ARCHIVED CD 1998-009
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March 30, 1998
SUBJECT: Change to the Québec Pension Plan Effective January 1, 1998
1.1 The purpose of this directive is to provide you with information concerning a change to the Québec Pension Plan regulations. This change affects employees working in Québec and receiving a retirement pension from either the Québec Pension Plan (QPP) or the Canada Pension Plan (CPP), and employees who reach age 70.
2.1 Previously, employees working in Québec and in receipt of a QPP or CPP retirement pension, or who had reached age 70, even if not in receipt of a QPP or CPP pension, could no longer contribute to the QPP.
2.2 The reform of the Québec Pension Plan introduces a measure which declares that, effective January 1, 1998, these employees must contribute to the QPP.
2.3 This change will affect only employees subject to QPP contributions as there is no change to the CPP legislation.
3.1 Effective January 1, 1998, employees working in Québec who are 60 years of age or older and in receipt of a retirement pension under the QPP or CPP, or who have reached age 70, must contribute to the QPP.
3.2 Employees working in Québec who are under 18 years of age or who are in receipt of a disability pension under the QPP or CPP, continue to be exempt from QPP contributions.
4.1 Departments are required to amend field 38 "CPP/QPP Status" to recommence the QPP deduction at source for all affected employees where applicable. The effective date should be the date on which the QPP status was changed to non-contributor or January 1, 1998, whichever is later.
4.2 To assist departments in identifying employees affected by the new QPP regulations, a listing will be provided via the cheque distribution process, reflecting employees currently working in Québec who are not contributing to the QPP.
Please note that the listing will also include Temporarily Struck-off-strength (T-SOS) and Struck-off-strength (SOS) employees based on their last province of work being Québec and who are not contributing to QPP.
4.3 The listing will also include employees working in Québec who are under 18 or who are in receipt of a disability pension under the QPP or CPP. However, as these employees remain exempt from making QPP contributions, no action is to be taken for these accounts.
4.4 The listing will not include employees who worked in Québec during 1998 but who are working in a different province at the time the listing is produced. Therefore, departments will be required to identify these employees and make the required changes only if appropriate.
Pay office responsibilities
4.5 Upon notification of a change in the QPP status, the pay office will calculate the QPP adjustment by determining the employee's QPP pensionable earnings for the retroactive period.
The adjustment should be calculated only for the time in which the employee was active during the retroactive period.
4.6 The pay office will recover the QPP adjustment from all active employees for the retroactive period with the usual one current and one arrears deduction as per Services Pay Directive 1991-013(07).
The recovery will be done using deduction code 576 which will automatically update element 709 "QPP Contributions". As this deduction does not update the pensionable earnings, the pay office will be required to credit element 707 "QPP Pensionable Earnings" by the amount of pensionable earnings calculated in 4.5 above.
4.7 For T-SOS and SOS employees, the pay office will credit element 709 "QPP Contributions" and element 707 "QPP Pensionable Earnings" by the amount of QPP contributions and the amount of pensionable earnings calculated for the retroactive period.
The pay office should ensure that when completing their PAC 30s to credit element 709 for T-SOS and SOS employees, the reference field is completed stating "QPP deficiencies 1998".
The Payroll Accounting Office (PAO) will remit both the employee's and employer's share for T-SOS and SOS employees, and will charge both shares to the employer.
4.8 When a T-SOS or SOS employee returns to work, the pay office will be required to recover the QPP adjustment for the employee's share (using deduction code 576), provided that the adjustment has not been outstanding for more than 12 months (as per Services Pay Directive 1991-013(07)).
Deduction code 576 will automatically credit element 709 "QPP Contributions". The pay office will be required to debit this element by the amount recovered under the deduction code 576. This action is required as the pay office has already credited the QPP adjustment amount for these employees (refer to 4.7).
Once again, the pay office should ensure that when completing their PAC 30s to debit element 709, the reference field is completed stating "QPP deficiencies 1998".
The PAO will not remit the amount deducted in these situations to the Ministère du Revenu du Québec as these remittances have been made as described in 4.7 above. The PAO will credit the PAC 30 amounts to the employer.
5.1 Any request for information regarding the foregoing should be addressed to your Public Works and Government Services Canada (PWGSC) Compensation Services Office.
Original Signed by
Government Operational Service
Reference : CJA 9006-12
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