ARCHIVED APPENDIX "A" PENSION ADJUSTMENT CALCULATION FOR 2009

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Example 1 -- Annual pensionable salary: $55,500

Step 1: Determine the annual benefit:

  • (1.375% x $46,300) + (2% x [$55,500 - $46,300])
  • =$636.63 + $184.00
  • =$820.63 (annual benefit entitlement)

Step 2: If the annual benefit entitlement is greater than $2,444.44,

  • IMPOSE $2,444.44
    (In this case, the benefit entitlement does not exceed $2,444.44.)

Step 3: Prorate the benefit entitlement by the number of
pensionable pay periods.

  1. Full year $820.63 x 26/26 = $820.63
  2. Partial year $820.63 x 13/26 = $410.31

Step 4: Multiply the result of step 3 by a factor of 9.

  1. Full year $820.63 x 9 = $7,385.67
  2. Partial year $410.31 x 9 = $3,692.79

Step 5: Prorate $600 by the number of pensionable pay periods.

  1. Full year $600 x 26/26 = $600
  2. Partial year $600 x 13/26 = $300

Step 6: Subtract the result of step 5 from the result of step 4; this result, rounded to the nearest dollar, is the Pension Adjustment(PA) for the 2009 taxation year.

  1. Full year $7,385.67 - $600 = $6,785.67
  2. Partial year $3,692.79 - $300 = $3,392.79

Step 7: If the result is greater than $21,400,

  • IMPOSE $21,400
    (In this case, the result is less than $21,400.)

Example 2 -- Annual pensionable salary: $98,000

Step 1: Determine the annual benefit:

  • (1.375% x $46,300) + (2% x [$98,000 - $46,300])
  • =$636.63 + $1034.00
  • =$1,670.63 (annual benefit entitlement)

Step 2: If the annual benefit entitlement is greater than $2,444.44,

  • IMPOSE $2,444.44
    (In this case, the benefit entitlement does not exceed $2,444.44.)

Step 3: Prorate the benefit entitlement by the number of
pensionable pay periods.

  1. Full year $1,670.63 x 26/26 = $1,670.63
  2. Partial year $1,670.63 x 22/26 = $1,413.61

Step 4: Multiply the result of step 3 by a factor of 9.

  1. Full year $1,670.63 x 9 = $15,035.67
  2. Partial year $1,413.61 x 9 = $12,722.49

Step 5: Prorate $600.00 by the number of pensionable pay periods.

  1. Full year $600.00 x 26/26 = $600.00
  2. Partial year $600.00 x 22/26 = $507.69

Step 6: Subtract the result of step 5 from the result of step 4;
this result, rounded to the nearest dollar,
is the PA for the 2009 taxation year.

  1. Full year $15,035.67 - $600.00 = $14,435.67
  2. Partial year $12,722.49 - $507.69 = $12,214.80

Step 7: If the result is greater than $21,400,

  • IMPOSE $21,400
    (In this case, the result is less than $21,400.)

Example 3 -- Annual pensionable salary: $155,000

Step 1: Determine the annual benefit:

  • (1.375% x $46,300) + (2% x [$136,7001 - $46,300])
  • =$636.63 + $1,808.00
  • =$2,444.63 (annual benefit entitlement)

Step 2: If the annual benefit entitlement is greater than $2,444.44,

  • IMPOSE $2,444.44
    (In this case, the annual benefit entitlement of $2,444.44 will be imposed.)

Step 3: Prorate the annual benefit entitlement by the
number of pensionable pay periods

  1. Full year $2,444.44 x 26/26 = $2,444.44
  2. Partial year $2,444.44 x 13/26 = $1,222.22
  3. Partial year $2,444.44 x 22/26 = $2,068.37

Step 4: Multiply the result of step 3 by a factor of 9.

  1. Full year $2,444.44 x 9 = $22,000.00
  2. Partial year $1,222.22 x 9 = $11,000.00
  3. Partial year $2,068.37 x 9 = $18,615.33

Step 5: Prorate $600 by the number of pensionable pay periods.

  1. Full year $600 x 26/26 = $600
  2. Partial year $600 x 13/26 = $300
  3. Partial year $600 x 22/26 = $507.69

Step 6: Subtract the result of step 5 from the result of step 4;
this result, rounded to the nearest dollar,
is the PA for the 2009 taxation year.

  1. Full year $22,000 - $600 = $21,400
  2. Partial year $11,000 - $300 = $10,700
  3. Partial year $18,615.33 - $507.69 = $18,107.64

Step 7: If the result is greater than $21,400,

  • IMPOSE $21,400
    (In this case, the result does not exceed $21,400.)


1FOR THE 2009 TAXATION YEAR, THE MAXIMUM SALARY USED IN THE
PA CALCULATION WILL BE $136,700.

PENSION ADJUSTMENT WORKSHEET

EMPLOYEE IDENTIFICATION

  • Name:
  • Personal Record Identifier(PRI):
  • Date of Birth:
  • PA Calculation for year:

INFORMATION REQUIRED TO CALCULATE THE PA 

  1. Yearly Maximum Pensionable Earnings (YMPE) for this year $ ______
  2. Pensionable earnings (element 7342) $ ______
  3. Number of pensionable pay periods (element 1182) $ ______
  4. Total number of pay periods in the year (biweekly) $ ______
  5. Annualized pensionable earnings: (B w C) x D $ ______

2 For clients serviced by the Regional Pay System

CALCULATION

Step 1: Annual benefit entitlement (maximum $2,444.44 for 2009
and $2,494.44 for 2010):

If E is equal to or lesser than the YMPE

0.013755 x E
0.013755 x ( ______ ) = $ _________

If E is greater than the YMPE

(0.013755 x YMPE) + (0.02 x [E - YMPE])
(0.013755 x ____ ) + (0.02 x [ ______ - _____ ]) = $ ______ 3

3 For taxation year 2009, if greater than $2,444.44, impose $2,444.44
For taxation year 2010, if greater than $2,494.44, impose $2,494.44

Step 2: Benefit entitlement accrued:


   (Annual benefit entitlement w D) x C

( ____ w ____) x ____ = $ ____ 4

Step 1  (D)    

Step 3: Pension adjustment (maximum $21,400 for 2009 and $21,850 for 2010):
(9 x benefit entitlement accrued)- ($600.00w D x C)

(9 x ____ ) - ($600.00 w ______ x _____) = $ _______ 4

Step 2    (D)    

4 For taxation year 2009, if greater than $21,400, impose $21,400.
For taxation year 2010, if greater than $21,850, impose $21,850.

5 For taxation year 2009 and subsequent years, use appropriate
factor according to year in which employee turns age 65, refer
to the SAM Section 2-6-7 for additional details.