ARCHIVED CD 2007-014: Information Notice to Employees

The purpose of this Information Notice is to provide you with information relative to the changes to the additional pension contributions rate for employees in operational service.

At the request of Correctional Service Canada (CSC), the Treasury Board Secretariat (TBS) has reviewed the early retirement provisions for public service employees employed in operational service at CSC. As a result, TBS has announced changes to the special retirement provisions under the Public Service Superannuation Regulations (PSSR), namely, the requirement for additional pension contributions. The changes to the additional pension contributions rate are deemed to have come into force on May 30, 2006.

The portion of the PSSR that deals with members of the Public Service Pension Plan (PSPP) who are employed in operational service has been amended to eliminate the additional 1.25% contribution rate currently being paid by employees in actual operational service, effective May 30, 2006.

However, employees in deemed operational service will continue to pay an additional contribution for all additional years of service in CSC at a new reduced rate of 0.62% effective May 30, 2006.

Effective from the regular pay dated June 27, 2007, and from all supplementary payments issued from June 13, 2007, the additional pension contribution of 1.25% is no longer withheld.

A refund of over-contributions will be issued to all affected employees for the period from May 30, 2006, to June 13, 2007. Income tax will be deducted at source from the portion of the refund that is for calendar year 2006 and a T4A will be issued for that portion of the refund. No income tax will be deducted at source for the portion of the refund that is for calendar year 2007. This refund will take place in October of 2007.

Later in the fall of 2007, CSC will start withholding the additional pension contributions at the reduced rate of 0.62% for employees with deemed operational service. Each account will be treated individually to ensure accuracy.

Although the specific system used to perform pension calculations will not be modified to reflect these changes until April 2008, compensation advisors will still be able to provide employees with operational service with pension estimates. The Superannuation, Pension Transition and Client Services Sector (SPTCSS) will support the compensation advisors in accomplishing this task by performing the calculations for pension estimates based on service information that compensation advisors will provide to them. It is important to recognize that the usual time frames for providing such information will be somewhat prolonged.

Any request for information regarding the foregoing should be addressed to your compensation advisor.