What You Need to Know About Reporting Salary
Effective: November 16, 2004
Having accurate salary information on file is essential to administering a member's pension. It's used in almost every process we do, from calculating contributions and pensions to determining the cost of buybacks and transfers.
For this reason, it's important to understand which types of earnings form part of a member's 'salary' for pension purposes - and which ones do not. Salary reporting errors result in calculation errors, which can significantly affect a member's contributions and pension.
The definition of salary
In the 'Definitions' section of the Public Service Pension Plan,
"salary" means the amount of money payable to a member and computed by reference to the hours, days, weeks or other specific periods of time for which the member is employed, but does not include overtime pay or any payment to the member in lieu of a benefit provided by the employer or any payment determined by the Board not to be part of a member's salary.
'Salary' includes payments that:
- are a regular and usual part of ongoing remuneration (i.e., it's expected to occur each year);
- relate to a specific period of employment; and
- are not in respect of overtime or in lieu of an employer-provided benefit.
Salary does not include overtime pay and/or any payment that a member receives instead of an employer-provided benefit (as noted in the Definition), such as amounts payable in lieu of vacation accrual, or per diem compensation that is specifically negotiated in lieu of employment benefits. Also, one-time payments such as year-end lump-sum payments are not included in salary for pension purposes.
Not sure? Please contact us
Our members rely on us - and we rely on you for accurate information. If you're not sure whether a payment is considered 'salary', please