4.7 Contributions in Other Situations |
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Weekend Workers Laboratory Medicine Funding Framework Agreement (LMFFA) The Ministry funding is paid to employers in the form of a single payment that is meant to cover the cost of both the additional salary and any costs incurred by employers that are associated with providing additional benefits to members. For HOOPP purposes, the portion of the payment that relates to salary is considered pensionable and the portion of the payment that relates to benefit costs is considered It is recommended that upon receiving the payment from the Ministry, you withhold the amount required to pay for additional benefits, including your employer required HOOPP Missed Contributions
When required contributions are missed, it is mandatory that both your organization and the member make up those contributions. Where applicable, interest will be charged.
HOOPP will contact you directly to obtain this information. After receiving the information HOOPP will send you a notice and invoice which outlines the cost of the required contributions, plus interest charges (if applicable) and instructs you to remit the contributions to HOOPP. If the contributions are made later than the due date, additional interest will apply. HOOPP also has a statutory obligation to notify the FSRA when an employer does not remit required contributions to HOOPP within 30 days from the end of the In all other cases of missed contributions, upon being notified, HOOPP will notify you of the amount of missed member and employer contributions. You must report the employee contributions plus any interest in box 20 Registered Pension Plan Contributions on the member's T4 slip for the year in which the missed contributions are made. Where the missed contributions are in respect of a prior taxation year, the contributions should be added with the required contributions for the current year. Late contributions paid retroactively for 1990 or later years will require an amended pension adjustment (PA) for each year in which the contributions apply. HOOPP will provide you with the revised PA upon receipt of the funds. In the event that you need to report contributions that apply to pre-1990 taxation When a Job is Jointly Funded As a result, you should use the universal payroll deduction method when calculating contributions. The formula prorates the member's contributory service, based on the earnings paid by the HOOPP employer, and takes into account the member's annualized earnings. There is, however, an important twist in how the member's annualized earnings are derived. Where part of the salary is paid by a HOOPP employer and part by a non-HOOPP employer, the annualized earnings are based on the sum of the two salaries. But while the salaries paid by the two employers are added together to calculate the member's annualized earnings, that is not the case for the member's earnings per pay. The member's earnings per pay reflect only the salary paid by the HOOPP employer. Let's take the example of a member who works 52 weeks a year, and is paid a total of $150,000: For HOOPP purposes, the member’s annualized earnings would be $150,000. However, the member’s contributory service would be prorated to reflect the fact that the member’s earnings per pay, and contributions made to HOOPP are based only on the member’s earnings from the HOOPP employer. In this example, the member’s contributory service for the year, measured in weeks, would be 100,000/150,000 × 52 weeks, or 34.67 weeks, assuming the member works for the entire year. Temporary Periods of Reduced Earnings Let HOOPP know when a member is starting a temporary period of reduced earnings by submitting Leaves of Absence information and selecting Approved Work Schedule Reduction as the leave type. When it ends, submit additional Leaves of Absence information and select Approved Work Schedule Reduction as the leave type. This is so HOOPP can credit the member with the correct amount of service. Members who want to "top up" contributions can either make these contributions periodically throughout the temporary period of reduced earnings/approved work schedule reduction, or remit them to HOOPP through you, the employer no later than twelve months (temporarily extended from six months) after the end of the temporary period of reduced earnings/approved work schedule reduction. Members who choose to "top up" their contributions each payday can, at any time during the period, switch back to making contributions on their actual earnings. If they make such a switch, they will not be allowed to resume periodic contributions, and will have to provide the rest of their "topped up" contributions as a lump sum no later than twelve months (temporarily extended from six months) after the end of the temporary period of reduced earnings/approved work schedule reduction. However, once the payment has been collected from the member, the total lump sum must be paid within 30 days of the end of the month in which the deductions were made. Contributions for members who want to contribute during a temporary period of reduced earnings are based on what they were earning before the period of reduced earnings/approved work schedule reduction began. These "deemed earnings" must also include any subsequent pay increases. The contributions of part-time employees should be based on their average earnings for the 10 weeks immediately preceding the period of reduced earnings/approved work schedule reduction. If the member does not "top up" contributions within twelve months (temporarily extended from six months) from the end of the period of reduced earnings, they lose the opportunity to contribute, and you are relieved of any responsibility to match the contributions. HOOPP's buyback rules do not apply in this situation, so the member is unable to purchase the service later. Contributions paid on a periodic basis during a temporary period of reduced earnings (also referred to as an Approved Work Schedule Reduction) are reported to HOOPP via the annual member data collection process if:
