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2
Pensionable Service and
Contribution Calculation
for OTRFT Members Methodology and Calculator Demos
June 27, 2013
Agenda
Pensionable Service (OTRFT Members)
Contribution Calculation based on Annualization
Methodology (OTRFT Members)
Contribution Calculation (Miscellaneous)
OTRFT – What’s new?
Effective date of changes
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Pensionable
Service
Pensionable Service
Prior to 2012: Hours worked / Full-Time Equivalent (FTE) hours
Rounded to the nearest month
Minimum of one month
2012 → transition year: January 1 – June 30: As above
July 1 – December 31:
Hours worked / FTE hours
Rounded to 5 decimals
Minimum of one month if enrolled prior to July
After 2012: Hours worked / FTE hours
Rounded to 5 decimals
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Pensionable Service
Hours worked in calendar year relative to FTE
hours For Pensionable Service purposes, a factor of 2.17 should
be applied to Teaching Contact Hours (TCH) to get hours
worked for Academic - Professors
FTE hours are based on position For example, for Support members regular work hours per
day 7, 7¼, 7½, 8
Used for PA and calculating pension benefit
at termination or retirement
Rounded to 5 decimal places
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Pensionable Service: FTEs
Admin / Support members:
FTE hours in year equals hours worked per day times
actual workdays in year
Workdays in year vary depending on calendar year
(260, 261, or 262)
For example:
Support member works 7 hours/day
Workdays in 2013 = 261
FTE hours in year = 7 x 261 = 1827 (not 1820)
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Pensionable Service: FTEs
Academic members:
Professors
FTE hours = 44 hrs x 43 wks = 1892
Librarians / Counsellors
FTE hours = 35 hrs x 43 wks = 1505
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Pensionable Service: FTEs
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Job Group FTE Hours FTE in 2013
(261 workdays)
Administration 7.5 x workdays 1957.5
Support – 7 hrs/day 7 x workdays 1827
Support – 7¼ hrs/day 7.25 x workdays 1892.25
Support – 7½ hrs/day 7.5 x workdays 1957.5
Support – 8 hrs/day 8 x workdays 2088
Academic -
Librarian/Counsellor
1505 1505
Academic - Professor 1892 1892
Pensionable Service: Lump Sums
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Lump sum payments include, for example: continuing education courses
task or assignment based work (e.g. curriculum
writing, marking)
Difficult to assign service credit to lump sums
number of hours to complete task varies
Pensionable Service: Lump Sums
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Options for assigning service credit to lump sums:
1. Apply known hourly rate of pay
Rate paid to complete task should be
consistent with other rates of pay
Service credit would be calculated accordingly
2. Estimate hours to complete task
If no consistent rate of pay, determine how long
it should take to complete task
Report the corresponding number of hours
Pensionable Service: Lump Sums
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1. Apply known hourly rate of pay - example
Service credit = Lump Sum / hourly rate of pay
John writes a document:
His hourly rate of pay is $50
He receives $1,200
John would accrue $1,200 / $50 = 24 hours
of service credit for writing the document
Pensionable service = 24 / FTE for position
Pensionable Service: Lump Sums
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2. Estimate hours to complete task - example
Service credit = Estimated number of hours to
complete task
Jane has been hired to mark mid-term papers
It is anticipated that it should take her 50
hours to complete the marking
Pensionable service = 50 / FTE for position
Pensionable Service
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Pensionable Service Calculator
Excel spreadsheet has been developed to
calculate Pensionable Service for OTRFT
Spreadsheet can be used to help code your
payroll system
Data elements
Formulas
Pensionable Service calculation required:
Annually (for DCT reporting and PAs)
Terminations and Retirements
Leaves
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Pensionable Service Calculator
Calculator inputs
Year (to determine FTE Hours)
Enrolment/Termination Dates (if in the calendar year)
For each OTRFT contract:
• Employee Group
• Contract Start/End Dates (to cap service for contract)
• Hours in calendar year (regular and, if applicable, TCH)
For each lump-sum paid task:
• Employee Group
• Lump Sum and Hourly Rate OR Estimated Task Hours
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Pensionable Service Calculator
Example
OTRFT Member joins the Plan April 1, 2013
• Maximum Pensionable Service
197/261 = 0.75479 (197 workdays Apr 1-Dec 31)
Contract #1:
• Administration, April 1-October 31, 800 hours
• Maximum Pensionable Service
154/261 = 0.59004 (154 workdays Apr 1-Oct 31)
• Calculated Pensionable Service
800 hours / 1957.5 FTE = 0.40868
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Pensionable Service Calculator
Contract #2:
• Teaching (Academic – Professor), September 1-
December 31, 180 TCH + 10 non-TCH
• Maximum Pensionable Service
87/261 = 0.33333 (87 workdays Sep 1-Dec 31)
• Calculated Pensionable Service
[(180 x 2.17 + 10) hours] / 1892 FTE = 0.21173
Contract #3:
• Lump-sum based task, Support role (7-hour workday)
• Paid $1,800, hourly rate $30 1800/30 = 60 hours
• Calculated Pensionable Service
60 hours / 1827 FTE = 0.03284
Total Pensionable Service 0.65326
• Not capped (less than maximum for year)
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Pensionable Service Calculator
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Pensionable Service Calculation for OTRFT Member ver: 2013.0627
Employee Name
Employee ID/SIN
Calendar Year Select a year
OTRFT Hours Worked and FTE Hours
Contract Start Contract End FTE Hours Errors/Notes
Job #1
Job #2
Job #3
Job #4
Job #5
Job #6
Job #7
Job #8
Job #9
Job #10
Lump-Sum Based Work
Lump Sum Service Type Hourly Rate Errors/Notes
LS #1
LS #2
LS #3
LS #4
LS #5
LS #6
LS #7
LS #8
LS #9
LS #10
Total
Pensionable Service for
Maximum Pensionable Service
Calculated Pensionable Service
Lump Sum
Amount Job Group
Numerator
(Hours)
Total Hours in
Cal. Year
Denominator
(FTE Hours)
Pensionable
Service
Hours in Cal.
Year
(Regular)
TCH in Cal.
Year
(Professors)Job Group
Pensionable
Service
Maximum
Service
Estimated
Task Hours
Clear
Show/Hide Lump Sum Section
Pensionable Service Calculator
Data entry cells shaded in yellow
Dropdown cells shaded in blue
Basic data entry:
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Pensionable Service Calculation for OTRFT Member
Employee Name
Employee ID/SIN 10101
Calendar Year 2013
Date of Enrolment/Switch to OTRFT (if in 2013) 1-Apr-2013
Date of Termination/Last day of OTRFT (if in 2013)
Example 1
Pensionable Service Calculator
Data entry for regular OTRFT Contracts
Space for up to 10 regular contracts
Data entry for Lump-Sum based work
Space for up to 10 Lump Sum-paid tasks
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OTRFT Hours Worked and FTE Hours in 2013
Contract Start Contract End FTE Hours
Job #1 1-Apr-2013 31-Oct-2013 1957.5 0.59004 800 800 0.40868
Job #2 1-Sep-2013 31-Dec-2013 1892 0.33333 10 180 400.6 0.21173
Job #3
Job #4
Maximum
Service
Pensionable
Service
Hours in Cal.
Year
(Regular)
TCH in Cal.
