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The
work stoppage involving OPSEU CAAT-Academic members started on March
7 and ended on March 24, 2006 – a period of 14 work days. Members
may now have questions about any impact on their pension plan
membership and future pension.
Employees involved in a work stoppage remain plan members during the
period of the work stoppage, providing they have not terminated
employment during the strike period and return to work when it ends.
Any strike payments received during the work stoppage are not
considered pensionable earnings. No contributions to the plan can be
made on those earnings.
Because
plan members made pension contributions for at least one day during
March, they will receive credit for pensionable service for
all of March. This treatment is referred to in the plan as the “one
day rule.” However, the pensionable earnings credited to the
member during March will only reflect the actual earnings during the
month. Therefore, members who expect to be retiring within the next
five years may want to consider buying back the earnings lost during
the strike period, in order to enhance their earnings calculation
and their resulting pension benefit.
A
service purchase, or buyback, can take place at any time after the
return to work, up to the date the member terminates from the plan
or retires. The cost of this service purchase is two times regular
contributions based on the member’s earnings at the beginning of the
work stoppage. This cost will remain in effect until the date of
termination or retirement, but plan members should be aware that if
contribution rates have changed prior to the date they choose to
make the payment, the contribution rate in effect at the time of the
payment will be used for the calculation.
The
payment must be made as a lump sum. The college will not make any
contributions on the member’s behalf for the purchase of earnings
relating to the strike period. The contributions to be made
for this purchase of earnings will be calculated as follows:
Salary x 9.1% x 2 x 14
261
Salary is the regular annual rate
of earnings in effect as of March 6, 2006
9.1% is the current contribution
rate
2 reflects two times the
contributions
14 is the number of days of the
strike
261 is the number of working days
in the year.
The pensionable
earnings for the period will be calculated as follows:
Salary x 14
261
Any
retroactive pay for the period will have regular contributions made
at the time it is paid, and it will qualify for inclusion in
pensionable earnings provided the member has not retired or
terminated.
Note
that the contribution rate of 9.1% – the higher rate amount in the
CAAT plan’s contribution formula – will be accurate for the vast
majority of individuals who consider making a service purchase in
this case. Those who retire or terminate in the first half of 2006
may be found subsequently to have contributed more than is required.
In this case, the plan will issue a refund to the college in the
second half of the following year, after the annual reconciliation
process has been completed. The college will be responsible for
ensuring the individual receives the refund of both shares of the
over-contributed amount.
Paddy Musson and
Phil Cunnington were co-coordinators of the CAAT faculty provincial
strike committee
