Extension of Member Contributions for leaves of absences

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Extension of Member Contributions for leaves of absence

In April 2020, HOOPP introduced a special temporary extension on contribution payments for leaves of absence to provide more flexibility and support to our members during a challenging time. The temporary extension, which provided an additional 6 months (for a total of 12 months) after the end of the leave to make pension contributions, will continue to apply to leaves starting on or before December 31, 2021. This extension applies to all of types of leaves currently referenced in Section 5.1 of the Employer Administration Manual, including including statutory leaves, employer-approved leaves, health leaves, strikes or lockouts, and more.

Member eligibility

All leaves of absence periods starting on or before December 31, 2021 are eligible for the special temporary extension of an additional 6 months (for a total of 12 months) for contribution payments. Leaves starting on or after January 1, 2022 will be due within 6 months from the end date of the leave period.

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 2021 and the payment is made in June 2022, 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.