph that advises their employees of the new process and remove from the letters all references to the previous pension benefit processes. For example: "As a member of the public service pension plan who is terminating employment with the public service, you are required to contact the Public Service Pension Centre (Pension Centre) in order to receive your personalized pension estimate package. The information, prepared in advance of your departure, will include descriptions and estimates of the pension options available to you on termination, as well as the forms required to initiate your retirement process. For the Pension Centre's contact information, please visit Your Public Service Pension and Benefits Web portal or call the toll free number 1-800-561-7930. Prior to receiving your pension benefit information, you are encouraged to consult the "Your Public Service Pension and Benefits" Web Portal for additional information on terminating employment with the public service.

2. Background

2.1. On June 13, 2007, the TBS granted approval to proceed with two transformation of pension administration initiatives, the Government of Canada Pension Modernization Project and the Centralization of Pension Services Delivery Project. The objectives of these initiatives are to renew Public Works and Government Services Canada's (PWGSC) nearly 40 year old pension administration system, transform business processes and centralize the delivery of pension services to a centre of expertise within PWGSC, namely the Public Service Pension Centre (Pension Centre), in Shediac, New Brunswick.

2.2. Accordingly, the Government of Canada Pension Modernization Project team was established to develop and progressively implement pension services and business processes in accordance with the new model, which allows for self-service options and access to pension expertise through various channels. The project will bring about significant changes in the way pension services are delivered.

2.3. In addition, the Centralization of Pension Services Delivery Project was established to provide best practice pension administration services to all employees subject to the public service pension plan. This is being accomplished by progressively implementing new and redeveloped pension services delivered centrally from the Pension Centre. The Centralization Project, in concert with the Pension Modernization Project, presents an opportunity to improve the consistency, accuracy and timeliness of service delivery at a reduced cost, to enable direct problem resolution, and to eliminate duplication of effort and inherent deficiencies of the current delivery model.

3. Policy

3.1. Effective April 11, 2011, the Pension Centre will be responsible for the administration of pension benefit entitlements associated with the termination of employment of plan members in the public service for all departments, Crown corporations, agencies and territorial governments that are subject to the public service pension plan. This includes the provision of information, estimates, options and required forms to plan members, in the case of death in service provision, to their survivors or legal representatives, in order to administer pension entitlements.

4. Definition

4.1. Return of contributions services include the validation of pensionable service, the collection of required data from employers and plan members, the payment of pension contributions to the plan member, to the survivors or to the legal representatives or directly to their financial institution of choice, the recovery of certain debts to the Crown, the provision of information regarding the general benefits of the public service pension plan and specific information regarding plan members' individual accounts.

5. Procedures and Instructions

5.1. When asked about the public service pension plan termination of employment and Return of Contributions process, compensation advisors will direct plan members and survivors to the "Pension Entitlement Information Package" or the "Contact Us" Web pages, both located on the "Your Public Service Pension and Benefits" Web Portal at www.pensionandbenefits.gc.ca or, if they do not have Internet access, advise them to contact the Pension Centre.

5.2. Compensation advisors continue to be responsible to capture the correct data and to terminate employment appropriately for plan members. For procedures and information on the new process, reference should be made to the documents included with this Superannuation Administration Manual Special Bulletin: Work Procedures for Compensation Advisors, the Pension Centre and the Pay Offices Roles and Responsibilities Contact Information

5.3. The links to the new forms and to the Pension Entitlement Information Package, within these documents, will ONLY be available effective April 11, 2011.

5.4. We would also like to remind you of the importance of using the latest version of compensation forms available on the PWGSC Internet Web site: Forms in order to ensure the best possible service for your employees. As part of the Government of Canada's initiative to modernize the public service pension systems, processes have been streamlined and a new pension solution has been adopted. This new solution includes standard header forms that support imaging technology and enable the automation of activities. In order for PWGSC to continue to benefit from this innovative technology, standard header forms must be used, as older versions of forms do not support the new solution.

