Update: Disability Insurance Plan benefits and new collective agreements

Purpose

The purpose of this notice is to provide information regarding disability benefit adjustments that were made as a result of collective agreements negotiated under the 2014 round of bargaining (wave one) and adjustments being made for the latest wave of collective agreements negotiated to date under the 2018 round of bargaining (wave two), for eligible plan members who are, or were, in receipt of disability benefits from Sun Life Financial (Sun Life) under the Disability Insurance (DI) Plan.

Background

In 2016, Sun Life, administrator for the DI plan, started a wave one project to retroactively adjust disability benefits for eligible members on disability based on the 2014 collective agreements. All DI claims under wave one were completed in early 2020.

Sun Life has now started a wave two project to implement the adjustments for eligible members covered by the new 2018 collective agreements. As new agreements are reached under the 2018 round, these adjustments for eligible members will be added to wave two.

Who is affected

The following DI Plan members are eligible for benefit adjustments under wave two to reflect the retroactive increase in annual salary in their new collective agreement:

1. Plan members who were approved for disability benefits and who received their first payment on or after the effective date of their new collective agreement.
2. Plan members who participated in an approved return to work program on or after the effective date of their new collective agreement.

Disability benefit adjustments are only applicable to the benefits received from the date the previous collective agreement expired.

Calculation of Adjustments

For plan members approved for benefits and who received their first payment on or after the effective date of their revised rate of pay, Sun Life will compare the plan member’s job classification information with the salary information found in their new collective agreement. Sun Life will apply the new salary retroactively to determine the plan member’s revised disability benefit.

Plan members who participated in an approved return to work program on or after the effective date of their new collective agreement will have their rehabilitation earnings recalculated. 

In order to accelerate the benefit adjustment process and reduce the effect of any errors in the pay system, Sun Life will use the actual rehab earnings provided on file to apply the applicable increase in rehabilitation earnings. This may produce a slightly higher benefit of between 1 and 3 percent for affected plan members.

Implementation

As was the case for wave one, the adjustment of disability benefits under wave two will be processed in the order that the collective agreements were signed. Sun Life has hired additional staff to process all the applicable benefit adjustments as quickly as possible; however, they are not required to adjust the disability benefit within the same timeframe imposed on the employer for salary revisions. This work has started and is currently expected to be completed by late spring 2022; however, this will depend on when all collective agreements under the 2018 round have been signed.

Employees whose Long-Term Disability coverage is provided under the Public Service Management Insurance Plan (PSMIP) will receive similar benefit adjustments through Industrial Alliance, the insurer for the PSMIP, once wave one adjustments for this plan are completed in 2020. Please consult the PSMIP benefits and recent salary agreements Information Notice.

Should you have any questions regarding this notice, please contact the Treasury Board of Canada Secretariat, Pensions and Benefits Sector.

Marie-Chantal Girard
Assistant Deputy Minister
Pensions and Benefits Sector