Signing of collective agreements: Potential effect on pensions

Purpose

The purpose of this Notice is to provide information regarding potential adjustments as a result of new collective agreements. Potential adjustments apply to:

  • pension and Supplementary Death Benefit contributions for employees while on leave without pay
  • Supplementary Death Benefit premiums
  • pension benefits

Background

Since , 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 are provided below.

Contributions while on leave without pay

Employees on leave without pay are required to pay pension and Supplementary Death Benefit contributions. Since contribution rates are based on an employee’s salary, these contributions will be adjusted to take into consideration the new salary as per the signed collective agreement. Contributions owed as a result of the salary increase may be deducted from the employee’s retroactive salary payments.

Supplementary Death Benefit premiums

Supplementary Death Benefit premiums will be adjusted on the first day of the month following the signing of the collective agreement for those who are eligible to receive a retroactive salary adjustment.

Pension benefits

Former employees who are eligible to receive a retroactive salary adjustment as a result of the new collective agreements may have their pension payments increased. This will only occur if the retroactive salary adjustment relates to the years of service that were used in the calculation of their average pensionable salary. In these cases, the Government of Canada Pension Centre will recalculate the former employees’ pension and inform them in writing of any changes. Contact the Pension Centre if you retired and have questions concerning your pension benefits.

Additional information

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

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