6. Publications

6.1. The Superannuation Administration Manual will be updated to incorporate the relevant information contained in this bulletin.

7. Inquiries

7.1. Inquiries regarding the information contained in this document should be addressed to the Public Service Pension Centre. Inquiries regarding the pension implications of leave without pay and the Social Insurance Numbers (SINs) and the Personal Record Identifier (PRI) problems should be addressed to your PWGSC Compensation Services Office.

Original Signed by
Carrie E. Roussin

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

Reference(s): CJA 9203-12(1) (a)-(c), 12(2) (b)-(d), 12(3)

Work Procedures

For Compensation Advisors, the Public Service Pension Centre and the Pay Offices

Return of Contributions upon Termination of Employment

Overview

Effective April 11, 2011, the provision of return of contributions portion of Pension Benefit Entitlements service to plan members and their survivors or legal representatives will be the responsibility of the Public Service Pension Centre (Pension Centre) located in Shediac, New Brunswick.

The objective of this document is to explain the new return of contributions process upon termination of employment and to identify the important activities that compensation advisors will provide to support this new process. April 11, 2011, is the targeted implementation date of the Government of Canada Pension Modernization Project's Release 2.0. The new return of contributions process will come into effect at that time.

A roles and responsibilities table has also been developed for the Pension Benefit Entitlements service, and that table should be referenced in conjunction with this work procedures document for compensation advisors.

The return of contributions portion of the Pension Benefit Entitlements service includes: the validation of pensionable service; the collection of required data from employers and plan members; the payment of pension contributions to the plan member or directly to their financial institution of choice; the recovery of certain debts to the Crown and any subsequent payment of pension contributions, if applicable; the provision of information regarding the general benefits of the public service pension plan; and the provision of specific information regarding plan members' individual accounts.

Note: The processes related to the changes to the leave without pay service are not included in the centralization of this service. Client organizations should continue to follow their current procedures for these types of situations until enhancements are added to the new pension solution in later releases of the Pension Modernization Project.

The previously centralized service buyback (Elective Service) will continue with its current procedures until enhancements are added to the new pension solution in later releases of the Pension Modernization Project.

This document also describes terminology, transitional implementation guidelines, responsibilities, provision of information, and service standards.

Terminology

Client organizations: Employers that participate in the public service pension plan. This can include departments, Crown corporations, agencies and territorial governments.

Compensation advisors: Individuals who provide compensation services to the public service pension plan members within all client organizations, unless otherwise specified.

Plan members: Employees who are eligible to be a member of the public service pension plan.

Information Package: Communication package assembled by the Pension Centre and sent directly to plan members of the public service pension plan who will be terminating or have terminated employment. The package contains:

a cover letter,
a personalized "Pension Benefit Options Statement" form (PWGSC-TPSGC 2011E-PF or PWGSC-TPSGC 2011F-PF),
a Pension Benefit Estimates Statement,
a Supplementary Death Benefit (SDB) Estimates Statement, if applicable,
a Pension Entitlement Information Package, and
all other forms required for the processing of a pension entitlement.

"Your Public Service Pension and Benefits" Web Portal: a Web Portal that is designed to provide information on the public service pension plan and other benefits available to employees of the public service of Canada. The "Contact Us" Web page includes mail and email addresses, as well as telephone numbers plan members can use to contact the Pension Centre. This Web page is located at Your Public Service Pension and Benefits - Contact Us.

Return of contributions: Lump-sum payment equal to a plan member's pension contributions paid, plus interest.

Pension Entitlement Forms

Pension Benefit Options Statement (PWGSC-TPSGC 2011E-PF or PWGSC-PWGSC-TPSGC 2011F-PF): Form to be initiated by the Pension Centre to enable the plan member to exercise a choice of applicable pension benefit options as provided by the plan rules.

