Signing of collective agreements: Effect on group insurance benefit plans

Purpose

The purpose of this Notice is to provide information regarding the premium and benefit adjustments that will be made to Disability Insurance, Public Service Management Insurance Life and Long-Term Disability for employees as a result of the new collective agreements.

Background

Since December 2016, Treasury Board Secretariat has reached tentative settlements with a number of bargaining units. Collective agreements covering over 151,000 employees have already been signed or will be shortly. Details on the effect of retroactive salary adjustments on group insurance benefit plans are provided below.

Premium adjustments for employees

Premium rates for the Disability Insurance, Public Service Management Insurance Life and Long-Term Disability plans are based on employees’ salary. Therefore, premiums will be adjusted as a result of the salary increases negotiated through collective bargaining. Revised premiums will be effective as of the first pay period following the date the collective agreement was signed and will use the revised rates of pay listed in the new collective agreement. Each collective agreement has a required amount of days to implement salary adjustments. Consult the Collective agreements page for specific bargaining unit details.

Note: Premium adjustments will not be collected on retroactive salary adjustments for the period between the date the previous collective agreement expired and the first pay period following the date the new agreement was signed.

Pay system

Premium adjustments will be processed by the Public Service Pay Centre or departmental compensation offices. Salary and earnings adjustments will not be reported to Sun Life and Industrial Alliance until salary and earnings adjustments have been updated in the pay and pension systems.

Employees on disability

Employees who were approved for disability benefits and who received their first disability payment:

• before the expiry of their previous collective agreement will not be eligible for a retroactive disability benefit adjustment
• on or after the expiry of their previous collective agreement, whether they are still in receipt of disability benefits or not, are eligible for a retroactive disability benefit adjustment

Both Sun Life and Industrial Alliance will perform the necessary disability benefit adjustment calculations and will contact all affected employees once the employer provides them with the necessary salary adjustment information.

Note: Sun Life and Industrial Alliance are not required to follow the implementation timetable contained within the collective agreements.

Rehabilitation earnings

For employees who receive rehabilitation earnings, retroactive salary adjustments will impact their rehabilitation earnings. This information notice will be updated as more information becomes available.

Additional information

To learn more about the status of collective agreements, please consult the Collective Bargaining Update page.