ARCHIVED CD 2003-016
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Note This document has been modified. The changes are identified by a vertical line "|". Revision (|)
November 12, 2003 (Revised December 16, 2003)
SUBJECT: New Automated Process - Cessation of Pension Contributions for Employees Age 69 or Over
1.1 The purpose of this directive is to advise departments, agencies and Crown corporations serviced by the Regional Pay System (RPS) of the new automated process associated with the cessation of pension contributions for those employees who have reached age 69.
1.2 This directive must be read in conjunction with the Superannuation Administration Manual (SAM) Special Bulletin 2002-004, entitled "Changes to the Public Service Superannuation Regulations - Change in age limit for contributing to the Public Service Pension Fund (from 71 to 69)".
1.3 In this text, use of the masculine is generic and applies to both men and women.
2.1 In order to cease the deduction of pension contributions for those employees who had reached the age limit for contributing under the Public Service Superannuation Act (PSSA), compensation advisors were required to perform a pay transaction via the RPS to change the employee's pension status from a contributor to a non-contributor.
3.1 As stated in the SAM Special Bulletin 2002-004, effective January 1, 2003, and thereafter, contributors who reach the age of 69 during the current year will cease to contribute to the Public Service Pension Plan effective January 1 of the following year.
4.1 Effective 2003, a new automated process will be implemented as part of the RPS year-end activities. This process will automatically change the pension status of all active and temporary inactive accounts where the employee reached age 69 during the current year. The system will calculate the age of the employee, as of December 31 of that year, using the date of birth in Field 16 of the RPS for all active and temporary inactive accounts. The RPS will create a "miscellaneous staffing action" (MSA) transaction and change the pension type code to 59 (non- contributor) effective January 1 of the following year for those accounts where the employee age equals 69 or greater, and where the pension type code is 01, 02, 03, 04, 10, 13, 18 or 62 in Field 39. It should be noted that this automated process will only affect accounts identified as contributor accounts in the RPS.
4.1.2 For instances where January 1st is not equal to the first day of the pay period, pension contributions will not be deducted for the full pay period. Therefore, an error analysis report containing the following message "N15 - MAN ADJ MAY BE REQUIRED - FROM DATE NOT = PP START DATE" will be produced and sent to the regional pay office (RPO). The RPO will be responsible to make the necessary adjustments. The adjustments will consist of collecting pension contributions from the first day of the pay period up to and including December 31.
An employee who is a contributor under the PSSA reaches the age of 69 during the year 2004. His pension type code in Field 39 of the RPS is 01. In accordance with the Public Service Superannuation Regulations (PSSR), the employee will cease to contribute to the pension plan effective January 1, 2005. As part of the year-end activities for 2004, an MSA will be created to change the employee's pension type code from 01 to 59 with an effective date of January 1, 2005.
Pension contributions will not be deducted for the full pay period. Since the first day of the pay period for the calendar year 2005 is December 30, 2004, and the effective date of the change in the pension status of the employee is January 1, 2005, the RPO will recover the deductions that should have been taken for December 30 and 31.
4.1.3 Employees who have a non-contributor status
Compensation advisors will be responsible for creating an MSA transaction for those employees who attain the age of 69 and for whom the pension type code in Field 39 of the RPS is equal to 53, 54, 55, 56, 57, 58, 60 or 64. The MSA transaction must be created with an effective date of January 1 following the year in which they reach the age of 69. When changing the pension status for these employees, compensation advisors must enter pension type Code 59 in Field 39.
An employee who is age 69 is hired for a term of less than six months for the period of September 8, 2003, to January 30, 2004. Because the period of employment is less than six months, the employee is not eligible to contribute to the pension plan and the pension type code in Field 39 must be 53.
However, because the employee reached the age of 69 during the year 2003, effective January 1, 2004, he will not be eligible to contribute to the pension plan even if the period of employment was extended for a period exceeding six months. The compensation advisor will have to create an MSA to change the pension type code in Field 39 of the RPS from 53 to 59 with an effective date of January 1, 2004.
4.2.1 A report entitled "Master Bulk Transaction Report - Age 69 Contributory Status Change" will be produced. This report will identify those accounts for which an MSA transaction has been created and for which the pension type code has been changed to 59. The report will be sorted by pay office, department, paylist and Personal Record Identifier (PRI). For each department and paylist, the report will display the PRI, surname and initials and activity status ("X" for active employees and "T" for temporarily struck off strength employees) of the affected accounts. Also, the report will indicate that Code 59 was imposed in Field 39.
The report will be generated once the year-end activities and the rollover for the new year have been done. The report will be sent to departments, agencies and Crown corporations serviced by the RPS.
| If there are no accounts for contributors age 69 or over for a particular paylist, department or pay office, no report will be produced.
4.3. Contributor System and Pension Support System
4.3.1 The MSA transaction to change the pension type code will update the Contributor System. The "Status Information #1" (STS) screen will be updated and the contributor status for all affected accounts will be changed to "N" (non-contributor). The pension type code 59 will also be imposed. A new service code "969" will be generated for those affected accounts and will be displayed on the "Service" (GEN) screen of the Contributor System and the "Service" (GEQ) screen of the Pension Support System. All service identified as Code 969 will be excluded from any pension benefit calculation. Also, all corresponding salaries will be excluded from the average salary calculation.
5.1 Any inquiries on the information contained in this document should be addressed to your Public Works and Government Services Canada (PWGSC) Compensation Services Office.
Original Signed by
Accounting, Banking and Compensation
Reference(s): CJA 9203-42-12 (1)
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