If the member's contributions are received as a lump sum after you have completed your annual member data collection for the year in which the temporary period of reduced earnings began, contributions will need to be submitted via a Lump Sum payment process in HOOPP Insight. Interest will be charged on lump sum payments received more than 30 months after the beginning of the temporary period of reduced earnings. The employee can try to make all contributions relating to a leave/temporary period of reduced earnings/approved work schedule reduction each payday, so that contributions are made during the same calendar year in which the temporary period of reduced earnings occurs. Making contributions in the year in which they will apply will ensure the member's HOOPP annual statement and T4 slip reflect the correct contributions for the year. Should an employee elect to pay contributions that apply to a previous calendar year in the current calendar year, you must report the contributions on the member's T4 slip for the year in which the contributions are made. The employee's contributions should be reported in box 20 Registered Pension Plan Contributions. Contributions on Termination Payments
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Type of Payment | If paid as… | Contributions required |
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Payments in lieu of termination notice period not exceeding amount required by | lump sum | yes |
salary continuance | yes | |
Employment Standards Act or collective agreement |
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Payments in lieu of termination notice period exceeding amount required by Employment Standards Act or collective agreement | lump sum | Contributions allowed on excess portion if employer and member agree to make them and if the employment relationship continues for the applicable period. |
salary continuance | yes | |
Severance pay | lump sum | no |
salary continuance | yes | |
Other: retiring allowances, lump sum payments in lieu of benefits, etc. | lump sum | no |
According to ITA rules, members cannot continue to contribute to HOOPP after the date their employment is terminated. Contributions are permissible when a member receives severance pay as salary continuance because their employment continues beyond the date they stop working but contributions are not permissible when a member receives severance as a lump sum payment because the employment relationship ends. As a general rule, contributions should not continue after the date of termination that appears on an employee’s Record of Employment (ROE).
Involuntary termination or retirement settlements may affect a member's pension benefits. Contact HOOPP before finalizing any settlement that will provide the member with additional service or pensionable earnings to ensure it does not contravene the HOOPP Plan Text or legislation governing pension payments. HOOPP cannot be bound by agreements made between members and employers if the agreement does not conform with applicable legislation or the provisions of the Plan. In addition, if you are unsure about any of the types of payments outlined in the chart that appears above, contact
HOOPP for help.
If you are offering a severance package consisting of several different types of payments, for example, payment for a period of notice and then severance payments (paid out in the form of a salary continuance) until the member finds work, contributions are required on the pensionable portions of the
package as described earlier, regardless of the order in which the payments are made.
For HOOPP purposes, the last day at work for a member receiving salary continuance is the last day of the continuance, or the prorated equivalent period if the member is receiving part pay. For example, a member who receives half of their pre-termination pay through a year-long salary continuance will be credited with six months of contributory service and eligibility service.
If a member receives a lump sum payment relating to a termination notice period, the last day at work should be reported as the last day of the legal notice period required under the Employment Standards Act, a collective agreement, or an employment contract. For example, the last day at work for a member who is entitled to two weeks' notice is the last day of that two-week period.
However, if both you and the member agree, contributions can also be made on the portion of a lump sum payment in lieu of termination notice that exceeds the statutory notice period, where the intention of the parties is for the employment relationship to continue but the payment is made in a lump sum. For example, if a member is entitled to two weeks' notice, but receives a lump sum payment equal to four weeks' pay as a payment of salary (and not a retiring allowance), an agreement can be made to make contributions on the full amount (four weeks' pay), rather than only the statutory amount (two weeks' pay). In this situation, the member's last day at work would be the last day of the four-week period, consistent with this period having been treated as salary continuance.
Contributions During Layoff Recalls
Working an occasional shift while on a leave due to a temporary layoff does not interrupt the leave. Under these circumstances, contributions are not permitted. A return to work of a more permanent nature is considered a break in the leave, and therefore contributions should be deducted from earnings.
Contributions for Days Off in Lieu of Overtime
Members who bank their overtime pay and are paid from the banked pay when they take a “lieu” day should contribute on this pay. If contributions are not deducted, the member will lose contributory service for the “lieu” days.