Did you know?
Did you know that the Public Service Pension Plan is the largest pension plan in Newfoundland and Labrador with over 55,000 members?
Defined Benefit Pension Plan
The Plan is a defined benefit (DB) pension plan, provided to current and former public service employees in Newfoundland & Labrador.
Under the Plan, plan members are assured a specific pension payment or a lump-sum benefit at retirement or termination. The annual pension benefit is predetermined by a formula based on the plan member’s earnings history, years of service in the plan, and age. The lump-sum option is based on the applicable actuarial factors at the time of payment.
The primary objective of the Plan is to help plan members prepare for and enjoy retirement.
Enrolment and Plan Membership
Participating employers are responsible for enrolling permanent, full-time, and seasonal employees in the Plan as of their date of eligibility. Enrolment in the Plan is mandatory.
Plan members contribute to the Plan based on a percentage of salary earned. Their contributions are matched by their employer.
Plan member enrolment is facilitated through a secure, electronic file transfer management system.
Pension Plan Contributions
How much do plan members contribute to the Plan?
Plan members are required to make contributions toward their pension benefits. As an employer, you are required to match these contributions.
Plan member contributions are tax deductible. The Plan is integrated with the CPP in respect of both pensions and contributions. Therefore, plan member contribution rate to the Plan on pensionable salary covered by the CPP, is less than the rate on pensionable salary which exceeds the CPP ceiling.
Effective January 1, 2015, plan members make the following contributions:
- 10.75% of pensionable salary up to the year’s basic exemption (YBE) as defined under the CPP. The YBE is a portion of salary upon which no CPP contributions are required. Please note, however, that the YBE is included in salary for calculating CPP benefits.
- 8.95% of pensionable salary in excess of the YBE up to and including the year’s maximum pensionable earnings (YMPE). The YMPE is the ceiling on which CPP benefits are based. It changes annually and is set at the beginning of each year.
- 11.85% of pensionable salary in excess of the YMPE.
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Contribution formula: |
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Assume YBE is: |
$3,500 |
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Assume the YMPE is: |
$55,300 |
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Assuming pensionable salary is $60,000, pension contributions will be: |
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10.75% x 3,500 |
$376.25 |
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8.95% x 51,800 |
$4,636.10 |
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11.85% x 4,700 |
$556.95 |
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Total pension contribution |
$5,569.30 |
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Assuming pensionable salary is $40,000, pension contributions will be: |
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10.75% x 3,500 |
$376.25 |
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8.95% x 36,500 |
$3,266.75 |
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Total pension contribution |
$3,643.00 |
How much do I contribute as an employer?
Employers and employees share the overall cost of benefits earned under the Plan. Thus, the employer’s contribution is equal to the contribution of its employees.
It should be noted that there was a three-year period from April 1, 1993, to March 31, 1996, during which the contributions made by certain employers were reduced. To identify the years during which employer contributions may have been reduced, please contact your Human Resources Department or Provident10.
What constitutes pensionable salary?
Contributory or pensionable salary is any ‘normal remuneration’ paid by an employer for the normal working period of the employee. Types of salary include regular earnings, retroactive pay, and earnings while on a temporary assignment. Salary that is not pensionable includes overtime pay, bonuses, and payments made on a fee basis.
May plan members make additional voluntary contributions to the Plan?
No. There is no provision in the Plan to allow individuals to contribute additional funds to the Plan. Employees who wish to maximize their tax-sheltered retirement arrangements may do so by contributing to a Registered Retirement Savings Plan (RRSP).
Human Resources, Payroll, and Remittance Data
Employers are required to submit their payroll data, Human Resources data, and remittance data files directly to Provident10 on a bi-weekly payroll basis. These files are uploaded into our pension administration system and used in determining employee benefits and completing other necessary transactions.
