ARCHIVED CD 2007-004: ANNEX A

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PAY AND PENSION TIPS AND GUIDELINES

INTRODUCTION

PWGSC has been working with experts across the compensation community since the spring of 2005 to resolve accounts with data discrepancies in the pay and pension systems. The analysis to date has shown that the complexities of certain compensation events are more prone to errors than others. This guide has been prepared to share with you the results of this analysis, and to provide you with updated procedures and helpful tips for the following compensation transactions:

  • Salary/Entitlement Change
  • Recovery of Non-Pensionable Entitlement
  • LWOP Change in Reason Code
  • MSA/PAC05
  • Leave With Income Averaging (LIA)
  • Time Summary Reporting LWOP
  • Cancelled Cheques due to Non-Entitlement

This guide describes common problems encountered in processing each of these compensation events, and the impact of errors.

SALARY/ENTITLEMENT CHANGE

INCORRECT FORMER RATE

COMMON PROBLEMS

The incorrect "Former Rate" is input into the Regional Pay System (RPS) when processing a retroactive salary/entitlement change.

Impact

Although the salary/entitlement information in RPS, Salary/Service and the Contributor System is correct, incorrect payments and deductions, such as pension contributions, will be calculated.

CORRECT PROCESS

Prior to inputting the former salary/entitlement rate into the RPS, ensure that the proper former rate is determined for the period(s) being reported.

Hint

Use the Salary Service History-PAY from the RPS, your Pay History Card and/or the Payroll Register to determine the correct former.

CORRECTIVE ACTION
Before payment released
  1. Cancel the payment.
  2. Enter offsetting transactions into RPS to reverse previous entries. PPIM 8-1
  3. Re-input the salary/entitlement changes using the correct former rate. Field 69 Error correction - Procedures to follow.

PPIM 5-9

After payment released

Overpayment

Process 18R/ENR to recover the salary/entitlement overpayment, using the Entitlement Code that was overpaid.

PPIM 4-4-18-4-2

Underpayment

Enter offsetting transactions into RPS to reverse previous entries.

PPIM 8-1

Re-input the salary/entitlement changes using the correct former rate.

Process 18R/ENR to recover the incorrect payment.

PPIM 14-6-4

INCORRECT EFFECTIVE FROM DATE

COMMON PROBLEMS (1)

The incorrect "Effective From Date" is input in the RPS when processing a salary/entitlement change.

Impact

Salary/entitlement information in RPS, Salary/Service and the Contributor System will be updated with the incorrect Effective From Date.

Incorrect future automated payments and pension benefit entitlement may result.

CORRECT PROCESS (1)

When inputting the Effective From Date into the RPS, ensure that the proper date is input for the period(s) being reported. These transactions will also update the Salary/Service and the Contributor System.

CORRECTIVE ACTION (1)

Salary and Service History must be corrected.

Enter offsetting transactions into RPS to correct salary/entitlement.

PPIM 8-1

Refer to Incorrect Former Rate above for details on correction of overpayments or underpayments.

EAJ 202 (SINGLE) 270 (DOUBLE) WITH PENSIONABLE LEAVE WITHOUT PAY (LWOP) PERIOD

COMMON PROBLEMS (2)

LWOP not reduced

The payment is not reduced by the correct number of days or hours of LWOP when processing a retroactive salary/entitlement change that includes a period of LWOP.

Impact

Employee will be overpaid.

CORRECT PROCESS (2)
LWOP not reduced

If there was LWOP during the retroactive period:

  • Reduce the number of days/hours of LWOP from the total hours/days in the retroactive period.
  • If the reason for LWOP was pensionable, a non-payable code 202 or 270 also must be entered.
CORRECTIVE ACTION (2)
LWOP not reduced

Refer to corrective action on employee overpayment.

PPIM 5-9

COMMON PROBLEMS (3)

PAC71/EAJ 202 or 270 not entered with the payment

To allow for pension contribution to be deducted for the periods of pensionable LWOP.

Impact

Shortage of pension contributions.

CORRECT PROCESS (3)

PAC71/EAJ 202 or 270 not entered with the payment

EAJ/PAC71 202 or 270 closed periods must be input in the same update as the payment.

Non-payable entitlement codes

PAC71/EAJ 202 (single rate) or 270 (double rate)

Those non-payable entitlement codes are to be used to adjust Public Service Superannuation Act (PSSA) contributions on LWOP and T-SOS period(s) in the past, subject to PSSA during the retroactive period.

PPIM 4-4-71

PPIM 14-6-5

CORRECTIVE ACTION (3)

When the PAC71/EAJ 202 or 270 not entered with the payment

In order to calculate pension contributions required for the period of LWOP from regular payments.

A PWGSC 2549 (authorized hard copy) must be completed reflecting the historical periods of the 18C/ENC 202 (single rate) or 270 (double rate) and sent to the Pay Office. In the remarks, state that the 18C/ENC are for the purpose of the calculation and collection of pension contribution for the periods of LWOP and not to be updated to the Regional Pay System.

PPIM 4-4-18-3-1

PPIM 14-6-1

RECOVERY OF NON-PENSIONABLE ENTITLEMENT

INCORRECT ENR
COMMON PROBLEMS (4)

Pensionable Entitlement codes are being used to recover non-pensionable salary/entitlements (i.e. ENR001 used to recover extra duty pay).

Impact

Pension contributions are incorrectly being refunded for the period of the recovery.

CORRECT PROCESS (4)

The same Entitlement Code that was used to input the payment must be used to perform the recovery.

Hint

Do not use the system generated entitlement codes to do the recovery (e.g., Entitlement Code 194).

CORRECTIVE ACTION (4)
Recover ongoing
  1. Stop the recovery.
  2. Restart recovery using the correct Entitlement Code.
  3. Contact the Pay Office to collect pension contributions refunded in error prior to the recovery being stopped.
Recovery completed

Contact the Pay Office to collect pension contributions refunded in error during the recovery period.

LWOP CHANGE IN REASON CODE

12A/STA 109
COMMON PROBLEMS (5)

Regional Pay System is not updated to reflect the appropriate LWOP reasons for the appropriate periods when an employee takes extended periods of LWOP.

Impact

May result in improper calculation of pension contributions required (single vs. double rate) for the type and period of LWOP.

Potential non-compliance with collective agreement with respect to the LWOP reason code entered and Canada Revenue Agency maximum LWOP limits.

CORRECT PROCESS (5)

When the LWOP reason changes, complete 12A/STA 109 to reflect the type of LWOP utilized for the appropriate periods.

In the case of Maternity or Adoption Leave, advise the Pay Office of the Date of Birth/Adoption by completing Free Form Text (FFT) as soon as the date is known. If the information being reported on the FFT is input after the RE-TOS, email or fax the Pay Office to advise them that the FFT has been updated.

Hint

After return from LWOP, verify the Transaction Data Base (TDB) to ensure that the deficiency collection has started.

CORRECTIVE ACTION (5)

Report the change in reason (PAC12A109 or STA 109) while the account is in TSOS status.

If it is only known after the fact, report your 12A field 109 at the same time as the RE-TOS transaction.

PPIM 4-4-12

PPIM 14-9

Reasons for LWOP are found under #8 at the following address:

PPIM 14-4-13

MSA/PAC05

EFFECTIVE DATE OF BECOMING A CONTRIBUTOR

COMMON PROBLEMS (6)

Pension Status is not being updated when an employee is extended and should become a contributor to the pension plan.

Impact

Creates a deficiency in the member's pension contributions.

CORRECT PROCESS (6)
  • Initiate Pension Status change in accordance with current personnel-pay procedures (MSA/PAC05).
  • Do not wait for the issuance of PWGSC 2018 (Notification of Contributor Status) to initiate contributions being deducted at source, so that contributions are deducted in the pay period closest to the Contributor Effective Date.
  • When PWGSC 2018 is received, compare Effective Date of Becoming a Contributor to the date input into the Regional Pay System.
CORRECTIVE ACTION (7)

Prepare a MSA/PAC05 if the date previously entered is not equal to the date on the PWGSC 2018 when received.

PPIM 4-4-05

PPIM 14-4-3

Note: If the Effective Date on the Regional Pay System is prior to the Effective Date from the PWGSC 2018, two MSA updates are required. The first input to make the period on RPS non-pensionable and the second input to reflect the PWGSC 2018 Effective Date.

REHAB/EDUCATION LEAVE

COMMON PROBLEMS (7)

INCORRECT EFFECTIVE FROM DATE

Current pay period used to restart pension contributions when periods of Rehab or Education Leave have ended, and the employee Pension Type was modified to 62 during the period of LWOP.

Impact

No action will be taken to recover the pension contributions for the period that salary and service reflect Pension Type 62.

CORRECT PROCESS (7)
INCORRECT EFFECTIVE FROM DATE

The update to "Pension Typ" is required with an effective date equal to the start date of the Rehab or Education Leave.

CORRECTIVE ACTION (8)

New MSA/PAC05 is required for closed period, to cover the period that still reflects Pension Type 62 in Salary Service History.

PPIM 4-4-05

PPIM 14-4-3

COMMON PROBLEMS (8)

Rehab LWOP records not created

Assigned Work Weeks (AWW) are being reduced to reflect the number of hours being worked during periods to avoid inputting individual periods of LWOP.

Impact

Pension contributions will only be deducted based on the reduced AWW.

CORRECT PROCESS (8)

Rehab LWOP records not created

AWW should reflect the employee's regular AWW and periods of LWOP REC/15C301 should be entered.

Hint

After return from LWOP, verify the Transaction Data Base (TDB) to ensure that the deficiency collection has started.

CORRECTIVE ACTION (9)
Rehab LWOP records not created

New MSA/PAC05 is required to change the Assigned Work Week (AWW).

PPIM 4-4-05

A PWGSC 2549 (authorized hard copy) must be completed reflecting the historical periods of LWOP for which a 15C301 record is required and sent to the Pay Office. In the remarks, state that the PAC15C301 is for the update to Salary Service History only.

LEAVE WITH INCOME AVERAGING (LIA)

COMMON PROBLEMS (9)
Ongoing
  • Additional periods of LWOP (REC/15C301) are being input overlapping the period of actual LWOP from the LIW/15C306 period.
  • Reduced salary is not being updated when there is an change to salary and allowances.
Impact
  • Overlapping LWOP periods are being created with different LWOP reasons.
CORRECT PROCESS (9)
Ongoing
  • LIW dates should be changed when required to reflect the actual leave period(s).
  • Reduced salary should be reported whenever the salary or allowances change.
CORRECTIVE ACTION (10)
Ongoing
  1. Stop LIW.
  2. Enter period of 15C301.
  3. Enter revised period of 15C306 leave.
  4. Report the revised reduced salary when there are changes as a result of collective agreements, increments, promotions, etc.

PPIM 4-4-15-5-1

PPIM 14-7-3

COMMON PROBLEMS (10)
Historical

Additional periods of LWOP /15C301 are being input that overlap the actual period from the LIW screen/15C306 period.

Impact
  • Overlapping LWOP periods are being created with different LWOP reasons.
CORRECT PROCESS (10)
Historical

The correct process must be determined.

Hint

Historical periods of LIA do not require any update of the reduced salary. If a retro is being processed manually, refer to the correct process outlined in Salary/Entitlement Change With Pensionable LWOP Period.

CORRECTIVE ACTION (11)
Historical

If LWOP was reported in error, process a PAC 18C401/ENC to reverse the entry. If applicable, also report a 15C301 to report the proper periods of LWOP.

PPIM 4-4-18-3-3

If amending the LIW period, a PWGSC 2549 (authorized hard copy) must be completed reflecting the historical periods of LIW for which a PAC 15C306 record is required and sent to the Pay Office. In the remarks, state that the PAC 15C306 is for the update to Salary Service History only.

Reference

LIA Tools are available in the Virtual Pay Site at the following address:

Virtual Pay Site

TIME SUMMARY REPORTING LWOP

7A ACCOUNTS (EXCEPT FOR EMPLOYEES WHO ARE AS REQUIRED OR WORK ON AVERAGE LESS THAN 12 HOURS)

COMMON PROBLEMS (11)

The number of hours reported are being reduced on Time Summary accounts instead of entering a LWOP transaction.

Impact

Deductions that should be calculated based on the AWW, such as pension contributions, will only be deducted based on the hours reported. This will also better reflect for elective service opportunities the eligible periods of qualifying service.

CORRECT PROCESS (11)

The hours reported should reflect twice the weekly AWW hours and hours not worked should be reported as LWOP (REC/15C301) transactions.

PPIM 4-4-15-1

PPIM 4-7-1

CORRECTIVE ACTION (12)
Historical pensionable period

Process 18C/ENC 202 (single rate) or 270 (double rate) to commence pension contributions required for the period of LWOP from regular payments.

PPIM 4-4-18-3-1

PPIM 14-6-1

Historical non-pensionable period

A PWGSC 2549 (authorized hard copy) must be completed reflecting the historical periods of LWOP for which a PAC 15C301 record is required and sent to the Pay Office. In the remarks, state that the 15C301 is for the update to Salary Service History only.

CANCELLED CHEQUES DUE TO NON-ENTITLEMENT

COMMON PROBLEMS (12)

When a payment is cancelled, the originating transaction is not removed from the Salary Service History and the Contributor System.

Impact

Pension benefits will continue to be based on the salary/entitlements that were processed even though the payment was cancelled. An update to Salary Service History is required to offset the effect of the cancelled payment.

CORRECT PROCESS (12)

Verify Salary and Service History for accuracy.

CORRECTIVE ACTION (13)

Verify the Salary Service History and perform offsetting transactions through the RPS as per PPIM 8.1.

PPIM 8-1

If the situation is very complex, consult your local APS office.

CONCLUSION

Data integrity is the key to providing accurate pay, pension and benefit information. We are hopeful that this guide will assist you in your day-to-day processing of these compensation transactions.

This guide will continue to be updated, so if you have any questions about the procedures we have described, please do not hesitate to contact the Application and Program Support officers in your region.

Last Updated August 2009