Growing your family. Pregnancy/Adoption Parental Leave

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1 Growing your family Pregnancy/Adoption Parental Leave

2 regnancy and parental leaves Expecting a new addition to the family? Congratulations! Bringing a new baby home is a joyous occasion. As a member of the CAAT Plan, you can take the time to be with your loved ones without having to worry about your job, your income, or even your future pension. Is this pamphlet for you? This pamphlet describes Pregnancy, Adoption and Parental Leaves, the governing legislation, and how you can accrue pensionable service during your absence. A detailed legal description of the provisions of the Plan can be found in the Plan Text, which can be accessed at your employer s Human Resources department or downloaded from our website. Should the information in this booklet, our website or any other source differ from the Plan Text, the Plan Text will govern.

3 Pregnancy and parental leaves Under the Employment Standards Act The provincial Employment Standards Act (ESA) includes provisions protecting the jobs of employees who take leaves of absence for certain family reasons. During the leave period, employees continue to earn seniority. After the leave period is complete, employees return to the same job (or a comparable job if it no longer exists). Employers are not required to pay employees during periods of pregnancy/adoption or parental leave. However the ESA states that employers must continue to pay their share of premiums to benefit plans, such as medical insurance. Employers must also continue to contribute their share to pension plans, unless the employee states in writing that she or he does not intend to make contributions during the period of the leave. CAAT Pension Plan P3

4 Pregnancy and parental leaves Under the Employment Insurance Act The Employment Insurance (EI) Act is the federal legislation that provides maternity and parental benefits to employees who take unpaid leaves under the ESA. You have the opportunity to receive a stream of income through these payments while you stay at home to care for your families. Currently, employees on pregnancy and parental leaves can receive an EI benefit of 55% of average insured earnings, up to a maximum weekly amount. To start receiving EI benefits, apply to Service Canada. You will complete a two week waiting period before you begin to receive payments. Some employers may "top up" federal EI payments as part of a collective agreement or Human Resource policy. You may be eligible to receive Supplementary Unemployment Benefit (SUB) Plan payments from your CAAT Plan employer during your pregnancy/adoption or parental leave. For information on SUB Plan payments, contact your Human Resources department. P4 Pregnancy/Adoption Parental Leave

5 Pensionable service in the CAAT Plan Pensionable service is one of the factors used to calculate your pension. Generally, the more pensionable service you have, the greater your retirement pension will be. If you have a gap in your pensionable service, such as a period of pregnancy or parental leave, it may lower your pension when the time comes to retire. By contributing to your pension during your leave, or upon your return to work, you can accrue pensionable service for the period of your absence. The great news is if you act quickly the cost of buying back a pregnancy/adoption or parental leave is equal to the contributions you would normally have made had you not been on leave. Your contributions are based on deemed earnings the salary you were earning in the period immediately before leaving work. Adjustments are made to take into account any salary increases you would have been entitled to receive. CAAT Pension Plan P5

6 What you need to know SUB Plan payment deductions You may be entitled to receive SUB Plan payments from your employer. If so, you can choose to have your contributions deducted directly from these payments. This is a convenient way to contribute to the Plan during your leave. You will benefit from your employer s matching contributions and continue to accumulate pensionable service. Lump sum payments Some members are not entitled to SUB Plan payments. Others may not wish to have contributions deducted from their payments. If you fit into either of these scenarios, you can still purchase the service when you return to work. If you make the purchase within six months of your return to work, the cost is your contributions, and your employer matches. To process a purchase, you can pay either by cheque, or through an RRSP transfer. In this case, you will complete a Canada Revenue Agency form T2033, available from your financial institution. P6 Pregnancy/Adoption Parental Leave

7 Don t delay If you decide not to make the lump sum payment within six months, you can still make the purchase. However, the cost will be recalculated with no contributions from your employer. After six months, you will need to pay the higher of two times your contributions (based on the contribution rates in effect at the time of the purchase request) or the actuarial value of the service. You are responsible for the entire amount of the purchase request. Next steps Visit your employer s Human Resources department. They will complete a pregnancy/adoption or parental leave form that you will also sign. Purchasing this leave is a great way to continue growing your pension while you take some time for your family. If choose not to purchase your leave, complete the waiver section of the form and return it to your employer. CAAT Pension Plan P7

8 P8 Pregnancy/Adoption Parental Leave

9 Meet Jessica Jessica is 29 years old and expecting her first child. She has been working in the college system for four years, and has decided to share parental leave with her husband. Jessica is entitled to SUB Plan payments, and is considering all her options. With a baby on the way, Jessica and her husband are concerned about costs as their family grows. Jessica wants to budget appropriately for her new child, while continuing to save for retirement. She could wait to see how her budget plays out before making a lump sum payment at any time to purchase her service. But she wants to ensure she doesn t miss the opportunity to have her contributions matched by her employer. If she chooses to have her contributions deducted directly from her SUB Plan payments, Jessica will qualify for matching contributions from her employer as she accrues service in the Plan. With SUB Plan payment deductions, Jessica will be planning a secure future for herself and her whole family. CAAT Pension Plan P9

10 Definitions Pregnancy Leave Pregnancy leave is the opportunity for pregnant employees to take up to 17 consecutive weeks off work to remain with their newborn. To be eligible for a pregnancy leave, an employee must have been hired at least 13 weeks before the baby's due date. Parental/Adoption Leave Parental leave provides up to 37 consecutive weeks of leave to both mothers and fathers of newborn or newly adopted children. To be eligible, an employee must have been hired at least 13 weeks before the start of the leave. Please note that birth mothers who take pregnancy leave are permitted to take 35 weeks of parental leave, giving a combined total of 52 consecutive weeks of absence. P10 Pregnancy/Adoption Parental Leave

11 Concerns? Contact us If you have questions or concerns about how a family leave may affect your future pension, don't hesitate to contact your College's Human Resources department or the CAAT Pension Plan. CAAT Pension Plan contact@caatpension.on.ca Phone: Tollfree: Fax:

12 250 Yonge Street, Suite 2900 P.O. Box 40 Toronto ON M5B 2L7 Tel Toll Free