PAYROLL DEDUCTION & BENEFIT INFORMATION

Transcription

1 PAYROLL DEDUCTION & BENEFIT INFORMATION Mandatory deductions UNION EMPLOYEES Federal Tax Income tax is calculated on your gross earnings minus union dues and superannuation (pension deduction) according to the information on your TD 1 form. Deductions are taken from each pay cheque. Employment Insurance (EI) Service Canada (Federal Govt) administers this insurance plan and the deductions are calculated on your gross earnings at 1.88% to a maximum of $ for the year Premiums are deducted each pay cheque. Canada Pension Plan (CPP) The Federal Government administers this pension plan and deductions are calculated on the gross earnings at 4.95% to a maximum of $2, for the year Premiums are deducted each pay cheque. Public Service Pension Fund (PSPF) This pension plan is administered by Public Service Pension Centre (PSPC) of part of Public Works Canada (Federal Govt). The following table sets out the contribution rates that will apply presently and in the future. Contribution rates for new employees who become plan members on or after January 1, 2016 Description 2016 On earnings up to the maximum YMPE $54, % On any earnings over the maximum YMPE $54, % Employer pays 1.11 times the employee's cost. Pension is deducted each pay cheque.

2 Eligibility to Participate in the Public Service Pension Plan As a full-time or part-time public service employee (minimum 12 hours per week), you are covered by the pension benefit provision under the public service pension plan: from your first day at work, if you are appointed on an indeterminate basis; or from your first day at work, if you are hired for a period of more than six months; or after six months of continuous employment, if you were originally hired for a period of six months or less. The date when you became a member of the public service pension plan determines when you will be eligible to receive an unreduced pension benefit: If you were a member on or before December 31, 2012, you are eligible to draw an unreduced pension benefit at age 60 with at least two years of pensionable service (or age 55 with 30 years of service); or, If you become a member on or after January 1, 2013, you are eligible to draw an unreduced pension benefit at age 65 with at least two years of pensionable service (or age 60 with 30 years of service). Increasing Your Pension You can add eligible service in order to increase your pension. To do so, you can opt to count an eligible period of leave without pay as pensionable service, buy back service or transfer service from another employer's pension plan through a Pension Transfer Agreement. Service Buyback Before you started contributing to the public service pension plan, you may have accumulated service in the public service or with another employer. You may be able to buy back that service to increase your pension. Once it is bought back, the service is included in your pensionable service used to calculate your pension. You may buy back all or part of a period of prior service. If it is for a part only, it usually must be for the part that occurred most recently. You may extend your election to cover additional periods without penalty by completing another election within the normal one-year time limit. Also, if part of your service transferred from a former employer under a Pension Transfer Agreement is not recognized by the public service pension plan, you can buy back that service.

3 If you want to estimate the cost of buying back previous service and see the resulting increase in your pension, a service buyback estimator tool is available on the Compensation Web Applications (CWA). For further information about service buyback, you can also refer to the Service Buyback Package. Advantages By increasing your pensionable service, You increase your pension; You increase protection for your beneficiaries; You can reach 35 years of pensionable service earlier; and You can retire earlier. However, if you leave the public service before completing two years of continuous service, you will only be entitled to a return of contributions with interest. Consequently, if you intend to leave within that period, you should consider whether it is in your interest to surrender the entitlement under the previous plan. This provision does not apply if you leave the public service involuntarily. You may also want to speak with your financial advisor about the pros and cons of buying back service. Types of prior service The following are types of prior service you may wish to buy back: Prior service within the public service: You can buy back virtually any full-time service in the public service, including periods of eligible unpaid leave not already recognized as pensionable service. You can also buy back prior part-time service after December 31, 1980, as long as you were hired to work an average of at least 12 hours a week. Prior service outside the public service: You can buy back service with any employer with an approved pension plan registered under the Income Tax Act. The service with the former employer must have taken place within six months before your public service employment. If the prior employment ended more than six months but less than two years before you entered the public service, special consideration is required to determine whether the service is eligible for buyback or not. Service with the Canadian Forces-Regular Force or the Royal Canadian Mounted Police: If you are entitled to a pension under the Canadian Forces Superannuation Act, the Defence Services Pension Continuation Act, the Royal Canadian Mounted Police Pension Continuation Act or the Royal Canadian