Year
(Professors)Job Group
Administration
Academic - Professor
Total Hours in
Cal. Year
Lump-Sum Based Work in 2013
Lump Sum Service Type Hourly Rate
LS #1 Hourly Rate of Pay $1,800.00 $30.00 60 1827 0.03284
LS #2
LS #3
Pensionable
Service
Estimated
Task Hours
Numerator
(Hours)
Denominator
(FTE Hours)
Lump Sum
Amount Job Group
Support (7 hrs/day)
Pensionable Service Calculator
Pensionable Service results
Maximum Pensionable Service based on fraction
of the year in the Plan
Total Pensionable Service for all regular contracts
and lump sum-paid tasks compared to maximum
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Pensionable Service for 2013
Maximum Pensionable Service 0.75479 (Based on enrolment and/or termination date)
Calculated Pensionable Service 0.65326
Total OTRFT Pensionable Service for 2013 0.65326
Pensionable Service
Calculator (OTRFT Members)
Demonstration
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Pensionable Service
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Contributions
based on
Annualization
Methodology
Contribution Calculation
Replaces “Step-rate” method
Contribute at low and high rates on each pay
Contributions taken are consistent with how
benefits are credited
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Contribution Calculation
Annualization calculation methodology for
contributions based on hours paid relative to
FTE hours
Methodology is the same regardless of
payroll frequency (i.e. bi-weekly or monthly /
semi-monthly)
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Contribution Calculation
Brings YMPE earnings threshold down to the
fraction of the year paid in a pay period
“Step-rate calculation on a fraction of a year
basis”
Pro-rating based on actual hours paid in the
period versus FTE hours
“Pay Period Percentage” (PP%): proportion of
a year that a member is paid in a pay period
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Contribution Calculation
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Cumulative
Earnings in Year
above
YMPE ($51,100)
Contribute at 14.4%
Cumulative (to RPP)
Earnings in Year Earnings in
up to Pay Period
YMPE ($51,100) above
YMPE
Earnings in
Contribute at 10.8% Pay Period
(to RPP) up to
YMPE
Annual Step-Rate Pay Period Step-Rate
Contribution Calculation: Actual FTE hours
FTE hours equal number of possible paid
workdays in each year multiplied by number
of hours expected to be worked by a full-time
member each day
If paid bi-weekly, FTE hours will vary
depending on pay periods in year (26 or 27)
If paid monthly/semi-monthly, FTE hours will
vary depending on workdays in calendar year
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Contribution Calculation: Actual FTE hours
Bi-weekly pay periods:
For example – Support (7 hr/day):
Workdays in pay period = 10
Bi-weekly pay periods in year = 26
Paid workdays in year = 10 x 26 = 260
FTE hours = 260 x 7 = 1820
Monthly / semi-monthly pay periods:
For example – Support (7 hr/day):
Paid workdays in year = 261 (2013)
FTE hours = 261 x 7 = 1827
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Contribution Calculation: Standard FTE hours
Standard FTE for all OTRFT job classes:
Suggested standard FTE = 1900
Used in calculating contributions only
Pensionable service must use actual FTE
Simplifies the programming
Can combine multiple jobs/contracts
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Contribution Calculation: FTEs in 2013
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Job Group FTE Hours
(26 bi-weekly
pays)
FTE Hours
(monthly / semi-
monthly pays)
Administration 1950 1957.5
Support – 7 hrs/day 1820 1827
Support – 7¼ hrs/day 1885 1892.25
Support – 7½ hrs/day 1950 1957.5
Support – 8 hrs/day 2080 2088
Academic -
Librarian/Counsellor
1505 1505
Academic - Professor 1892 1892
OR
Standard FTE 1900 1900
Contribution Calculation: Actual vs Standard FTEs
Example:
Admin: 30 hrs/wk at $50/hr
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FTE hours Hours/week Pay Rate Earnings/week Contrib
Option 1
Actual FTE 1950 30 $50/hr 30 x $50 = $1,500 $187.69
Option 2
Standard FTE 1900 30 $50/hr 30 x $50 = $1,500 $186.96
Difference ($0.73)
(0.39%)
Contribution Calculation: Actual vs Standard FTEs
(multiple jobs)
Options if member has multiple jobs with
different FTE at the same employer:
Run payroll for each job using actual FTE in
calculating the contributions
OR
Use the standard FTE for all jobs and add all
earnings and hours
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Contribution Calculation: Actual vs Standard FTEs
(multiple jobs)
Example:
Faculty: 6 TCH* at $60/hr
Support (7 hr/day): 14 hrs at $35/hr
Admin: 22.5 hrs at $40/hr
* TCH must be multiplied by 2.17 before entering into spreadsheet
(6 x 2.17 = 13.02)
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Contribution Calculation: Actual vs Standard FTEs
(multiple jobs)
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Job type FTE hours Hours/week Pay Rate Earnings/wk Contrib
Option 1
Faculty 1892 6 x 2.17 = 13.02 $60/hr 6x$60 = $360 $39.18
Support 1820 14 $35/hr 14x$35 = $490 $56.41
Admin 1950 22.5 $40/hr 22.5x$40 = $900 $108.37
Total 49.52 $1,750 $203.96
Option 2
Standard 1900 49.52 $1,750 $204.06
Difference $0.10
(0.05%)
Contributions based on Annualization Methodology
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Contribution Calculator
OTRFT contribution calculation spreadsheet
has been developed
Methodology to work with College payrolls
Spreadsheet can be used to help code your
payroll system
Data elements
Formulas
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Contribution Calculator
Two versions of spreadsheet
1. FTE Hours determined by various parameters:
• Pay Frequency
• # of pay periods in the year (26 or 27 for bi-
weekly payrolls)
• Employee Group
2. Standard FTE = 1900 Hours
• Reduces number of inputs
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Contribution Calculator
Standard 1900 FTE for all OTRFT members
For Contribution calculation purposes only
Not for Pensionable Service purposes
Allows payments from multiple contracts or job
categories to be added up and have a single
contribution calculation performed on the total
Standard FTE for OTRFT members means:
Job group not required
Pay frequency and pay periods in year not
required
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Contribution Calculator
Calculator inputs (Standard FTE Hours version)
Member name and ID (optional)
Year (defaults to 2013)
Actual Hours Paid in Pay Period
• Regular Hours
• TCH (for Professors) multiplied by 2.17
• Hours for Lump Sum payments in line with hours used
for Pensionable Service
Pensionable Earnings Paid in Period
• Regular and Lump Sum combined into one input field
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Contribution Calculator
Example OTRFT member:
In a given pay period, member is paid:
• 30 regular hours x $40/hr = $1,200
• $600 lump sum for a task that pays $60/hour 10
hours pensionable service, use for contributions as well
• Total for pay period: 40 hours, $1,800
Pay Period Percentage = 40 / 1900 FTE = 2.105263%
YMPE in pay period: $51,100 x 2.105263% = $1,075.79
Split earnings: $1,075.79 up to YMPE, $724.21 above
Calculate contributions:
• Low Rate: 10.8% x $1,075.79 = $116.19
• High Rate: 14.4% x $724.21 = $104.29
• Total: $220.48
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Contribution Calculator (show details)
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Contribution Calculation Worksheet - OTRFT
Please note that this spreadsheet can be used for all other than regular full-time (OTRFT) members.
> Multiply Teaching Contact Hours (TCH) by 2.17 and add to non-TCH hours for Actual Hours Paid input.
> For task-based lump sum payments, determine hours for task either based on an hourly rate (lump sum/hourly rate = hours paid), or
based on the expected hours the task should take (regardless of how long it actually takes). Use the same number of hours
for contribution purposes as for pensionable service purposes.
Please enter information in blue dropdowns and yellow data entry cells
Contributions for the pay period will appear in the bright green cells at the bottom of the worksheet
Member Name = (optional)
Member ID/SIN = (optional)
Year = 2013
YMPE = $51,100.00
Contribution Rate (% up to YMPE and % above YMPE) = 10.8% and 14.4%
FTE Hours in Year = 1900 Standard FTE of 1900 hours for contributions for all OTRFT
Actual Hours Paid in Pay Period ** =
Actual Pensionable Earnings Paid in Period (including Lump Sums) =
Pay Period Contribution CalculationStep 1: Calculate Pay Period Percentage (PP%, portion of the full calendar year's hours being paid in the current period)
Pay Period Percentage (PP%) = (Hours Paid this Prd) / (FTE Hours in Year)
( ) / ( ) = (A)
Step 2: Calculate YMPE in Pay Period
YMPE in Period = (YMPE) x (PP% - A)
( ) x ( ) = (B)
Step 3: Split Pensionable Earnings in the Pay Period into components up to and above the YMPE
Earnings in Period up to YMPE = Minimum [ (Earnings in Period) , (B) ]
Minimum [ ( ) , ( ) ] = (C)
Earnings in Period above YMPE = (Earnings in Period) (C)
( ) - ( ) = (D)
Step 4: Contributions up to and above the YMPE
Contributions up to YMPE = (% up to YMPE) x (C)
( ) x ( ) = (E)
Contributions above YMPE = (% above YMPE) x (D)
( ) x ( ) = (F)
Step 5: Total Contributions for Pay Period
Total Contributions (all RPP) = (E) + (F)
( ) + ( ) = (G)
** Multiply TCH by 2.17 before entering actual hours paid.
** For Lump Sum payments, use the same number of hours for
contribution purposes as those used for pensionable service
purposes (Lump Sum/Hourly Rate OR Estimated Task Hours).
ver: 2013.0627 (standard FTE)
Clear Print
Show/Hide Details
Contribution Calculator (hide details)
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Contribution Calculation Worksheet - OTRFT
Please note that this spreadsheet can be used for all other than regular full-time (OTRFT) members.
> Multiply Teaching Contact Hours (TCH) by 2.17 and add to non-TCH hours for Actual Hours Paid input.
> For task-based lump sum payments, determine hours for task either based on an hourly rate (lump sum/hourly rate = hours paid), or
based on the expected hours the task should take (regardless of how long it actually takes). Use the same number of hours
for contribution purposes as for pensionable service purposes.
Please enter information in blue dropdowns and yellow data entry cells
Contributions for the pay period will appear in the bright green cells at the bottom of the worksheet
Member Name = (optional)
Member ID/SIN = (optional)
Year = 2013
YMPE = $51,100.00
Contribution Rate (% up to YMPE and % above YMPE) = 10.8% and 14.4%
FTE Hours in Year = 1900 Standard FTE of 1900 hours for contributions for all OTRFT
Actual Hours Paid in Pay Period ** =
Actual Pensionable Earnings Paid in Period (including Lump Sums) =
Pay Period Contribution CalculationTotal Contributions for Pay Period
Total Contributions (all RPP) = (E) + (F)
( ) + ( ) = (G)
** Multiply TCH by 2.17 before entering actual hours paid.
** For Lump Sum payments, use the same number of hours for
contribution purposes as those used for pensionable service
purposes (Lump Sum/Hourly Rate OR Estimated Task Hours).
ver: 2013.0627 (standard FTE)
Clear Print
Show/Hide Details
Contribution Calculator
Data entry cells shaded in yellow
Dropdown cells shaded in blue
Data entry (Standard FTE Hours version):
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Member Name = (optional)
Member ID/SIN = 12345 (optional)
Year = 2013
YMPE = $51,100.00
Contribution Rate (% up to YMPE and % above YMPE) = 10.8% and 14.4%
FTE Hours in Year = 1900 Standard FTE of 1900 hours for contributions for all OTRFT
Actual Hours Paid in Pay Period ** = 40
Actual Pensionable Earnings Paid in Period (including Lump Sums) = $1,800.00
Pay Period Contribution Calculation
Example Calc
** Multiply TCH by 2.17 before entering actual hours paid.
** For Lump Sum payments, use the same number of hours for
contribution purposes as those used for pensionable service
purposes (Lump Sum/Hourly Rate OR Estimated Task Hours).
Contribution Calculator
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Steps in the Calculation Logic
1. Calculate the PP%
• Member paid for 40 hours
• Standard 1900 FTE Hours in calendar year OR
FTE determined by pay frequency and job group
2. YMPE in pay period
• “Step-rate in pay period” threshold
Pay Period Contribution CalculationStep 1: Calculate Pay Period Percentage (PP%, portion of the full calendar year's hours being paid in the current period)
Pay Period Percentage (PP%) = (Hours Paid this Prd) / (FTE Hours in Year)
( 40 ) / ( 1900 ) = 2.105263% (A)
Step 2: Calculate YMPE in Pay Period
YMPE in Period = (YMPE) x (PP% - A)
( $51,100.00 ) x ( 2.105263% ) = $1,075.79 (B)
Contribution Calculator
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Steps in the Calculation Logic (cont’d)
3. Split pensionable earnings into portions up to and
above the YMPE
4. Contributions (low/high rates)
5. Total Contributions (all RPP for OTRFT)
Step 3: Split Pensionable Earnings in the Pay Period into components up to and above the YMPE
Earnings in Period up to YMPE = Minimum [ (Earnings in Period) , (B) ]
Minimum [ ( $1,800.00 ) , ( $1,075.79 ) ] = $1,075.79 (C)
Earnings in Period above YMPE = (Earnings in Period) (C)
( $1,800.00 ) - ( $1,075.79 ) = $724.21 (D)
Step 4: Contributions up to and above the YMPE
Contributions up to YMPE = (% up to YMPE) x (C)
( 10.8% ) x ( $1,075.79 ) = $116.19 (E)
Contributions above YMPE = (% above YMPE) x (D)
( 14.4% ) x ( $724.21 ) = $104.29 (F)
Step 5: Total Contributions for Pay Period
Total Contributions (all RPP) = (E) + (F)
( $116.19 ) + ( $104.29 ) = $220.48 (G)
Contribution Calculator
(Annualization Methodology)
(OTRFT Members)
Demonstration
49
Contributions based on Annualization Methodology
50
Contributions
based on
Annualization
Methodology
(Miscellaneous)
Contribution Calculation: Miscellaneous
Difference between FT and OTRFT
Lump sum only (FT)
Year-end reconciliation
Pension Adjustments
52
Contribution Calculation: Miscellaneous
Difference between FT and OTRFT
53
Service
measure
PP% Different
methodology
depending on
pay frequency
Lump
sums
Earnings Allocate to
RCA during
year
FT Hours
(Support) or
days
(Admin /
Faculty)
Fraction
of a pay
period
Yes One-time; no
hours
attached
Basic and
one-time
lump sums
entered
separately
Yes
OTRFT Hours Fraction
of a year
No Hours
attached
One entry
(lump sums
included
with basic)
No
Contribution Calculation: Miscellaneous
Lump sum only – FT member
Run the final partial pay period without lump sum
Run the final partial pay period with lump sum
Difference equals contributions on lump sum
Example:
Final regular pay: $1,800 (5 days)
Contributions: $223.82
Lump sum vacation paid at next pay: $10,000
Contributions on regular pay ($1,800) + lump sum ($10,000):
$1,663.82
Contributions on lump sum = $1,663.82 – $223.82 = $1,440
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Contribution Calculation: Miscellaneous
Year-end reconciliation may be required
YMPE threshold
FT: if go from below to above threshold in a pay period, but
annualized earnings are below
OTRFT: if multiple jobs or concurrent with annualized earnings
below / above threshold
RCA threshold
FT: if go from below to above threshold in a pay period, but
annualized earnings are below
OTRFT: if multiple jobs or concurrent with annualized earnings
above threshold
Standard FTE
If actual contributions versus expected contributions are not within
tolerance
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Contribution Calculation: Miscellaneous
Pension Adjustments (PA)
Scenario: Earnings in year but no service
Contract ends in one year but final pay is in next year
Not known if member will get another contract
If no other contract, then will have earnings but no service
T4 reporting
Report earnings in current year (no service attached)
Recalculate prior year’s PA including additional earnings
Difference between prior year’s PA and recalculated PA
should be reported as current year’s PA
56
OTRFT
What’s new?
OTRFT - what’s new?
Lump sums – must attach hours using either:
Hourly rate of pay, or
Estimated hours to complete task
FTE for Support staff is no longer 1820 for all
FTE should be based on position (e.g. if Support member
working 8hrs/day, then FTE is 8 x workdays = 2088 in 2013)
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OTRFT - what’s new?
FTE for Faculty is no longer 648
Academic – Professors: FTE = 1892
Academic – Librarians/Counsellors: FTE = 1505
Academic - Professors hours worked equal:
TCH x 2.17 + non-TCH
59
Effective date of changes
Contracts that started prior to January 1, 2014 and
continue into 2014:
Implement Pensionable Service calculation effective Jan 1,
2014
Implement contribution calculation effective the first pay of
Jan 2014
Contracts starting on or after January 1, 2014:
Implement new rules for Pensionable Service and
contribution calculations effective contract start date
60
Questions about this webinar?
Tracey Leask
416.673.9009
Calculator inquiries:
Matt Kerbel
416.673.9037
General inquiries:
Phone: 416.673.9000
Toll Free: 1.800.355.2228
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