ARCHIVED CD 1995-047

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October 31, 1995 (revised July 22, 2008)

Ottawa, Canada
K1A 0S5

SUBJECT: Budget February 1995 Provisions

1. PURPOSE

1.1. The purpose of this Compensation Directive is to provide you with additional information in relation to the provisions announced in the February 1995 Budget.

2. BACKGROUND

2.1. The attached Section VII and VIII of the Budget Directive provides detailed information on the Pre-retirement Transition Leave and the Leave with Income Averaging Programs.

3. PROCEDURES/INSTRUCTIONS

3.1. The Budget Directive will be updated and/or revised as new information becomes available. The changes to the Budget Directive will be issued in the form of a revision or addition to the Directive.

3.2. Please remove the current pages of Sections VII and VIII and replace with the attached documents.

4. INQUIRIES

4.1. Any request for information regarding the contents of the attached document should be addressed to your PWGSC Client Services Centre, as per Compensation Directive 1994-039 dated October 6, 1994.



Original Signed by
P. Charko

P. Charko
Director General
Compensation Sector
Government Operational Service


Reference: CJA 9032-40, CJA 9006-24-10


Top of Page

SECTION VII

PRE-RETIREMENT TRANSITION LEAVE (PRL)

TABLE OF CONTENTS

  1. PURPOSE
  2. POLICY
  3. PROCEDURES/INSTRUCTIONS
  4. APPENDICES

VII. PRE-RETIREMENT TRANSITION LEAVE (PRL)

1 PURPOSE

1.1. The purpose of this section is to provide the policy and pay input procedures for the new work arrangement called Pre-retirement Transition Leave (PRL).

1.2. This directive must be read in conjunction with Treasury Board Information Package "Know your Options".

2 POLICY

2.1. The Pre-retirement Transition Leave program is available to indeterminate employees in a department for whom the Treasury Board is the employer, as set out in Part 1 of Schedule 1 of the Public Service Staff Relations Act.

2.2. Pre-retirement Transition Leave is a new leave program which allows indeterminate employees, who are within two years of becoming eligible for an unreduced pension, to reduce their work week by up to forty percent.

2.3. Employees may take Pre-retirement Leave for up to two years, but must agree to resign at the end of the leave period.

2.4. Employees must complete the Pre-retirement Transition Leave request form and obtain approval from their respective manager. Upon approval, the manager will forward the form to their Compensation Specialist for pay processing.

2.5. Departments are responsible to establish their own lead time for pay input processing. Timely processing is critical in order to avoid salary overpayments and their subsequent recovery action from a reduced salary.

2.6. As outlined in the Treasury Board document "Know Your Options", this leave arrangement can be altered under exceptional circumstances only. Therefore, employees should be informed of the following pay implications before proceeding with this leave arrangement:

  • The employee's salary and salary related allowances will be reduced during the transition period to account for the shorter work week.
  • The existing Leave Without Pay (LWOP) regulations and policies governing the entitlement to salary and allowances will apply.
  • Canada/Quebec Pension Plan contributions will be based on the reduced salaries.
  • Public Service Superannuation Plan (PSSA) and Insurance plan (SDB, DI, LTD) contributions will be based on the employee's full salary.
  • All voluntary deductions (i.e. Credit Union, Canada Savings Bonds) will continue to be collected only where there are sufficient funds.

3. PROCEDURES / INSTRUCTIONS

3.1. Departments are responsible to calculate and report a reduced basic salary and if applicable, a reduced rate for each affected allowance.

CALCULATING REDUCED SALARIES

3.2. The formula for calculating reduced salaries and allowances is as follows:

  • Step 1
    Number of reduced/non entitled days x salary = Salary reduction number of paid days in a year

    NOTE: Number of paid days per year Division factors such as 26.088 cannot be used in this formula to establish the reduced salary rate.
  • Step 2 Salary minus amount of salary reduction = reduced salary. To assist departments, an example of how to calculate and report reduced basic salary and allowances is contained in Appendix "A" of this directive.

CHANGES TO ON-LINE PAY REPORTING

3.3. There is a new screen called Pre-retirement Transition Leave (PRL). This screen is to be used by Departments to report a commence, amend or stop action of:

  • The reduced basic salary.
  • The effective from and to dates of the PRL transition period.
  • The total number of reduced hours per week.
  • The leave status indicator (when on-line pay reporting is used this indicator is automatically imposed).

3.4. The entitlement commence and amend screens (ENC and ENA) are modified to permit the reporting of reduced allowance rates and to report the PRL leave status indicator with each rate.

3.5. The on-line inquiry screens are modified to reflect PRL transactions and elements.

CHANGES TO INPUT PROCEDURES FOR DSS 25l7T/ 2549 REPORTING

3.6. A PAC 18C/A/S 346 is to be used to report:

  • The effective from and to dates of the PRL period.
  • The reduced basic salary.
  • The total number of reduced hours per week.
  • The total number of reduced hours per week.

3.7. The PAC 18C and PAC 18A procedures for entitlements are modified to permit departments to report a reduced allowance rate in field 69 and the PRL leave status indicator in field 70 for each allowance affected by PRL.

3.8. Pay input reporting instructions for both on-line and DSS 2517T/2549 are contained in Appendix "B" of this directive.

CHANGE TO THE REGIONAL PAY SYSTEM

3.9. The Regional Pay System has been modified to include new elements and fields on the Master Employee Record (MER) and new processes that will calculate and issue reduced salary payments during the PRL period. These changes will be operational effective November 1st, 1995.

3.10. The following sections describe the changes to the pay system.

3.11. There are new pay account elements and fields on the MER to record reduced salary and allowances as follows:

Element 113 - Leave Status Indicator. To record the leave status of the pay account.

Status Code

3 - Employee is on PRL.

6 - Employee is no longer on PRL (automatically imposed by the pay system).

Element 114 - Reduced Salary

To record the reduced basic salary.

The above pay elements 113 and 114 will be used to issue a reduced basic salary, during the time the employee is on Pre-retirement Transition Leave.

Element 115 - PRL Hours

To record the number of reduced hours per week.

Element 116 - End of Leave Date

To record the end date of the PRL.

PAC 18 - Field 69 on the MER

To record the reduced allowance rate.

The reduced allowance rate(s) entered on the PAC 18C/A or ENA/ENC transactions will be entered in field 69 of the existing allowance line, as posted on the Master Employee Record (MER). This rate will be used instead of the full allowance rate during the time the employee is on PRL.

PAC 18 - Field 70 on the MER

To record the leave status indicator on each reduced allowance rate. The values for this field are the same as described for element 113.

This indicator must be entered by the department in field 70 on the PAC18C/A or ENC/ENA for each reduced allowance rate reported.

3.12. Three months prior to the end of the Pre-retirement Transition Leave period, the pay system will produce a notification report to alert departments that the end date of the leave is approaching and that further pay input is required (PAC 02). The notification report will continue to be produced monthly until the end date is reached.

3.13. Upon processing of a PAC 02, the pay system will automatically reinstate the pay account to full salary, including all affected allowances. If no pay action is done, the system will continue to issue pay based on the reduced salaries until such time as a PAC 02 is processed.


CHANGES DURING PRL

3.14. The following sections describe the procedures that departments are to follow in the event there are pay changes during the PRL transition period. Changes to PRL Reduced Hours The department must recalculate the reduced salary and allowances, if applicable, and report changes to the reduced rates using the PRL pay actions.

Cancellation of PRL

The department reports a PAC 18S 346 or a stop action on the PRL on-line screen. Upon processing of the pay transaction the pay system will automatically reinstate the pay account to full salary and status, including affected allowances.

Changes to Basic Salary

The department follows normal procedures and reports the full salary and full former rate, for any retroactivity, using the appropriate pay action (i.e. promotion).

The department must also recalculate and report the amended reduced basic salary using the PRL pay actions.

Supplementary payments cannot be automatically issued for changes to full or reduced basic salary. The pay office is responsible for any retroactive payments or adjustments.

Changes to Allowances

If the change affects reduced allowance rates, then the department will recalculate the allowance rate and report via a PAC 18A/ENA, the full rate (field 66), the amended reduced allowance rate (field 69) and the PRL status indicator (field 70).

In this case, supplementary payments cannot be issued automatically. The pay office is responsible for any retroactive payments or adjustments.

If there are changes to an on-going allowance rate, that does not have a reduced allowance rate, the department reports the full allowance rate and full former rate for retroactivity purposes. The PRL leave status indicator (field 70) is not to be completed.

In this circumstance, supplementary payments will be automatically issued.

One-Time Entitlements

Departments should report the full salary/allowance rate including the full former rate for any retroactivity (i.e. overtime, LWOP).

For these types of pay transactions, supplementary payments will be automatically issued.

Changes in Employee Status

In situations where there are any changes in employee status (i.e. TSOS, SOS), please refer to the existing Treasury Board policy and if applicable, follow the above procedures for amending or cancelling the leave arrangement.

PAY OFFICE RESPONSIBILITY

3.15. The pay office will be responsible to make all retroactive salary adjustments to the pay account upon the processing of PRL pay related transactions.

4. APPENDICES

APPENDIX "VII-A-1"

PRE-RETIREMENT TRANSITION LEAVE


CALCULATION OF REDUCED SALARY

FULL TIME
Example

Annual Salary $ 33,092.00

Pay Equity Allowance $ 994.00

Bi-weekly Paid Account (7c) 26 pay periods x 10 days = 260 paid days per year

Scheduled Work Week 37.50

Assigned Work Week 37.50

Pre-retirement Transition Leave Period October 16, 1995 to March 31, 1997

Number of PTL Reduced Hours Per Week 15 hours

Number of PTL Reduced Days Per Week 15 hours = 2 days x 52 weeks = 104 days per year

Formula

Step 1

Number of reduced days (or non entitlement) per year x salary = amount of salary reduction

number of paid days per year

Step 2

Salary minus amount of salary reduction = reduced salary

Reduced Basic Salary Calculation

104 reduced days x $33,092.00 = $13,236.80

$33,092.00 - $13,236.80 = $19,855.20

Reduced Basic Salary = $19,855.20

Verification of Calculation

Salary due for the year:

  • 156 days @ $33,092.00 = $19,788.22
  • Salary to be paid by the pay system:
  • 260 days @ $19,855.20 = $19,788.22