4 Mounted Police Superannuation Act, you may elect to combine your previous service with your service under the public service pension plan. All your service will then be subject to the terms of the public service pension plan. You must make this election before leaving the public service. You must also pass a medical examination. Service as a Member of Parliament: If you are entitled to a pension under the Members of Parliament Retiring Allowances Act, you may elect to transfer your service to the public service pension plan at any time before you leave the public service. You must then repay, with interest at an annual rate of 4 percent, any pension you received after your first year as a public service pension plan member. You must also pay any contributions still owing under the Members of Parliament plan and pass a medical examination. Other types of service: You may buy back other types of prior service, such as active war service and certain types of civilian war service. Keep in mind that if your prior employer paid in whole or in part for any annuity entitlement you may have under another pension plan, you must surrender that entitlement before you can buy back service. You should ensure that the service in question can be recognized under the public service pension plan before you surrender the entitlement. How to Buy Back Service If you buy back service within one year of becoming a public service pension plan member, it is called a normal election. To do so, refer to the Service Buyback Package, complete a special election form and send it to the address shown on the form before the prescribed period expires. The election will be sent to the Pension Centre for verification. Action will be taken to start payroll deductions, where necessary. If you wait after a year of becoming a public service pension plan member to elect to buy back service, it is called a late election. You must complete the election form and forward it within one month of the date on which you signed it. You may buy back service at any time while you are employed in the public service and contributing to the public service pension plan. Cost and other requirements may vary, depending on when you make the election. For either a normal or a late election, any election not forwarded within the prescribed time will be invalid. Service Buyback Contributions When you elect to buy back service, you must make contributions for that purpose, in addition to your regular contributions for current service. You are considered to have received a certain salary during each year of service that you want to buy back, and a contribution rate is prescribed for each of those years.

5 Normal and Late Election Contributions If you make a normal election, that is, if you make an election within one year of becoming a public service pension plan member, your buyback contributions are based on your salary rate when you last became a member of the public service pension plan. The cost of buying back service increases after the first year of membership, as your salary rises and interest continues to accrue. Therefore, it is more advantageous for you to make your election in the first year. If you make a late election, that is, after one year of becoming a public service pension plan member, your buyback contributions are based on the salary payable to you at the date of the election. In many cases, a late election could mean a much higher cost. Contribution Rates for Buying Back Service Your contribution rate may be single or double, depending on whether the type of service requires you to pay employee or both employee and employer-matching contributions. The cost of buying back service includes 4 percent interest calculated from the middle of each fiscal year of service that is bought back to the first day of the month in which you make the election. Since April 1, 1970, the contributions made to buy back service cover the cost of protection from inflation. The cost of buying back service depends on the types of prior service you elect to buy back, in addition to the timing of your election (normal or late election): Obtaining a Cost Estimate Before electing to buy back service, you should obtain an estimate of what your prior service will cost from the Pension Centre shortly after you become a member of the public service pension plan. They can provide you with information and an estimate of the cost before the deadline for your election. You can also use the service buyback estimator within the Compensation Web Applications to estimate the cost of buying back service and see the impact it will have on your future pension. If the deadline is approaching and your estimate has been delayed by the Pension Centre, you will have to consider electing without an estimate. The public service pension plan doesn't require an estimate, so failure to receive one won't affect your deadline for making a normal election.