Once completed by the plan member and forwarded to the Pension Centre, the form authorizes a pension expert to process the chosen pension benefit.

In the cases of return of contributions, the form includes fields to provide the necessary details for the direction of the payment.

Transitional Implementation Guidelines

Plan members who receive a return of contributions payment dated prior to April 11, 2011, will not be part of the new centralized return of contributions portion of the Pension Benefit Entitlements service. The current process of termination of employment must continue to be followed until March 30, 2011, regardless of a plan member's termination date. Compensation advisors will continue to initiate the return of contributions using the form "Request for Return of Superannuation Contributions" (PWGSC-TPSGC 2577) or, for public service corporations, the form "Termination and Contributions Advice" (PWGSC-TPSGC 2321). For any return of contributions issued via the Regional Pay System, the pay office will be responsible to cancel, if applicable.

Requests for payments of returns of contributions, including details on the method of payment (cash versus Registered Retirement Savings Plan (RRSP)/Registered Pension Plan (RPP)), raised between March 31, 2011, and April 10, 2011, should be sent to the Pension Centre using a "Transmission of Pension Request/Payment" document. The pension support system will be unavailable for both compensation advisors and the Pension Centre as of April 1, 2011. The conversion of data from the current system to the new pension solution will take place between April 1, 2011, and April 10, 2011.

Transmission of Pension Request/Payment Document

The document "Transmission of Pension Request/Payment", found in the SAM - Special Bulletin 2011-002, is to be used to facilitate the transfer of work received from a plan member to the Pension Centre.
The document must be fully completed by the compensation advisor, including the type of request, before being sent to the Pension Centre with a copy forwarded to the plan member.
The Pension Centre will review, pay the return of contributions and follow up with the plan member, if required.

After April 11, 2011, client organizations will no longer be responsible to determine pension benefit entitlements or to request the return of contribution payments for plan members who have terminated employment. Plan members can be advised to contact the Pension Centre on April 11, 2011, or later.

For pay offices, any PWGSC-TPSGC 2577 forms not processed for payment prior to March 31, 2011, will be forwarded to the Pension Centre for processing. Any PWGSC-TPSGC 2577 forms received in the pay offices on March 31, 2011, or later, will be returned to the client organization, since this service will now be delivered by the Pension Centre.

Termination of Employment

Compensation advisor responsibilities

Under the new centralized model of the Pension Benefit Entitlements services, upon termination of employment, compensation advisors continue to be responsible to enter data for the individual plan member's account in the Regional Pay System . At the appropriate time, this data would include: stopping regular salary payments, finalizing the plan member's account and indicating the date and reason of termination.

Compensation advisors will answer questions from employees on their pay entitlements and continue to apply the rules of pay policies and procedures.

Compensation advisors will continue to complete Part 1 of the "Termination / Retirement Information" (PWGSC-TPSGC 4242 - Termination/Retirement Information - This site is only accessible to federal government employees, and only to federal departments and agencies.) forms for all plan members and distribute it to the Pension Centre and the pay office at the appropriate time. This will include the plan member's personal information.

Errors may be detected independently by plan members, by the Pension Centre, or by client organizations. If errors are detected by the Pension Centre or by a plan member, a pension expert will contact the compensation advisor. Additional information may be required by the Pension Centre in order to determine the correct entitlement to pension benefits under the public service pension plan rules. If errors are detected by the client organization, the compensation advisor may need to amend the pay system to reflect the correct termination information and/or make corrections to the compensation advisor section of the PWGSC-TPSGC 4242 - Termination/Retirement Information - This site is only accessible to federal government employees, and only to federal departments and agencies. form and distribute it to the Pension Centre and to the pay office.

Note: Erroneous pension benefit entitlements can result when incorrect data in the Regional Pay System is fed to the new pension solution.

Provision of Public Service Pension Plan Information to Public Service Employees Who Are Terminating Employment

Compensation advisor responsibilities

Requests from employees for general information about termination of employment and any impacts on their public service pension plan benefits should be directed to the Pension Centre by providing the employees with the Pension Centre "Contact Us" information. The Pension Centre Your Public Service Pension and Benefits - Contact Us information provides the employee with the "Your Public Service Pension and Benefits" Web Portal address, as well as the Pension Centre global email address, toll-free telephone number, facsimile number and mailing address.

For employees with access to the Internet, the Uniform Resource Locator (URL) address can be provided directly to the employee. This is particularly convenient via email.

For employees who do not have access to the Internet, a copy of the Pension Centre "Contact Us" information should be printed and given to them by the compensation advisor.

Pension Centre responsibilities

The Pension Centre will provide general information to public service employees on pension benefit entitlements upon termination of employment, as well as specific information on their potential or actual individual pension entitlements.

Service Standards

Compensation advisor responsibilities

Once the plan member has terminated employment, the compensation advisors complete and forward an original copy of the PWGSC-TPSGC 4242 - Termination/Retirement Information - This site is only accessible to federal government employees, and only to federal departments and agencies. form to the Pension Centre.

Compensation advisors complete the plan member's personal information section and Part 1 of the form, and indicate that it is the initial form. A photocopy of the PWGSC-TPSGC 4242 - Termination/Retirement Information - This site is only accessible to federal government employees, and only to federal departments and agencies. form should be kept on the employee's file, and the form must be sent to the Pension Centre within five business days of a termination of employment transaction or a request from the Pension Centre. However, the form is not required within five business days of a retroactive salary transaction.

Once the member's account has been finalized, using an appropriate "Bring Forward" system as a reminder, the compensation advisor must complete and forward the finalized copy of the PWGSC-TPSGC 4242 - Termination/Retirement Information - This site is only accessible to federal government employees, and only to federal departments and agencies. form to the pay office.

An account is considered finalized once the employee has been struck off strength, any cancelled cheques have been processed and all final salary and termination payments with deductions have been issued by the Regional Pay System.

Note: Completion of Part 1 of the PWGSC-TPSGC 4242 - Termination/Retirement Information - This site is only accessible to federal government employees, and only to federal departments and agencies. form by the compensation advisor is essential for processing an initial benefit. The timely distribution of this form will ensure all payments are made within the Pension Centre service standards.

Pension Centre responsibilities

Call Backs: Telephone calls will be returned within 48 hours from receipt of the call (two business days). The Pension Centre will provide the plan member with pension benefit entitlement information and estimates requested by telephone, based on the information available.

Email Inquiries: All email inquiries will be responded to within five business days from receipt of the inquiry .

Return of Contributions Payments: The return of contributions payments will be issued within 30 days of receipt of all required documentation, or within 30 days of the date of termination, whichever is later.

Return of Contributions Payment or Recovery Notifications: The pay office will be notified of the date of the return of contributions at the same time as the option for the return of contributions is updated in the new pension solution. If there are any recoveries from the return of contributions payment, the pay office and the compensation advisors will be notified at the same time.

Roles and Responsibilities

Return of Contributions Upon Termination of Employment

General information for active members
Activity	Plan Members or Survivors/Representatives	Employer/Compensation Advisor	Public Service Pension Centre	Regional Pay Office
Obtaining information	Obtain information from the Your Public Service Pension and Benefits Web portal and/or contact the Pension Centre. Plan members review the Information Package available on the Web portal. Plan members calculate and review pension benefit estimates using the secure or non-secure pension benefits calculator available on the Web portal. Contact the Pension Centre for termination of employment information and assistance to navigate the "Your Public Service Pension and Benefits" Web portal.	Direct the plan member to the Your Public Service Pension and Benefits (YPSPB) Direct the plan member to the Pension Centre contact information available at YPSPB - Active Member - Terminating Employment with the Public Service , or provide the Your Public Service Pension and Benefits - Contact Us information to individuals without access to the Internet.	Respond to the plan member's request for information and assist with navigation of the "Your Public Service Pension and Benefits" Web portal. As requested, prepare and provide a pension benefit estimate to plan member. Pension benefit estimates will be provided immediately based on information readily available.

Termination of employment
Activity	Plan Members or Survivors/Representatives	Employer/Compensation Advisor	Public Service Pension Centre	Regional Pay Office
Termination of employment	Plan members or their survivors/legal representatives obtain information from the Your Public Service Pension and Benefits Web portal, and/or contact the Pension Centre. Plan members provide notice of resignation or retirement, if applicable, to their compensation advisor. Plan members review the Information Package available on the Web portal. Contact the Pension Centre for benefit information in advance of termination of employment. If an Information Package was not received or is lost/misplaced, contact the Pension Centre to request a new/duplicate package.	Provide Pension Centre contact information to plan members /survivors/ legal representatives. Enter data in the pay system at the appropriate time to stop regular salary payments; finalize former employee's account and enter data to indicate date and reason of termination. Follow-up with a completed "Termination / Retirement Information" form (PWGSC-TPSGC 4242 - Termination/Retirement Information - This site is only accessible to federal government employees, and only to federal departments and agencies.) and distribute to the Pension Centre and the pay office. This will include the plan member's up-to-date personal information. For client organizations not using the Regional Pay System: Enter data in the Data Capture Tool via the Secure Crown Corporation Portal (ARCHIVED Special Advice to Crown Corporations and Others 2010-002) to indicate date and reason for termination in a timely manner. It is suggested to match payroll frequency.	Upon termination of employment, the new pension solution applies the public service pension plan rules of eligibility to determine pension benefits. Based on the plan member's request, or based on data transferred from the pay system, generates an Information Package. This package may include generic benefits information, a personalized "Pension Benefit Options Statement" form (PWGSC-TPSGC 2011E.PF or PWGSC-TPSGC 2011F.PF) outlining benefits, the Pension Benefit Estimates Statement along with a Supplementary Death Benefit (SDB) Estimates Statement, and a Pension Entitlement Information Package. Advise plan members of the complete pension termination process. Record details of the conversation with the plan member. When discrepancies are identified, investigate to validate employee's eligibility to a pension benefit as a member of the public service pension plan. Prepare a "Bring Forward" reminder for 30 days from the date of this package or within 30 days from the termination date, whichever is later. If the original package was not received within 14 calendar days, provide a regenerated Inform ation Package to the plan member (that automatically indicates a new issue date).	Complete the Pay Office portion, Part 2, of the PWGSC-TPSGC 4242 - Termination/Retirement Information - This site is only accessible to federal government employees, and only to federal departments and agencies. form and forward to the Pension Centre within ten business days.
Information Package is received by the plan member	Read the information and follow instructions contained in the Information Package. Complete Section C of the "Pension Benefit Options Statement" form (PWGSC-TPSGC 2011E.PF or PWGSC-TPSGC 2011F.PF) to select payment method, provide financial institution information and amounts, if required, and return the form to the Pension Centre. If the Pension Centre does not hear from the plan member within 30 days from the date of this letter, or within 30 days from the member's termination date, whichever is later, his/her payment will be made in cash and will be subject to income tax deducted at source.	If contacted by a plan member, direct him / her to contact the Pension Centre for information.
The Pension Centre receives the completed "Pension Benefit Options Statement" form (PWGSC-TPSGC 2011E.PF or PWGSC-TPSGC2011F.PF)			Review the PWGSC-TPSGC 2011E.PF or PWGSC-TPSGC 2011F.PF form and update relevant system with any additional information the plan member has provided in Section C, such as payment method and financial institution information. Upon receipt of a completed and finalized " Termination / Retirement Information " form (PWGSC-TPSGC 4242 - Termination/Retirement Information - This site is only accessible to federal government employees, and only to federal departments and agencies.), process benefit option payment for return of contributions with any relevant recoveries, if applicable. Generate a return of contributions payment letter and forward to plan member. Generate and send manual notification to the pay office with payment date of return of contributions for update to any relevant system. Generate and send manual notification to the pay office and to the employer / compensation advisor, with information on any recoveries from the return of contributions, such as salary overpayments or Supplementary Death Benefit premiums. As required, report a pension adjustment reversal (PAR) to restore registered retirement saving plan (RRSP) room to a plan member who terminates employment and receives a lump sum benefit from the public service pension plan.	Update relevant pay system with date of the return of contributions and, if applicable, any recoveries from the return of contributions such as salary overpayments or Supplementary Death Benefit premiums.
