If a member becomes entitled to either short-term and or long- term disability benefits during a leave of absence, here's what you need to know about the pension impact.
Note: if your organization doesn't offer short-term or long-term disability benefits to employees, please report this period of service as an unpaid leave of absence.
This section covers the following topics:
Short-term disability benefits (STD)
Long Term Disability Benefits (LTD or LTIP)
- Pension contributions for members on LTD/LTIP
- Employer responsibilities - LTD
Short-term disability - (STD)
Usually, members are eligible to receive benefits under short-term disability programs for up to 6 months. The method of payment for these benefits can vary.
The employer's responsibilities vary depending on whether the member is paid directly by the employer during this time or by a third party.
If the member is paid directly by the employer during short-term disability
There's no impact to your pension reporting responsibilities; continue to deduct the full contributions as normal. This period of service doesn't need to be reported to OPB as a leave of absence.
In other words, you must continue to deduct contributions based on the member's full salary, even if the member's pay is reduced during this period.
If the member is paid by a third party during short-term disability
Please report this period as an unpaid leave of absence, even if the member is receiving a portion of their income from an insurance company. Since the member isn't being paid by the employer during this period, it's considered an unpaid leave of absence for pension purposes. We will provide the member with a costing should they wish to continue contributing during their leave.
Long-Term Disability (LTD/LTIP)
If a member qualifies for Long-term Disability (LTD) or Long-term Income Protection (LTIP), they continue to accrue full credit in the Plan.
When a member is approved for LTIP, the employer must pay both the member and employer contributions until the member no longer qualifies for LTIP, turns age 65, or terminates membership in the Plan (whichever is earlier).
Note: Please contact OPB regarding the LTIP rules for Justices of the Peace.
Once you notify OPB that the member qualifies for LTIP, we'll invoice you for the required LTD/LTIP contributions on a monthly basis. See when to pay LTIP contributions for more information regarding your responsibilities.
Contribution adjustments while the member is on LTIP
Contributions during the LTIP period are determined using the member's salary in effect on their date of disability. If the member remains on LTIP into the following year, we will increase the member's salary by OPB's annual cost-of-living adjustment. This is required under our Plan text.
Each February, your LTIP invoice will reflect the adjusted salary rates for any members continuing on LTIP from the previous year. However, we only use the adjusted salary to calculate the member's contributions as long as they qualify for LTIP. When the member returns to work and LTIP ends, please calculate contributions according to the member's actual rate of pay.
Employers have the following responsibilities.
You must notify OPB when a member has been approved for LTIP. How you report this information is dependent on whether you remit an electronic interface or a manual spreadsheet.
If you report pension information electronically (by pay pension file)
Enter the Disability Start Date and the LTIP Start Date (the insurance company provides these dates) into your payroll system. This information is then sent to OPB on your pension pay file. Once we receive the LTIP information, we'll calculate the required contributions, and send out a monthly LTIP invoice.
Please remove the member from the full-time pension file to ensure that regular contributions aren't deducted. You only need to report and remit contributions up until the last day that the member was on payroll.
If you report pension information manually (using an excel worksheet)
Enter the Disability Start Date and the LTIP Start Date (the insurance company provides these dates) in the Comments section for the member.
If the member was still on payroll prior to their approval, please remove them to ensure that regular contributions stop. You only need to report and remit contributions up until the last day that the member was on payroll.
Members may elect to continue contributing during their leave of absence if they aren't certain that their disability claim will be approved, or they're appealing the insurance company's initial decision to deny their claim.
In both cases, if the member is subsequently approved for LTIP, we'll review their records to determine whether the member paid any contributions after the reported LTIP Start Date. If we determine the member did make such payments, they'll get a refund and the employer will get a credit which they can apply to the following month's remittance to OPB.
Once we receive the member's LTIP information, we'll invoice you regarding the outstanding LTIP contributions within the first two weeks of the following month.
Payroll deductions for buybacks cannot continue when the member is on LTIP. Please stop payroll deductions on the pay period where the member's LTIP starts.
We'll contact the member to provide them with payment options for their buyback. If the member wants to continue their buyback payments, we'll invoice you the month after the member makes any payment if the employer is required to match the buyback cost.
Employers must notify OPB electronically or manually when a member's LTIP ends.
If you report pension information electronically (by pension pay file):
- Enter the LTIP End Date in your payroll system. The date will be sent to OPB on your pension pay file.
- Please remember to start remitting regular contributions when the member returns to work.
If you report pension information manually (by excel spreadsheet):
- Put the member back on your spreadsheet
- Indicate the LTIP End Date in your spreadsheet's Comments section.
- When the member returns to work, restart regular contributions.
If the member doesn't return to work when their LTIP ends
If the member remains on an authorized unpaid leave of absence after their eligibility for LTIP ends, report this service as a leave.
Employers must continue paying both member and employer contributions for as long as the member qualifies for LTIP. So, even if the member works part-time as part of a return to work arrangement, they continue earning full credit and the employer remains responsible for member and employer contributions.
Members only start paying contributions if they return to work when their LTIP ends.
We invoice for LTIP on a monthly basis. If you have a member on LTIP, you'll receive your monthly invoice around the first or second week of each month. Your invoice will reflect contributions required for the previous month.
Please make payment (by cheque or electronic funds transfer) within 2 weeks of receiving an invoice.
Important: If you remit all contributions (regular, buybacks, LTIP) in one lump sum payment, please email a payment breakdown of the contribution types along with the electronic remittance/payment advice to Camelia Gugiuman, Revenues Administrator, at firstname.lastname@example.org.