6 Payment Options You may pay the cost of buying back service in a lump sum or in installments. Make sure you compare both options before deciding. The installment option may seem more costly since it entails interest and insurance costs. However, it allows you to spread your payments over a certain period of time. As a general rule, additional interest is charged on any overdue installments. So if you are not paying through payroll deductions, be sure to send your payments in on time. If you change departments, make sure the installments continue to be deducted from your salary. If you retire with an immediate annuity or an annual allowance before paying all your installments for prior service, your pension will be calculated to include all your service buyback, but the unpaid installments will be deducted monthly from your pension benefit. If, upon leaving the public service, you choose to receive a deferred annuity, you must remit your installments regularly between the time you leave and the time your pension starts. If you opt for a transfer value, you must pay the remaining cost of any service buyback you wish to have included in the pension benefit before the value can be transferred. In the event of your death, neither your estate nor your survivor would have to make any more payments as the cost of the service buyback would be considered to be paid in full. Medical Examination With a few exceptions, if you elect to purchase prior service, you will have to undergo a medical examination. If you make a late election, a medical examination is required. If you don't pass the examination, the election is void. For a normal election, you may not need a medical examination. In other circumstances, the election can be maintained even if you fail the examination. If, as a former member of the Canadian Forces-Regular Force or the Royal Canadian Mounted Police, or as a former member of Parliament, you elect to surrender an annuity entitlement under the Canadian Forces Superannuation Act, the Royal Canadian Mounted Police Superannuation Act or the Members of Parliament Retiring Allowances Act in order to count the service under the public service pension plan, you must pass a medical examination when you make that election. You must undergo the examination not more than 90 days before or 6 months after the date of the election. Revocation of an Election

7 You may revoke (in other words, cancel) an election only in unusual circumstances, so you should consider any election carefully. Even if a revocation is approved, you may be charged a fee for the election insurance, incurred while the election was in force. Normally, if a person revokes an election and later wishes to have either part or all of the service that the revoked election covered recognized by the plan, the second election is treated as a late election. Pension Transfer Agreements Through Pension Transfer Agreements, you can add eligible prior service in order to increase your pension. Transfer of Your Accumulated Pension to the Public Service Pension Plan Under a Pension Transfer Agreement concluded between the Government of Canada and an eligible employer, you can have the actuarial value of pension benefits accumulated under that employer's pension plan transferred to the public service pension plan, regardless of the period in-between your membership in the public service pension plan and the other plan. The method and assumptions used to calculate this transfer value (in current dollars) may vary according to the terms of each Pension Transfer Agreement. Requests for pension transfers must be made within the period mentioned in the agreement (usually one year). Supplementary Death Benefit (SDB) The supplementary death benefit is part of the Superannuation benefit and is mandatory. The current rate is 0.15 cents per $1, of your adjusted salary and the deduction is taken from the first pay cheque of each month. The Employer's pays 26.67% times the employee's portion and Revenue Canada considers this amount a taxable benefit. Upon your death, two times your annual salary will be paid to your beneficiary. The Pension Centre contact information is available at: Public Works and Government Services Canada Public Service Pension Centre - Mail Facility PO Box 8000 Matane, QC G4W 4T6 Toll free:

8 Outside Canada and the United States: Telephone Teletype (TTY): Fax: Nunavut Payroll Tax (NN Provincial Tax) The Territorial tax is calculated at 2 % of your gross earnings. Deductions are taken from each pay cheque Union Dues - Union Employees The union membership fee is deducted from every pay cheque at a rate of % plus monthly $1.00. It is calculated on regular salary and overtime less the voluntary leave deduction, if you have opted for the voluntary leave option. Please contact your union to receive a copy of the Collective Agreement. This document is also available on the Nunavut Government s website under Human Resources documents. Long Term Disability (LTD) Indeterminate & Term Employees The LTD benefit is also mandatory. The Insurance plan provides payment of 70% of insured monthly salary during a long-term illness based on approval by the Insuring Company. The current rate is $3.09 cents per $100 of your adjusted salary x 15% and the deduction is taken from the first pay cheque of each month. The employer pays 85% of the premium. There is a 13-week waiting period from the time you become ill or disabled before this benefit will come into effect. You should contact your benefits officer as soon as you feel you may qualify for this benefit to start the paperwork process and ensure your claim is processed as quickly as possible. During the waiting period you must utilize sick leave and you can apply for sick benefits through EI. Please review the specific LTD booklet for more information. Rent Rent deductions are based on the rental amount provided by Housing and are deducted from each pay, except when there are 3 pays in a month, which happens twice a year. No regular scheduled rent deduction will be taken on the third pay. If rent is in arrears due to information received late or changes in units, it is calculated and taken as rent adjustment. Contact for Rent: Accommodations Clerk, Nunavut Housing Corporation Ph # (867) Fax # Household Allowance The Household Allowance is a subsidy of $400 per month and available on a per household basis. It is available to all eligible indeterminate and term employees of the GN, a Public Agency

9 or the Legislative Assembly and who are not already receiving a similar allowance. The applicant must own and occupy the unit as their principal residence, or pay the full rental cost of the unit. For clarity, employees may not live in any form of subsidized housing; for example, federal staff housing or public housing, regardless of the rental rate. For further assistance with this program, please householdallowance@gov.nu.ca. Direct Deposit Due to weather or mechanical delays that affect the airlines employees are strongly encouraged to sign up for direct deposit, the option of having your pay deposited automatically into your account on pay day. If you need to change your account please contact your payroll officer prior to making any changes to ensure it will not affect your current pay being processed. Dental Insurance Plan Great West Life administers this insurance plan. Employees pay an annual user fee if they use the plan. Premiums are employer paid. There is a 6-month waiting period from date of hire before becoming eligible to use the dental plan. The annual year for this plan is considered Jan 1 st to Dec 31. Please review the booklet available from your benefits officer, for user rates and services subject to yearly maximums. Health Care Plan This is an insurance that consists of a supplementary healthcare benefit, hospital stay coverage and a healthcare travel benefit. The supplementary healthcare consists of a prescription drug plan, vision coverage and some other medical expenses not covered by the Nunavut Health Insurance and again the annual year for this plan is Jan 1 st to Dec 31. Health coverage commences the first of the following month of the date of hire. Three different levels are offered whose only difference is in the hospital stay coverage. The annual user fee is $60.00 for single and $ for family use. Level Employee Pays Employee Pays Amount of Hospital Coverage Level 1 Single: $0.00 Family: $0.00 Hospital coverage per day $60.00 Level 2 $1.10 $3.53 Hospital coverage per day $ Level 3 $5.31 $10.34 Hospital coverage per day $220.00

10 Great West Life is the insurance company for this benefit. You may contact Client Services at Emergency line while Travelling: (good in Canada & USA) Please Note: If you are new to Nunavut you should contact the Health Board to apply for a Nunavut Health Card Northern Allowance This benefit is paid on every pay cheque and the amount is based on the community in which you are employed. The employee may also opt for Lump Sum Payments, however, the lump sum amount is not payable in advance. It is paid out once per fiscal year, and the amount paid out will be the amount-accumulated year to date. Any remaining balance of the Northern Allowance is paid out to the employee at the end of the fiscal year. Please note that by being paid as a lump sum, the federal tax will be calculated at a higher rate. Voluntary Leave Option This is a deduction of 1.92% of regular earnings per pay should you choose to participate. If you opt for this deduction, you will accumulate 5 days of paid leave over the fiscal year provided you have no leave without pay. Leave without pay will lower your entitlement. If you start part way through a year your leave will be pro-rated. You can apply to take these days like you would apply for annual days. If you don't use the days the unused balance will be paid out to you at the end of the fiscal year. Optional leave days are not carried forward into the next fiscal year. Health Care Plan Please view the website of for details on the Health Care Plan. Please note some of the following information on the Health Care Plan: There is an annual deductible of $60.00 per person for each calendar year; however where expenses are incurred in a calendar year with more than one family member, the total combined deductible amount would be a maximum of $ Great West Life must receive a claim within 12 months following the calendar year in which the expense is incurred. A claim will not be accepted after the 12 month deadline. Please call the Client Services Line for information on benefit coverage for example, to find out if a certain drug is covered under the plan. There is Emergency Benefit Coverage while travelling on vacation or business. There is a toll free number, which gives 24-hour service. The number is