ARCHIVED CD 2003-015
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Note This document has been modified. The changes are identified by a vertical line "|". Revision (|)
October 23, 2003 (Revised February 16, 2009)
SUBJECT: Contribution Payments from Employees, During or After a Period of Leave Without Pay (LWOP), in Respect of the Public Service Superannuation Account (PSSA), the Public Service Pension Fund (PSPF), the Retirement Compensation Arrangements Account (RCAA), and the Supplementary Death Benefits Account (SDBA)
1.1. The purpose of this directive is to remind compensation advisors of the appropriate remittance procedures related to payments made by employees during or after a period of leave without pay (LWOP). The policy and procedures apply to the following:
- the Public Service Superannuation Account (PSSA),
- the Public Service Pension Fund (PSPF),
- the Retirement Compensation Arrangements Account (RCAA), and
- the Supplementary Death Benefit Account (SDBA).
1.2. In this text, use of the masculine is generic and applies to both men and women.
2.1. PSSA, PSPF, RCAA and SDBA
Contributions to the PSSA, the PSPF, the RCAA and the SDBA, in respect of a period LWOP, may be remitted in one of the following ways:
- in a lump sum amount within 30 days of the employee's return to duty;
- | by deductions from salary in equal instalments over a period equal to twice the period of LWOP for the PSSA, the PSPF, the RCAA, and the SDBA;
- in a combination of a lump sum amount (payable within 30 days of the employee's return to duty) and instalments; or
- in payments during the period of LWOP.
Upon return to duty, if the employee chooses to pay in a lump sum, the payment must be received within 30 days of return to duty; otherwise recovery must commence from his salary. At any time following the commencement of the recovery, the contributor can still make a payment for all or part of the balance of deficiencies owing.
Payments of contributions for the PSSA, the PSPF, the RCAA and the SDBA can be made at any time during the period of LWOP.
In cases where the contributor was on loan from the Government of Canada, the LWOP contributions must be paid to the Public Service Pension Centre (PSPC) formerly known as Superannuation, Pension Transition and Client Services Sector by one of the following options:
- annually in advance,
- quarterly in advance, or
- in a lump sum payment paid in advance, calculated for the expected period of absence. When the regulations require that contributions be paid in advance, and they are not paid upon return to duty (or not fully paid on return to duty) recovery of any deficiencies upon return to duty are to be made over a period equal to the period of leave.
2.2. Elective Service
It is important to note that payments must be made by those employees who have ongoing elections. Failure to send payments for elections will result in default payments. Payments in default are subject to interest charges unless the default payment is paid within 30 days from the date on which the payment was due.
| 3.1 PSSA, PSPF, RCAA, Elective Service and SDBA
3.1.1. When making payments to cover deficiencies to the PSSA, the PSPF, the RCAA, and the SDBA cheques, postal or bank money orders are payable to the Receiver General for Canada and should be forwarded to the compensation advisor.
Please note that payments of premiums for insurance plans such as the Public Service Health Care Plan (PSHCP), the Dental Care Plan (DCP), the Disability Insurance (DI) Plan or the Long-term Disability (LTD) Insurance Plan must be done on separate cheques and are not to be forwarded to the PSPC.
| When making payments to cover elective service, cheques, postal or bank money orders are payable to the Receiver General for Canada and should be forwarded to the PSPC. If the compensation advisors receive elective service payments, they will advise the plan member to send future payments directly to the PSPC. For this payment however, compensation advisors should follow the established procedure of forwarding payments.
Upon receipt of a payment, compensation advisors must complete the "Superannuation Remittance for Employees on Leave Without Pay" (PWGSC-TPSGC 4005) form. When completing this form, compensation advisors must indicate the LWOP period and the period covered by the amount received. Compensation advisors must also provide the breakdown of the payment in order to identify the amounts that are to be applied to the PSSA, the PSPF, the RCAA, the SDBA and the purchase of elective service. Copy 1 of the PWGSC-TPSGC 4005 form should be sent to the PSPC with the cheque, postal or bank money order using the following address:
Public Service Pension Centre (PSPC)
Public Works and Government Services Canada
P.O. Box 5010
Shediac NB E4P 9B4
| Note: Compensation advisors can forward all post-dated cheques upon initial receipt to the PSPC with the details indicated on the PWGSC-TPSGC 4005 form.
| When a plan member returns earlier than anticipated from LWOP and post-dated cheques for the payment of elective service were forwarded to the PSPC, the compensation advisors should notify the PSPC as soon as possible of the actual date of return and provide instructions for the remaining post-dated cheques.
Before sending the cheque, postal or bank money order and the completed form to the PSPC, using the Regional Pay System (RPS), the compensation advisors must create a "Cash Receipt Transaction" (CRT) as per Section 4-4-20 of the Personnel-Pay Input Manual (PPIM) using the appropriate PSSA, PSPF, RCAA, elective service or SDBA deduction codes applicable to the payment. This will serve as notification to Public Works and Government Services Canada (PWGSC) regional pay offices that the payment was made.
| Note: If all post-dated cheques are being forwarded at the same time, the compensation advisors must create a separate "Cash Receipt Transaction" for each cheque.
| 3.1.2. During a period of LWOP, when employees make payments for elective service, the payments, along with a "Service Buyback Payment Transmittal for Plan Member on Leave Without Pay" (PWGSC-TPSGC 570 ) should be forwarded from the employee directly to the PSPC at the address indicated on the form.
3.2. Lump Sum Payments by Way of Direct Transfer of Funds from a Registered Retirement Savings Plan (RRSP)
| 3.2.1. An employee may transfer funds from his RRSP to pay for his PSSA and PSPF deficiencies by having his financial institution complete the Canada Revenue Agency (CRA) T2033 form, Direct Transfer Under Paragraph 146(16)(a) or 146.3(2)(e). The T2033 form is available from the CRA Web site at the following address:
3.2.2. The employee must inform his compensation advisor if he chooses this option. Compensation advisors must remind the employee to ensure that the financial institution completes Part C of Area 1 of the T2033 form by checking off the last box. The CCRA registration number to use is 0288795, and the name of the plan is Public Service Superannuation. The T2033 form must indicate that the transfer of funds is for payment of LWOP deficiencies. Once the T2033 form has been completed, the financial institution must send the funds and the form to the Accounting Section of the PSPC at the address provided earlier in this directive. Some financial institutions may have their own forms. These forms must be compliant with paragraph 146(16)(a) or 146.3(2)(e) of the Income Tax Act (ITA).
Compensation advisors are to advise employees who chose this option to provide them with a copy of the form used for the direct transfer which will indicate the amount of funds being transferred to the PSPC. The copy will serve as confirmation of the direct transfer of funds from an RRSP as well as the amount being transferred. Compensation advisors are to use this information to complete and forward the PWGSC-TPSGC 4005 form to the PSPC. A CRT transaction is also required.
| For elective service payments, compensation advisors should refer employees to the Pension and Benefits Web Portal and/or the PSPC by providing the contact information.
3.2.3. It is important as well that compensation advisors inform employees that for payments of SDBA and RCAA deficiencies, only cheques, postal or bank money orders will be accepted. Payments of deficiencies for the RCAA and SDBA do not qualify under the ITA for transfer from an RRSP. This means that employees cannot transfer funds from their RRSP in order to pay for contributions for the RCAA or premiums for the SDBA.
4. Regional Pay Office (RPO)
4.1. Using the RPS, the RPO will update the Free Form Text (FFT) screen with the data from the CRT transaction created by the compensation advisor and will also use this data when they calculate the contributor's LWOP deficiencies and/or election arrears at the end of the period of LWOP. If there are any remaining deficiencies, the RPO will proceed with the necessary recovery. On the other hand, if no CRT transactions have been created, the RPO will calculate and recover the deficiencies for the full period of LWOP.
5. Public Service Pension Centre
5.1. Upon receipt of payments to the PSSA, the PSPF, the RCAA, the SDBA and ongoing election remittances for periods of LWOP, the PSPC will update the contributions on the Contributor System. If payments are received directly from employees without the PWGSC-TPSGC 4005 form, the PSPC will notify client departments and request that the form be completed. The PSPC will also issue receipts to those employees who have made direct payments.
6.1. Any inquiries on the information contained in this document should be addressed to your PWGSC Compensation Services Office.
Original Signed by
Accounting, Banking and Compensation
Reference: CJA 9203-8(6)(a), 9203-8(6)(b),
- Date modified: