Disability Insurance Plan benefits and new collective agreements

Purpose

The purpose of this notice is to provide information regarding disability benefit adjustments that will be made as a result of new collective agreements for plan members who are, or were, in receipt of disability benefits from Sun Life Financial (Sun Life) under the Disability Insurance (DI) Plan.

Who is affected

The following DI plan members are eligible for benefit adjustments 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 the 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 adjustments are only applicable on 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, rather than use actual revised earnings, the increase in rehabilitation earnings will be estimated for periods of rehabilitation. This may produce a slightly higher benefit of between 1 and 3 percent for affected plan members.

Implementation

The adjustment of disability benefits will be processed in the order the agreements are signed. Sun Life has hired additional staff to process all the applicable benefit adjustments, covering an estimated 17,000 claims, as quickly as possible. This work is expected to be completed by late 2019. Although a much larger number of claims will be adjusted in a shorter period of time than in the past, Sun Life is not required to produce disability benefit adjustments within the same timeframe imposed on the employer to implement salary revisions.

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. Please consult the PSMIP benefits and recent salary agreements Information Notice.

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

Marie-Chantal Girard
Assistant Deputy Minister
Pensions and Benefits Sector