Reduced Allowance Calculation

104 non-entitled days x $994.00 = $397.60

260

$994.00 - $397.60 = $596.40

Reduced Allowance Rate = $596.40


Verification of Calculation

Allowance due for the year:

  • 156 days @ $ 994.00 = $ 594.38

Allowance to be paid by the pay system:

  • 260 days @ $ 596.40 = $ 594.38
PART-TIME
Example

Annual Salary $33,092.00

Pay Equity Allowance $ 994.00

Bi-weekly Paid Account (7c) 26 pay periods x 6 days = 156 paid days per year

Scheduled Work Week 37.5

Assigned Work Week 22.50 (3 days per week)

Pre-retirement Transition Leave Period October 16, 1995 to March 31, 1997

Number of PTL Reduced Hours Per Week 7.5 hours

Number of PTL Reduced Days Per Week 7.5 hours = 1 day x 52 weeks = 52 days per year

Formula

Step 1

Number of reduced days (or non entitlement) per year x salary

= amount of salary reduction

number of paid days per year

Step 2

Salary minus amount of salary reduction = reduced salary

Reduced Basic Salary Calculation

52 reduced days x $33.092.00 = $11,030.67

156

$33,092.00-$11,030.67 = $22,061.33

Reduced Basic Salary = $22,061.33

Note: The pay system will further pro-rate this reduced salary rate based on the assigned work week as shown in the following verification.

PART-TIME

Verification of Calculation

Salary due for the year:

  • 4 days x 26 pay periods = 104 days
  • 104 days @ $33,092.00 = $13,192.15

Salary paid by the pay system:

  • 6 days x 26 pay periods = 156 days
  • 156 days @ $22,061.33 = $13,192.15
Reduced Allowance Calculation

52 non-entitled days x $994.00 = $331.33

156

$994.00-$331.33 = $662.67

Reduced allowance rate $662.67

Note: The pay system will further pro-rate this reduced allowance rate based on the assigned work week as shown in the following verification. Please refer to the Personnel-Pay Input Manual section 9-5-2 page 24, for the list of allowances pro-rated by the pay system. For all other allowances not automatically pro-rated by the pay system, the departments must further calculate the reduced rate to account for the assigned work week.


Verification of Calculation

Allowance due for the year:

  • 4 days x 26 pay periods = 104 days
  • 104 days @ $994.00 = $396.26

Allowance paid by the pay system:

  • 6 days x 26 pay periods = 156 days
  • 156 days @ $662.67 = $396.26


APPENDIX "VII-B-1"

EXAMPLE REPORTING PRE-RETIREMENT TRANSITION LEAVE REDUCED BASIC SALARY

PDPRL01D-001(701) PUBLIC WORKS AND GOV. SERVICES CANADA 95/09/14

PAY PRE-RET TRANSITION LEAVE ACCOUNT MAINTENANCE



NEXT <

PAYCYC:7C

PP:21

051095/181095

CUTOFF041095

0303/ 52 764 591

L AMYOTTE

 

82 DSS SEQ:

/000000




*** ENTER THE TRANSITION PERIOD AND THE REDUCED SALARY***

MODIFIER:C EFF FR:16 10 95 1 EFF TO: 31 03 97 2

RATE BASE: 9 REDUCED RATE: 19855.200



*** ENTER THE REDUCED WORK WEEK HOURS ***

HI/D/W IND:H   NUM H/D/W: 15.00.



*** USE THE ENTITLEMENT AMEND SCREEN TO REDUCE ON-GOING ENTITLEMENTS***

APPENDIX "VII-B-2"

EXAMPLE

REPORTING PRE-RETIREMENT TRANSITION LEAVE REDUCED BASIC SALARY

PDENA15D-001(701) PUBLIC WORKS AND GOV. SERVICES CANADA 95/09/14

PAY ENTITLEMENT AMEND ACCOUNT MAINTENANCE



NEXT <

PAYCYC:7C

PP:21

051095 / 181095

CUT OFF 041095

0303 / 52 764 591

L AMYOTTE

 

82 AGR SEQ:

/000000

ENT CD: 144

EFF FR: 16 10 95 1

EFF TO:

RATE BASE: 9

 

RATE: 994.000

FRM RATE: 596.400

POS NUM:   POS CLASS:

ACCNT CDNG:




***LEAVE WITH INCOME AVERAGING / PRE-RETIREMENT TRANSITION LEAVE
IF APPLICABLE, ENTER THE CORRECT CODE ("1", "2" OR "3"): 3 *** COMPLETE FOR CLOSED PERIOD IN PAST OR FOR RETRO PERIOD-EFF FR DATE TO CURRENT PAY PERIOD START DATE

Hl/D/W IND:   NUM H/D/W: .00




***COMPLETE (A) IF ENT CD 070 ENTERED / COMPLETE (B) IF ENT CD 080 ENTERED

(A) SUPV GRID:   (13)ITD GRID:




Note: Please refer to the Personnel-Pay Input Manual (PPIM) section 9-5-2 page 24 , for the list of allowances pro-rated by the pay system based on assigned work week. For these allowances, the department reports the reduced allowance rate and the pay system will automatically pro-rate the reduced allowance rate based on the employee's assigned work week. For all other allowances not pro-rated by the pay system, the departments must further calculate the rate to account for the assigned work week and then report the reduced rate.

SECTION VIII

LEAVE WITH INCOME AVERAGING(LIA)


TABLE OF CONTENTS

  1. PURPOSE
  2. POLICY
  3. PROCEDURES/INSTRUCTIONS
  4. APPENDICES
VIII. LEAVE WITH INCOME AVERAGING (LIA)
1 PURPOSE

1.1. The purpose of this section is to provide the policy and pay input procedures for the new work arrangement called Leave with Income Averaging (LIA).

1.2. This directive must be read in conjunction with the latest Treasury Board "Know Your Options" document.

2 POLICY

2.1. The Leave with Income Averaging option is available to employees of departments for whom Treasury Board is the employer as set out under Part 1, Schedule 1 of the Public Service Staff Relations Act.

2.2. Leave with Income Averaging is a new leave program which allows indeterminate employees to take blocks of leave without pay (LWOP) of between 5 weeks and 3 months, within a 12 month period, and continue to receive a pro-rated salary over the same 12 month period that the LIA covers. The maximum number of "blocks" is two blocks in a 12 month period, and the maximum period of absence in a 12 month period is 3 months.

2.3. The employee's salary during the 12 month period of the LIA will be averaged to account for the period(s) of LWOP chosen. For example, an employee who chooses a 3 month period of LWOP will receive salary at a rate of approximately 75 % for the 12 month period covering the LIA.

2.4. The public Service Superannuation Plan, Insurance coverage and contributions will be based on the employee's full salaries. The employee may choose to pay full PSSA and Supplementary Death Benefit (SDB) contributions from the reduced salary during the twelve month period or pay PSSA/SDB contributions based on the reduced salary and defer the recovery of PSSA and SDB deficiencies until return to duty from the period of LWOP.

2.5. Employees must complete a LIA request form and forward it to their manager for approval. Upon approval, the manager forwards the form to their Compensation Specialist for pay processing.

2.6. Departments are responsible for establishing their own lead time for pay input processing. Timely processing is critical in order to avoid delays to the income averaging period.

2.7. As outlined in the Treasury Board document "Know Your Options", LIA arrangements can only be altered under exceptional circumstances. Therefore, employees should be made aware of the following pay implications before proceeding with this arrangement:

  • Salary and affected allowances will be reduced over a twelve month averaging period to account for the period(s) of LWOP.
  • The existing LWOP regulations and policies governing the entitlement to salaries and allowances will apply.
  • Canada/Quebec Pension Plan deductions will be calculated based on the reduced salary.
  • Unemployment insurance premiums will be calculated based on the full salary but will not be deducted during the LWOP period.
  • Public Service Superannuation Plan (PSSA) and Supplementary Death Benefit (SDB) coverage will be based on the employee's full salary. However, the employee may choose to pay the required contributions as follows:
    • Option 1

      The employee can continue to pay PSSA and SDB contributions from the reduced salary but based on the unreduced salary rates. This will minimize fluctuations in net pay.

    • Option 2

      The employee can opt to contribute to PSSA and SDB based on the reduced salary. On return to duty, the deficiency recoveries between the reduced and unreduced salary rates will then be collected. That is, the PSSA and SDB deficiencies will be recovered on return to duty immediately following the period of LWOP (NOT AT THE END OF THE AVERAGING PERIOD). Recovery will be made over twice the period of the actual leave. This method will result in fluctuations in the net pay during the period the deficiencies are collected.

    • All other Insurance Plan contributions (Disability Insurance, Public Service Management Insurance Plan, etc.) will continue to be deducted at the normal rate.
    • Union dues will be deducted at the full monthly rate except when the employee is on leave without pay for the entire calendar month.
    • All other voluntary deductions (i.e. Credit Union, Canada Savings Bonds) will continue to be collected only where there are sufficient funds.

2.8. The LIA period is to be administered as follows:

  • The 12 month LIA period is based on the employee's payment frequency (i.e. 26 pay periods for a bi-weekly account)
  • The LIA period must start on the first day of a current processing pay period and end on the last day of the final pay period.
  • Example

    An employee who requests LIA from December 1, 1995 to November 30, 1996 and is a bi-weekly pay account will have a pay period start date of November 30, 1995 and a LIA end date of November 27, 1996 which is the last day of the 26th pay period.
  • The averaging period cannot be extended beyond 12 months.
3. PROCEDURES I INSTRUCTIONS

3.1. Departments will be responsible to calculate and report a reduced basic salary and if applicable, a reduced rate for each affected allowance. At the same time that the reduced salary and allowances are reported, Departments must also report the leave with income averaging period and report the actual dates of the future leave without pay period(s).

CALCULATING REDUCED SALARIES

3.2. The formula for calculating reduced salaries and allowances is as follows:

  • Step 1
    • Number of days of LWOP (or non entitlement) x salary = salary reduction
      number of paid days per year

      NOTE: Number of paid days per year
    • Division factors such as 26.088 cannot be used in this formula to establish the reduced salary rate.
  • Step 2
    • Salary minus amount of salary reduction = reduced salary
    • To assist departments, instructions on how to calculate the reduced salary and allowances are contained in Appendix "A" of this directive.

CHANGES TO THE ON-LINE PAY REPORTING

3.3. There is a new screen called Leave Income Averaging (LIA). This screen will be used by departments to report a commence, amend or stop action of the following:

  • The effective from and to dates of the LIA period.
  • The reduced salary.
  • The PSSA/SDB options/leave status indicator. For a description of the leave status indicators, see paragraph 3.12.

3.4. There is a new reduction of earnings screen called Leave with Income Averaging - LWOP (LIW). This screen will be used to report a commence or stop action of the following:

  • The LWOP period(s).
  • The number of uninsurable hours for each period of LWOP for unemployment insurance premium calculations.

3.5. The entitlement commence and amend screens (ENC and ENA) are modified to permit the reporting of reduced allowance rates for LIA and the PSSA/SDB option/leave status indicator.

3.6. The on-line inquiry screens are modified to reflect LIA transactions and status elements.

CHANGES TO INPUT PROCEDURES FOR DSS 2517T/ 2549 REPORTING

3.7. A PAC 18C/A/S 306 will be used to report:

  • The effective from and to dates of the LIA period.
  • The reduced basic salary.
  • The PSSA/SDB options/leave status indicator.

3.8. PAC 15C/S 306 will be used to report:

  • The effective from and to dates of the LWOP period(s) to a maximum of two periods.
  • The number of uninsurable hours for each period of LWOP for unemployment insurance premium calculations.

3.9. The PAC 18C and PAC 18A procedures for entitlements are modified to permit departments to report a reduced allowance rate in field 69 and the PSSA/SDB leave status indicator in field 70 for each allowance affected by LIA.

3.10. Detailed pay input reporting instructions for both on-line and DSS 2517T/2549 reporting are contained in Appendix "B" of this directive.

CHANGES TO THE REGIONAL PAY SYSTEM

3.11. The Regional Pay System has been modified to include new elements and fields on the Master Employee Record (MER) and new processes to calculate and issue pay based on the reduced salaries during the LIA period. These changes will be operational November 1st 1995. The following sections describe the changes to the pay system.

3.12. The following new pay account elements and fields have been included on the Master Employee Record to record reduced salary and allowances.

Element 113 - Leave Status Indicator

To record the leave status of the pay account and the chosen option for PSSA and SDB contributions as follows:

Leave status code
1 Employee is on LIA and has chosen PSSA and SDB option 1.
2 Employees is on LIA and has chosen PSSA and SDB option 2.
4 Employee is no longer on LIA. PSSA and SDB contributions option1 (imposed by pay system).
5 Employee is no longer on LIA. PSSA and SDB contributions option 2 (imposed by pay system).

Element 114 - Reduced Salary

To record the reduced basic salary while the employee is on LIA.

Elements 113 and 114 will be used instead of the regular elements to pay a basic reduced salary and to determine PSSA/SDB contributions during the time the employee is on LIA.

Element 116 - End of Leave Date

To record the end date of the income averaging period.

PAC 18 - Field 69 on the MER

To record the reduced allowance rate.

The reduced allowance rate(s) entered on the PAC 18C/A or ENA/ENC transactions will be entered in field 69 of the existing allowance line as posted on the Master Employee Record. This rate will be used instead of the full allowance rate during the time the employee is on LIA.

PAC 18 - Field 70 on the MER

To record the leave status indicator on each reduced allowance rate.

The values for this field are the same as described for element 113. This indicator is to be entered by the department in field 70 on a PAC 18C/A or ENC/ENA transactions for each reduced allowance rate reported.

3.13. When the department reports the PAC 15C 306/LIW action(s), this LWOP record automatically controls the stop and commence of unemployment insurance premiums and union dues deductions during the periods of leave.

The PAC 15C 306 will appear on the MER for control purposes only. It will not reduce salary.

3.14. When PSSA/SDB option 2 applies, the pay system will produce, at the end of each period of LWOP, a notification report to the pay office for collection of PSSA and SDB deficiencies

3.15. At the end of the LIA period, the pay system will:

  • Automatically reinstate the pay account to full salary, including all affected allowances.
  • Produce a notification report for departments and pay offices to verify the pay account salaries and status.

CHANGES DURING LIA

3.16. The following sections describe the procedures that departments are to follow in the event there are pay changes during the LIA arrangement.

Changes to LIA LWOP dates

The department will report a stop and start of the LWOP periods using the new LIW on-line screen or a PAC 15S/C.

If required, the department must recalculate the reduced salary and allowances and report an amended reduced salary and allowances using the applicable LIA pay actions.

Cancellation of LIA arrangement

The department reports a PAC 18S 306 or a stop action on the LIA on-line screen. Upon processing of the pay transaction, the pay system will automatically reinstate the pay account to full salary and status, including affected allowances. A notification report is produced to departments and pay offices for verification of the pay account.

Changes to Basic Salary

If there are changes to the basic salary during the LIA period (i.e. promotion), the department reports the full salary, and full former rate for retroactivity purposes, using the appropriate pay action (i.e. PAC 06 - promotion).

At the same time, the department must also recalculate the reduced salary and report the amended reduced salary using the LIA pay transactions.

Supplementary payments cannot be automatically issued for changes to full or reduced basic salary. The pay office is responsible for any retroactive payments or adjustments.

Examples of calculations of changes to basic salary are provided in Appendix "C" of this directive.

