- Administrative Expenses
- Application to Participate
- Acceleration of Leave
- Duration of Leave
- Deferral of Leave
- Employment Status
- Health & Welfare Benefits
- Pension Deductions
- Pension Contributions
- Plan Interruption
- Plan Resignation
- Rights under the Plan
- Savings Plan
- Statutory Contributions
- Trust Fund
The Self Funded Leave Plan is a vehicle to provide eligible employees a way to defer a portion of their bi-weekly salary for the purpose of financing a future self funded leave.
The objective of the plan is to provide the opportunity for all regular continuing employees (as defined by the appropriate collective agreement) of the College to plan a leave for educational, recreational, or any other personal purpose and to save for what will in effect be an unpaid leave using before tax dollars over a maximum period of five years.
The College recognizes the value of renewal, upgrading and the freedom of choice in offering the plan to its employees.
The self funded leave plan is available to all employees who hold a regular continuing appointment and have completed their probationary period.
An employee may re-enrol in the plan in the year following a twelve-month period after the return from a leave under this plan.
APPLICATION TO PARTICIPATE IN THE PLAN
During the period October 15 to December 15, Self-Funded Leave Application Forms [PDF] will be submitted to the College President for review and approval. Approved applications will be handed over to Human Resources for processing. If you have any questions about the application process please contact Human Resources.
Participation in the plan will always begin on January 1 of any year.
Subject to compliance with Revenue Canada guidelines and the provisions of the plan, the College will endeavour to grant the application. The President will consult with the employee's supervisor and only in cases of rare operational difficulty will an application not be granted. Such cases would include a proposed leave coinciding with a unique need for the employee to be present at the College or where an unreasonable number of simultaneous leaves in the same department are proposed. (See also Deferral of Leave.)
All requests for self funded leave will not be capriciously denied. Any denial shall be communicated in writing to the applicant with the reasons for the denial.
Application will be made on the standard application form and must include the precise dates of the proposed leave and the details of the savings plan.
DURATION OF LEAVE
Revenue Canada regulations state that a leave must be a minimum of six months and maximum of twelve months duration and must be completed by December 31 of the seventh year of enrolment in the Plan. Otherwise, the balance of the investment will be paid out by the trustee on that date and will require to be accounted for as income by the employee.
DEFERRAL OF LEAVE
A one-time deferral of the planned leave is permitted and may be requested by the employee and will not be unreasonably refused. Such deferral will be arranged so as to allow completion of the leave within seven years of enrolment in the plan.
ACCELERATION OF LEAVE
Acceleration of the proposed leave is not provided for in the plan.
RESIGNATION FROM THE PLAN
Resignation from the plan is permitted in the following circumstances:
Death of an employee
Employee ceases to be employed by the College
An employee is on Long Term Disability.
The above resignation provisions are built into the Trust Agreement under which plan savings contributions are held and invested. However, arrangements for the payout of accrued interest and principal will be subject to the policies of the trustee, including thirty-five (35) days notice, and any payout will be taxable income for the year in which it is received.
The savings plan will not be less than two years and will not normally extend beyond December 31 in the fifth year of enrolment in the plan, unless a one-time interruption of savings (to a maximum of one year) is requested by the employee. A percentage to be applied to each year, not to exceed 33 1/3% will be identified on the application and the aggregate of percentages will not exceed 100% in any case.
Assisted or unassisted leaves available to employees under the appropriate collective agreement will not constitute interruption of employment as far as the plan is concerned, but may have an effect on a savings plan.
Changes to savings plans (i.e. extension, increase) will only be enacted on January 1 of each year and must be requested by the employee, in writing, by December 15 of the preceding year.
For any reason, an employee may request, in writing, that the savings plan be interrupted for a maximum period of one year. However, such action may limit the right to defer the leave in order to have it completed within seven years.
EMPLOYMENT STATUS DURING LEAVE
During the period of the leave under this plan, the employee will be considered to be on unpaid leave. During the period of the leave the employee may not receive any remuneration from the College. This is an Income Tax Act regulation.
Seniority Status - Seniority continues to accrue for BCGEU and CUPE/CIEA employees.
Vacation Accrual - Accrual is based on time worked in affected year. (Normally, accrued vacation will be used prior to the commencement of self funded leave, however, utilization may be related to the operational needs for program offerings.)
EI premiums are based on the employee's gross salary before deferrals during the period of deferral and no premiums are withheld from the deferred amounts when paid to the employee during the leave period. (Revenue Canada, Rulings, December 12, 1989 and BCTF, October 1, 1990.)
Canada Pension Plan (CPP) premiums are based on the salary the employee actually receives during both the deferral period and the leave period. When the deferred amounts are paid to the employee by a trustee, that trustee is deemed to be an employer of that employee by the CPP Act and is therefore required to pay the employer's contribution in respect of the employee. Where the trustee/employer recovers the employer's CPP contributions from amounts otherwise payable to the employee, such amounts will not be part of the employee's gross salary from that employer. (Revenue Canada, Rulings, December 12, 1989 and BCTF, October 1, 1990.)
Income Tax: Monies received from the trustee while on self funded leave represent taxable income and a T4 will be issued for the year(s) in which payments are received.
HEALTH AND WELFARE BENEFITS
During the leave period, maintenance of benefits will be as provided for unpaid leave in the appropriate collective agreements.
If benefits are to be maintained, premiums are the sole responsibility of the employee. Prepayment of premiums may be made by post-dated personal cheques and must be kept up-to-date to ensure continuity of coverage.
Out-of-country benefit coverage for the Medical Services Plan cannot exceed twelve (12) months. MSP requires that they be notified of details concerning the employee's absence from Canada. Continuation of extended health and dental coverage is limited to twelve (12) months for employees on leave without pay.
All benefits will be calculated at 100%.
PENSION DEDUCTIONS DURING SAVINGS PERIOD
Contributions to the employee's pension plan are based on gross earnings before allowance for the contributions to the self funded leave plan. It is then consistent to calculate the pension benefit using the same gross earnings figure. The definition of 'earnings' as outlined in the pension plan is the key. The gross earnings figure is used in determining contribution amounts and in calculating pension benefits.
Please note that the maximum RRSP contribution must be based on the net earnings figures reported on a member's T4 and not on the gross figure before allowance for contributions to the self funded leave plan.
PENSION CONTRIBUTIONS FOR THE LEAVE PERIOD
Permission to make up contributions for the period of the leave (both employee and employer shares) must be acquired from the Superannuation Commission. To be eligible, the employee must return to work for a period of contributory service equal to the length of the leave. If approved, a lump sum payment of employee and employer contributions plus appropriate interest may be made at any time prior to termination of employment or retirement.
Upon receipt of a death certificate, the accrued amount of deferred salary will be paid to the employee's estate.
All contributions to the plan will be transferred by the College to a trust fund as specified in the Trust Agreement. The trust fund will constitute a fund held by the trustee and will not form any part of the revenue or assets of the College.
The trustee will cause contributions made to the plan to be invested in accordance with the directions of the Trust Agreement.
On an annual basis, interest will be paid to the employee on their accumulated investment. Such interest will require to be accounted for by the employee as income in the year of receipt.
A form T5 will be issued to each employee at the end of each year detailing interest earned on their investment.
The trustee will make periodic reports and an annual summary to each participant detailing the principal amount accrued in the plan including any interest not yet paid out.
During a participant's leave, the trustee will cause the accumulated principal amount plus any interest not previously paid out to be remitted to the participant in a form and frequency to be agreed between the two parties, through the College payroll system. A form T4 will be issued to each employee at the end of each calendar year in which a leave is taken.
The College will bear all processing expenses of the plan except where they may relate to fees of the trustee in which case they will become a charge to the Trust Fund to be borne by the participants in accordance with the Trust Agreement.
RIGHTS UNDER THE PLAN
Neither the College nor any participant in the plan will pledge or hypothecate any rights under the plan as security for a loan or for any other purpose.