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ARCHIVED - Impact of New PSAC Collective Agreements on Disability Insurance (DI) and Long-term Disability (LTD) Benefits - Information Notices
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DATE: November 20, 2001
TO: Compensation Managers
Heads of Personnel
Heads of Personnel of Participating Separate Employers
Heads of Bargaining Agents
SUBJECT: Impact of New PSAC Collective Agreements on Disability Insurance (DI) and Long-term Disability (LTD) Benefits
Introduction
The purpose of this notice is to remind compensation advisors of the impact a retroactive salary increase has on DI/LTD benefits in view of the recent signature of the four collective agreements between the Treasury Board and the Public Service Alliance of Canada (PSAC).
Background
The collective agreements were signed on November 19, 2001, between Treasury Board and the PSAC. These agreements impact Table 1 (Program and Administrative Services), Table 2 (Operational Services), Table 3 (Technical Services) and Table 5 (Education and Library Science).
Retroactive Salary Increase
Compensation Advisors are reminded that DI/LTD benefits may have to be adjusted to reflect retroactive salary increases, provided that the effective date of the salary increase is prior to the date DI/LTD benefits commenced.
Where a retroactive salary revision could affect the level of the DI/LTD benefit, the Insurance Unit, Superannuation Directorate, Public Works and Government Services Canada (PWGSC) must be provided immediately with the following details:
- The old salary
- The new salary
- The authority for the change in salary e.g. collective agreement
- The date of authorization of the change in salary, and
- The effective date of the change in salary
Compensation Advisors should consult the Information Notice dated March 15, 2001, for additional information on the impact of a retroactive salary increase on disability benefits.
Rehabilitation Program
Compensation Advisors are also reminded to report to the Insurer all revised rehabilitation program earnings resulting from the retroactive salary increase. Once the Compensation Advisors have provided the revised monthly earnings for every month covered by the retroactive salary increase, the Insurer will calculate the revised disability benefit where applicable.
Long-term Disability Insurance Benefits
The Long-term Disability (LTD) portion of the PSMIP has a Rehabilitation Program similar to that under the DI plan. However, the maximum benefit that a LTD Rehabilitation Program participant can receive is calculated in a slightly different way. The maximum benefit under the LTD plan is 100% of the participant's salary on the last day of the elimination period, but updated to reflect the current rate for that position. As a result, changes in a participant's annual rate of pay that occur during a period of rehabilitation must also be reported.