Changes to Allowances

If the change affects reduced allowance rates, then the department will recalculate the reduced rate and report via a PAC 18A/ENA, the full rate (field 66), the amended reduced allowance rate (field 69) and the LIA status code (field 70).

In this case, supplementary payments cannot be issued automatically. The pay office is responsible for the retroactive payment or adjustment.

If there are changes to an on-going allowance rate, that does not affect the reduced allowance rate, the department reports the full allowance rate and the full former rate for retroactivity purposes. The LIA status code is not to be reported.

In this circumstance, supplementary payments will be automatically issued.

One-Time Entitlements

Departments should report the full entitlement rate and the full rate as a former rate for any retroactivity (i.e. overtime, LWOP) . For these types of transactions, supplementary payments can be automatically issued.

Changes in Employee Status

In situations where there are any changes to employee status (i.e. TSOS, SOS), please refer to existing Treasury Board policies and if applicable, follow the procedures for amending salaries or canceling the LIA arrangement.

PAY OFFICES RESPONSIBILITY

3.17. Pay offices will be responsible for the following actions:

  • Make adjustments to deductions and entitlements that cannot be processed automatically, i.e. retroactive changes to full and reduced salaries during the LIA period.
  • To collect PSSA and SDB deficiencies at the end of each LWOP period, when PSSA /SDB option 2 is chosen.

4 APPENDICES

APPENDIX "VIII-A-1"

LEAVE WITH INCOME AVERAGING CALCULATION OF REDUCED SALARY

FULL TIME
Example

Annual Salary $33,092 .00

Bilingual Bonus $ 800.00

Bi-weekly Paid Account (7c) 26 pay periods x 10 days = 260 paid days per year

Scheduled Work Week 37.50

Assigned Work Week 37.50

Leave Period January 8, 1996 to March 1, 1996 (40 Days)

Days of LWOP Basic Salary - 40 Days

Day of Non-entitlement Bilingual Bonus - 44 days

LIA Period November 16, 1995 - November 13, 1996

PSSA/SDB Option Option 1 - PSSA/SDB on full salary

Formula

Step 1

Number of days of LWOP (or non entitlement) per year x salary = amount of salary reduction number of paid days per year

Step 2

Salary minus amount of salary reduction = reduced salary


Reduced Basic Salary Calculation

40 days of LWOP x $33.092.00 = $5,091.08

260

$33,092.00-$5,091.08 = $28,000.92

Reduced Basic Salary = $28,000.92

Verification of Calculation

Salary due for the LIA period:

  • 16/11/95 to 07/01/96 37 days @ $33,092.00 = $ 4,693.36
  • 08/01/96 to 01/03/96 40 days @ $ 0.00 = $ 0.00.
  • 02/03/96 to 13/11/96 183 days @ $33,092.00 = $23.213.11
  • Total $27,906.47

Salary to be paid by the pay system during the LIA period:

16/11/95 to 13/11/96 260 days @ $28,000.92 = $27,906.47

Reduced Allowance Calculation 44 days of non-entitlement x $800.00 = $135.38
260

$800.00-$135.38 = $664.62

Reduced Allowance Rate = $664.62

Verification of Calculation

Allowance due for the LIA period:

  • 16/11/95 to 31/12/95 32 days @ $800.00 = $ 98.14
  • 01/01/96 to 29/02/96 44 days @ $ 0.00 = $ 0.00
  • 01/03/96 to 13/11/96 184 days @ $800.00 = $564.24
  • Total $662.38

Allowance to be paid by the pay system during LIA:

  • 16/11/95 to 13/11/96 260 days @ $664.62 = $662.38
PART TIME
Example

Annual Salary $33,092 .00

Bilingual Bonus $800.00

Bi-weekly Paid Account (7c) 26 pay periods x 6 days = 156 paid days per year

Scheduled Work Week 37.5

Assigned Work Week 22.50 (3 days a week M/W/F)

Leave Period January 8, 1996 to March 1, 1996 (40 Days)

Days of LWOP Basic Salary - 24 days (AWW)

Days of Non-entitlement Bilingual Bonus - 26 days (AWW)

LIA Period November 16, 1995 - November 13, 1996

PSSA/SDB Option Option 1 - PSSA/SDB on full salary

Formula

Step 1

Number of days of LWOP (or non entitlement) per year x salary = amount of salary reduction

number of paid days per year

Step 2

Salary minus amount of salary reduction = reduced salary

Reduced Basic Salary Calculation

24 days of LWOP x $33.092.00 = $5,091.08

156

$33,092.00-$5,091.08 = $28,000.92

Reduced Basic Salary = $28,000.92

Note: The pay system will further pro-rate this reduced salary rate based on the assigned work week as shown in the following verification.

Verification of Calculation

Salary due for the LIA period:

  • 16/11/95 to 07/01/96 22 days @ $33,092.00 = $ 2,790.65
  • 08/01/96 to 01/03/96 24days @ $ 0.00 = $ 0.00
  • 02/03/96 to 13/11/96 110 days @ $33,092.00 = $13,953.23
  • Total   $16,743.88

Salary to be paid by the pay system during the LIA period:

  • 16/11/95 to 13/11/96 156 days @ $28,000.92 = $16,743.88
Reduced Allowance Calculation

26 non-entitled days x $800.00 = $133.33

156

$800.00 - $133.33 = $666.67

Reduced Allowance Rate = $666.67

Note: The pay system will further pro-rate this reduced allowance rate based on the assigned work week as shown in the following verification. Please refer to the Personnel-Pay Input Manual section 9-5-2page 24, for the list of allowances pro-rated by the pay system. For all other allowances not automatically pro-rated by the pay system, the departments must further calculate the reduced rate to account for the assigned work week.

Verification of Calculation

Allowance due for the LIA period:

  • 16/11/95 to 31/12/95 19 days @ $800.00 = $ 58.26
  • 01/01/96 to 29/02/96 26 days @ 0.00 = $ 0.00
  • 01/03/96 to 13/11/96 111days @ $800.00 = $340.39
  • Total   $398.65

Allowance to be paid by the pay system during the LIA period :

  • 16/11/95 to 13/11/96 156 days @ $666.67 = $398.65

APPENDIX "VIII-B-1"

EXAMPLE REPORTING LEAVE WITH INCOME AVERAGING REDUCED BASIC SALARY

PDLIA01D-001(701)

PUBLIC WORKS AND GOV. SERVICES CANADA

95/09/14

PAY

LEAVE WITH INC AVERAGING

ACCOUNT MAINTENANCE

>NEXT

< PAY CYC:7C

PP:24 161195/291195

CUT OFF 151195

0303/ 52 764 591

K AMYOTTE

82 DSS SEQ:

/000000

*** ENTER THE LIA PERIOD AND THE REDUCED SALARY***

MODIFIER:C EFF FR:16 11 95 1 EFF TO:13 11 96 2

RATE BASE: 9 REDUCED RATE: 28000.920



***ENTER '1'IF THE EMPLOYEE IS OPTING FOR PSSA ON FULL SALARY OR '2'***
IF EMPLOYEE ELECTS TO PAY DEFICIENCIES ON RETURN TO DUTY: 1 ***TRANSFER TO LIW(LWOP FOR LEAVE WITH INCOME AVERAGING) SCREEN *** TO ENTER THE LEAVE WITHOUT PAY ***USE THE ENTITLEMENT AMEND SCREEN TO REDUCE ON-GOING ENTITLEMENTS***

APPENDIX "VIII-B-2"

EXAMPLE REPORTING LEAVE WITH INCOME AVERAGING LWOP PERIOD

PDLIW01D-001(701)

PUBLIC WORKS AND GOV. SERVICES CANADA

95/09/14

PAY

LEAVE WITH INC AV. LWOP

ACCOUNT MAINTENANCE

NEXT

PAY CYC:7C

PP:24 161195 / 291195

0303 / 52 764 591

K AMYOTTE

82 DSS SEQ:

/000000

*** ENTER THE PERIOD OF LEAVE WITHOUT PAY***

MODIFIER: C EFF FR: 08 01 96 1 EFF TO: 01 03 96 2

H/D/W IND: D NUM H/D/W: 40.00.

NUMBER OF NON-Ul-HOURS - FIRST PAY PERIOD: 22.50.
LAST PAY PERIOD: 52.50.



*** USE THE ENTITLEMENT AMEND SCREEN TO REDUCE ON-GOING ENTITLEMENTS*** Notes: 1. Unemployment Insurance premiums In the above example, the lwop period is from January 8 to March 1,1996 inclusive. The first pay period of the leave is from December 28,1995 to January 10,1996. Therefore, there are 22.50 hours (7.5 hours x 3 days) in this pay period that are not to be counted in the calculation of UI premiums. The last pay period of the leave is from February 22,1996 to March 6,1996. Therefore, there are 52.50 (7.5 x 7 days) in this pay period that are not to be counted in the calculation of UI premiums. 2. If required, refresh this screen and report the second period of lwop.

APPENDIX "VIII-B-3"

EXAMPLE

REPORTING LEAVE WITH INCOME AVERAGING REDUCED ALLOWANCE RATE

PDENA15D-001(701)

PUBLIC WORKS AND GOV. SERVICES CANADA

95/09/14

PAY

ENTITLEMENT AMEND

ACCOUNT MAINTENANCE

NEXT

PAY CYC: 7C

PP: 24 161195 / 291195

CUTOFF 151195

0303 / 52 764 591

K AMYOTTE

82 DSS SEQ :

/ 000000

ENTCD:141 EFF FR:16 11 95 1 EFF TO:

RATE BASE: 9 RATE: 800.000 FRM RATE: 664.620

POS NUM:

POS CLASS:

ACCNT CDNG:

*** LEAVE WITH INCOME AVERAGING / PRE-RETIREMENT TRANSITION LEAVE

IF APPLICABLE, ENTER THE CORRECT CODE ('1', '2' OR '3'): 1

*** COMPLETE FOR CLOSED PERIOD IN PAST OR FOR RETRO PERIOD-EFF FR DATE

TO CURRENT PAY PERIOD START DATE

H/D/W IND: NUM H/D/W: .00

*** COMPLETE (A) IF ENT CD 070 ENTERED / COMPLETE (B) IF ENT CD 080 ENTERED

(A) SUPV GRID: (B)ITD GRID:

Note: Please refer to the Personnel-Pay Input Manual (PPIM) section 9-5-2 page 24, for the list of allowances pro-rated by the pay system based on the assigned work week. For these allowances, the department reports the reduced allowance rate and the pay system will automatically pro-rate the reduced allowance rate based on the employee's assigned work week. For all other allowances not pro-rated by the pay system, the departments must further calculate the rate to account for the assigned work week and then report the reduced rate.

APPENDIX "VIII-C-1"

CHANGES TO SALARY

This method of pay reporting is used where changes to salary, such as promotion, or changes to allowances require the reduced salary to be recalculated.

Example:

  • Substantive Basic Salary: $33,092.00
  • Reduced Salary: $24,819.00
  • Scheduled Work Week: 37.50
  • Assigned Work Week: 37.50
  • Leave Period: June 1, 1996 to August 31, 1996
  • LIA period: November 16, 1995 to November 13, 1996
  • Promoted @ $38079.00 effective March 1, 1996
Recalculate the Reduced Salary:

Step 1

Calculate the salary due for the LIA period.

16/11/95 - 29/02/96 76 Days @ $33,092.00 $ 9,640.42

01/03/96 - 13/11/96 119 Days @ $38,079.00 $17,369.68

Total   $27,010.10

Step 2

Calculate the LIA reduced salary received prior to the promotion date.

16/11/95 - 29/02/96 76 Days @ $24,819.00 $7,230.31

Step 3

Determine balance of salary due.

Salary Due $27,010.10

Less Salary Received -$ 7,230.31

Balance of Salary $19,779.7

9

Step 4

Calculate the amended reduced salary rate.

Balance of Salary Due x Daily Factor Remaining number of days from date of salary change to end of LIA period

$19,779.79 x 260.88 =$28,044.30

184

Report pay action for the basic salary rate

PAC 06 A 001

01/03/96

$38,079.00

Report pay action for the reduced salary rate

PAC 18 A 346

01/03/96

$28,044.30

Verification

SALARY PAID DURING LIA PAY PERIODS WITH ABOVE ACTION:

16/11/95 - 29/02/96 76 days @ $24,819.00 $ 7,230.31

01/03/96 - 13/11/96 184 days @ $28,044.30 $19,779.79

TOTAL   $27,010.10

SALARY DUE DURING THE LIA PERIOD:

16/11/95 - 29/02/96 76 days @ $33,092.00 $ 9,640.42

01/03/96 - 31/05/96 66 days @ $38,079.00 $ 9,633.61

01/06/96 - 31/08/96 65 days @ $ 0.00 $ 0.00

01/09/96 - 13/11/96 53 days @ $38,079.00 $ 7,736.07

TOTAL   $27,010.1


APPENDIX "VIII-C-2"


CHANGES TO SALARY

This method of pay reporting is used where changes to salary, such as defined periods of acting pay, or changes to allowances are to be paid only for the 'at work' portion of the LIA period.

Example:

Employee Information:

  • Substantive Basic Salary: $33,092.00
  • Reduced Salary: $24,819.00
  • Scheduled Work Week: 37.5
  • Assigned Work Week: 37.5
  • Leave Period: June 1, 1996 to August 31, 1996
  • LIA period: November 16, 1995 to November 13, 1996
  • Acting Pay @ $38079.00 effective March 1 to October 31, 1996 inclusive.

Action Required:

Pay Input Transaction

Salary

Basic

Reduced

Step 1.
Report the full acting pay salary.

Amend reduced salary to include the acting pay salary (original reduced salary + difference between substantive rate and acting rate ... $4,987.00.)

18C 002 01/03/96


18A 306 01/03/96

$38,079.00

$29,806 .00

Step 2. Revert the acting rate to the original reduced salary for the period of LWOP.


18A 306 01/06/96


$24,819.00

Step 3. Report the acting rate to the reduced salary on return to duty.


18A 306 01/09/96


$29,806.00

Step 4.
Revert to the substantive basic salary rate.
Revert the reduced salary to the original reduced rate.


18C 001 01/11/96

18A 306 01/11/96


$33,092.00




$24,819.00



Verification

SALARY PAID DURING LIA PAY PERIODS WITH ABOVE ACTION:

  • 16/11/95 - 29/02/96 76 days @ $24,819.00 $ 7,230.31
  • 01/03/96 - 13/05/96 66 days @ $29,806.00 $ 7,540.62
  • 01/06/96 - 31/08/96 65 days @ $24,819.00 $ 6,183.82
  • 01/09/96 - 31/10/96 44 days @ $29,806.00 $ 5,027.08
  • 01/11/96 - 13/11/96 9 days @ $24,819.00 $ 856.22
  • TOTAL $26,838.05

SALARY DUE DURING THE LIA PERIOD:

  • 16/11/95 - 29/02/96 76 days @ $33,092.00 $ 9,640.42
  • 01/03/96 - 31/05/96 66 days @ $38,079.00 $ 9,633.61
  • 01/06/96 - 31/08/96 65 days @ $ 0.00 $ 0.00
  • 01/09/96 - 13/11/96 53 days @ $38,079.00 $ 6,422.40
  • 01/11/96 - 13/11/96 9 days @ $33,092.00 $ 1,141.63
  • TOTAL $26,838.05