Page Comparison

As well, the YMPE for the year to which the settlement applies should be used to calculate the contributions to be deducted on the retro amount. See the table, later in this section, that shows historical contribution rates and YMPEs.

For HOOPP purposes, only payments relating to prior years are considered retroactive payments. This means that any payment received in the current year, for prior years, is considered to be retro (i.e. a settlement paid in 2020 pertaining to 2018 and 2017). Any payment received in the current year, for the current year, is considered an adjustment to current year contributions, and is not considered retro.

The Retro Calculator feature allows the user to calculate the required contributions on any retroactive salary adjustment paid. This tool is a standalone tool which can be used by the employer throughout the year to calculate retroactive salary contributions. Retro contributions will be calculated for members who contributed to HOOPP in the years covered by the
retroactive salary adjustment. The retro contributions will be based on the member’s annualized earnings for the year(s) of retro and based on the contribution rates in effect for those years.

To calculate contributions on retro:

• If at the date for which the retro amount applies, the member’s annualized earnings are under the YMPE for that calendar year, contributions are deducted using the low rate in place for that year

• If at the date for which the retro amount applies, the member’s annualized earnings are equal to or are higher than that year’s YMPE, contributions are deducted using the high rate in place for that year

Retroactive contributions should not be deducted for a calendar year when a member was not contributing to HOOPP and did not accrue contributory service. If a member receives retro for a year that they were not contributing to HOOPP or a period of time when they were receiving free accrual, do not deduct contributions. If contributions are deducted in these scenarios they will need to be refunded.

You may encounter a situation where there is “retro on retro,” meaning that a settlement is made for a year for which an earlier retro settlement had previously been made. If the first settlement moved the member’s annualized earnings from below the YMPE to above it, when calculating contributions, remember to use the member’s higher annualized earnings figure (the annualized earnings immediately before the second settlement).

Not all Retro Pay is Pensionable
Remember that not all retro pay may be pensionable. Pension contributions are not required on any portion of a payment that relates to:

• A period of time when the member was not a member of HOOPP or was not contributing to HOOPP

• Overtime premium (an additional amount paid above the regular hourly rate)

• Premium pay for working shifts, a statutory holiday, weekend pay, or an unscheduled extra shift (an additional amount paid above the regular hourly rate)

• Ad hoc bonuses

• Sick leave payouts

• Payments in lieu of vacation, or pay in lieu of benefits

While retroactive salary adjustments are usually the result of delayed contract settlements, they also can be caused by other adjustments, such as a pay equity award. A one-time payment that does not result in a change in the member’s rate of pay is not generally considered to be a retroactive salary adjustment. Such a payment is not pensionable and therefore HOOPP contributions should not be deducted. If you are uncertain whether contributions are required, contact HOOPP.

Remitting and Reporting Retro
It is necessary to provide HOOPP with details of the member contributions deducted for each year of the retro payment. Contributions on any retro payment will need to be reported separately from regular current year contributions.

Retroactive contributions should be remitted to HOOPP as soon as they are deducted from the employees payroll. Member retro contribution data is reported along with the retro contribution payments via the HOOPP Insight remittance process.

You will also need to provide this additional information for any member who receives a retro settlement in the last 12 months before termination, retirement, or death that has not already been reported to HOOPP. If retro is paid for years prior to 2004 when different contributions were in place, it will be necessary to report contributions in respect of any retroactive pay for these years separately from your regular monthly contributions.

Retired Members Receiving Retro
Retroactive payments received by a member after they have retired and begun receiving a HOOPP pension are considered pensionable earnings and are subject to pension contributions.
HOOPP will recalculate a retired member’s pension to include the retroactive settlement. However, the pension benefit option originally selected by the member when they retired and commenced their pension will continue to apply.

Retroactive contributions can only be accepted for retired members for a prior year when the member was contributing and accruing contributory service.

Retro for Deceased Members or Members Who Have Terminated Employment
Contributions are not deducted from retroactive settlements that are paid on behalf of deceased members or members who terminated employment with their HOOPP employer before receiving the settlement.

HOOPP will not recalculate a member’s termination benefit to include retroactive adjustments that were not reported when the final termination information is submitted to HOOPP. The amount of contributions and retroactive pay reported on this notice is final and cannot be adjusted.

Examples

The following examples demonstrate how to deduct contributions from retro pay.

Example 1: Annualized Earnings Above the YMPE

On June 1, 2020, a member receives a $5,000 retroactive pay settlement in respect of the years 2016 to 2018, and an adjustment to the current year. Of the $5,000, $1,100 applies to 2016, $1,300 applies to 2017, and $1,600 applies to 2018. The remaining $1,000 applies to 2020, which means that an adjustment to the member’s current year contributions will have to be made. In each of the years covered by the settlement, the member’s annualized earnings prior to the retroactive pay settlement were above the YMPE. Because of this, contributions are made at the high rate in effect for each year, as follows: