ARCHIVED CD 1994-048

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December 8, 1994 (Revised October 19, 2006)

Ottawa, Canada
K1A 0S5

SUBJECT : Self-Funded Leave

1. PURPOSE

1.1 The purpose of this directive is to provide you with instructions for year end reporting requirements for the self-funded leave program.

In addition, this directive is to advise you of a change in policy for the Québec Pension Plan (QPP) contributions on the amounts deposited into the self-funded leave program.

2. BACKGROUND

2.1 Further to Services Pay Directive 1990-112 (55) dated November 26, 1990, departments are still required to report, in a letter format, the total amount deducted for the self-funded leave in order that the correct earnings be reflected on the statements of remuneration (T4/Relevé 1).

2.2 In addition, the Québec provincial budget has announced that effective May 13, 1994, the amount paid to a depository or a trustee will be considered work income at the time it is paid to the trustee or depository for the purpose of determining the employee and employer contributions to the Québec Pension Plan (QPP) and to the Québec Health Insurance Plan (QHIP).

3. POLICY

3.1 In accordance with the new Québec legislation, amounts deposited under the self-funded leave program from May 13, 1994, onwards are subject to QPP and to QHIP for employees working in Québec. Prior to May 13, 1994, the amounts deposited are not subject to QPP and QHIP.

3.2 The Ministère du Revenu du Québec requests that the amount of salary transferred to a custodian after May 12, 1994 under the self-funded leave program, be reported in the new box Q "Deferred Salary or Wages" on the Relevé 1.

3.3 The amounts deposited under the self-funded leave for employees working in another province will continue to be exempt from the Canada Pension Plan (CPP) contributions.

4. PROCEDURES/INSTRUCTIONS

SELF-FUNDED LEAVE YEAR-END REPORTING REQUIREMENTS

4.1. DEPARTMENT RESPONSIBILITY

As in previous years, department personnel are responsible to report in letter format to their respective paying office the total amounts deducted for the self-funded leave during the entire year for the purpose of reducing Gross Earnings and CPP/QPP Pensionable Earnings as applicable.

In addition, because of the new Québec legislation, departments are required to calculate and report separately the amount deducted under the self-funded leave while the employee was working in Québec after May 12, 1994.

NOTE: Department personnel should verify with their respective paying office the close out date by which the letters must be received in order for the amount to be included on the original Statement of Remuneration forms.

4.2. PAY OFFICE RESPONSIBILITY:

Upon receipt of the department's written notice and after the year end rollover process is complete, the pay office will process a Pay Action Code (PAC) 30 to reduce the previous year Gross Earnings (element 700) and the previous year CPP/QPP Pensionable Earnings (element 706 or 707 as applicable) by the total amount deducted for the self-funded leave program during the entire year.

| The pay office will also process a PAC 30 to increase the previous year element 756 "Self-Funded Leave" by the amount deducted after May 12, 1994 for employees working in Québec.

| The T4/Relevé program will automatically add to the amount of the pensionable earnings box on the T4 and the Relevé 1, the amount in the element 756. The amount in element 756 will also be reported in box Q of the Relevé 1.

5. INQUIRIES

5.1 Any queries on the foregoing may be addressed to your Public Works and Government Services Canada (PWGSC) Client Service Centre as per Compensation Directive 1994-039, dated October 6, 1994.

Original Signed by
G. Blacker

P. Charko
Director General
Compensation Sector
Government Operational Service Branch

Reference: CJA 9006-12, 9007-7, 9007-8