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May 6, 2004
Special Notice to Employers
Service and salary reporting is fundamental to providing accurate member benefits. Please remember that pension reporting cannot be altered in any way to accommodate special retirement arrangements or to influence a desired pension outcome (inflate a benefit, grant an earlier entitlement, etc.). In fact, to do so would be fraudulent.
We do not want to interfere with the remuneration arrangements you make with your employees. However, an employer cannot accommodate unique arrangements by reporting accrued benefits (e.g., paying out a service gratuity over the last five years of employment) or other compensation as pensionable salary.
Exclusions identified in Plan
We have a shared responsibility to ensure the information used to provide benefits from our Plan is reliable and all ineligible earnings are excluded from pension reporting. Collective agreements, special service contracts, and casual employees are all treated the same under the Plan.
Section 12 (1), Schedule 1 of the Teachers’ Pension Act clearly defines pensionable salary and identifies specific exclusions:
A member’s pensionable salary for a school year is the remuneration paid to the member respecting employment in education and excludes,
 | (a) | | remuneration for services other than for employment in education; |
| (b) | | perquisites related to employment; |
| (c) | | payments related to accumulated sick leave or other employment benefit credits; |
| (d) | | payments related to retirement or termination of employment; |
| (e) | | payments to reimburse the member for expenses incurred during the course of employment; or |
| (f) | | payments related to employment during a period in which the member is already an active member under section 6.
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Over the past few years, benefit credits and perquisites have become more common—these are not eligible and cannot be included in pensionable salary reporting. Whether employers pay these perquisites in a lump sum or on an ongoing basis does not alter their pension eligibility. Remuneration which originates as benefit credits or perquisites must be excluded from the pensionable salary reported to us.
For additional reference, Section 5, Contributions of our Employer Handbook provides an exhaustive list of pensionable and non-pensionable types of earnings.
Contact us
Your employees rely on us to provide them with accurate information for their retirement planning. It is in all of your employees’ best interest to identify any potential issues before they result in delays when processing pension requests or recalculating pension benefits.
We are developing new systems to ensure that pensionable salary reporting, and consequently retirement pensions, are accurate. Periodically, we will also be requesting additional information or copies of primary documents to ensure pension reporting complies with Plan provisions.
Please let us know if you are unsure whether your reporting practices comply with our Plan provisions. For example, we welcome the opportunity to provide pension reporting guidance when you are negotiating contracts or exploring new concepts.
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