The Pension Centre does not receive the "Pension Benefit Options Statement" form (PWGSC-TPSGC 2011E.PF or PWGSC-TPSGC 2011F.PF) from the plan member	If the Pension Centre does not receive a completed PWGSC-TPSGC 2011E.PF or PWGSC-TPSGC 2011F.PF form from the plan member within 30 days from the date this form was sent, or within 30 days from the member's termination date, whichever is later, the return of contributions payment will be made in cash and will be subject to income tax deducted at source.		As triggered by the "Bring Forward" reminder, the pension expert will issue the return of contributions payment in cash with income tax deducted at source. All other previous procedures apply.
Error identified by the Pension Centre - return of contributions paid in error		With the assistance of the Pension Centre, investigate the error and update the pay system to ensure pension benefit entitlements are initiated with the correct data (e.g., if re-employed elsewhere within the public service or the date of termination has changed).	Investigate the error and, with the assistance of the compensation advisor, determine the employee's correct pension benefit eligibility. Based on data transferred from the pay system, or provided via the Data Capture Tool by the client organizations not using the Regional Pay System, generate a new Information Package (that automatically indicates a new issue date), if required. Initiate recovery of the return of contributions procedures.	For any return of contributions issued via the Regional Pay System, the regional pay office will be responsible to cancel the return of contributions payment, if applicable.
Error identified by the plan member - incorrect recovery from the return of contributions	If incorrect recovery is made from the return of contributions, contact the Pension Centre to investigate.	With the assistance of the Pension Centre, investigate the error and, if required, update the information on the pay system to correct the error. If required, corrections will be made to the compensation advisor section of the "Termination / Retirement Information" form (PWGSC-TPSGC 4242 - Termination/Retirement Information - This site is only accessible to federal government employees, and only to federal departments and agencies.), and the form will be distributed to the Pension Centre and to the pay office. If required, repayment will be made to the plan member via the employer's internal financial system of any duplicate overpayment taken in error from the return of contributions.	If notified by the plan member that the recovery of debts or Supplementary Death Benefit deductions from the return of contributions is incorrect, investigate the error and, if required, contact the compensation advisor to update the pay system. If required, the Pension Centre must notify the employer to repay to the plan member via their internal financial system any duplicate overpayment taken in error.	As required, correct or amend the pay office section of the PWGSC-TPSGC 4242 - Termination/Retirement Information - This site is only accessible to federal government employees, and only to federal departments and agencies. form and distribute the revised form to the Pension Centre.
Error identified by the pay office / employer / compensation advisor - incorrect recovery from the return of contributions		Inform the Pension Centre if an overpayment previously indicated on the "Termination / Retirement Information" form (PWGSC-TPSGC 4242 - Termination/Retirement Information - This site is only accessible to federal government employees, and only to federal departments and agencies.), has been recovered from a subsequent payment on a finalized account. If the return of contributions payment has already been issued with the recovery of overpayment as requested, the employer will repay to the plan member these monies owed via their internal financial system.	Advise the compensation advisor if the return of contributions was paid and recoveries made.	If required, the pay office must notify the employer to repay to the plan member via their internal financial system any duplicate overpayment taken in error from another payment (e.g. retroactive revision).