Extension of Member Contributions for leaves of absences

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Extension of Member Contributions for leaves of absence

Members will now have greater flexibility when making contributions towards a leave of absence.

The current timeline has been extended with an additional 6 months to a total of 12 months from the end date of the leave period.

This extension applies to all of types of leaves currently referenced in Section 4.2 of the Plan Text, including statutory leaves, employer-approved leaves, health leaves, strikes or lockouts, and periods of reduced services.

Member eligibility

All leaves of absence periods are now eligible for the extension of an additional six months to a total of 12 months when making contributions, regardless of when the current provincial emergency ends. Leaves starting after the end of the provincial emergency will continue to qualify for the extension.

Exception: If the leave payments were due before March 17th or January 12th (the start of the state of emergency), this extension cannot be retroactively applied. If the 6 months have not expired by this date, the extension can be given.

As per the normal process, all payments continue to be due upon termination or retirement (i.e., the extension does not apply beyond the member’s employment end date).

PSPA impacts

In accordance with current rules, contributions made after April 30 in the year after the year in which the leave ended, will result in a PSPA. This will reduce the member’s RRSP room.

Example: If the leave ended in July 2020 and the payment is made in June 2021, CRA will need to certify the PSPA.

If the member makes the contributions before April 30, it will flow through PA reporting and there is no need for a PSPA.
If the member waits until after April 30, and they don’t have enough unused RRSP contribution room to accommodate the PSPA, it’s possible that they will need to deregister RRSP funds before the CRA will certify the PSPA.