January 2022 update: Disability Insurance Plan benefits and new collective agreements

Purpose

The purpose of this notice is to provide an update regarding disability benefit adjustments for wave two of collective agreements negotiated to date under the 2018 round of collective bargaining, for eligible plan members who are, or were, in receipt of disability benefits from Sun Life Financial (Sun Life) under the Disability Insurance (DI) Plan. If all collective agreements from the 2018 round have been signed prior, wave two is expected to be completed by spring 2023.

Background

In late 2019, Sun Life, administrator of the DI Plan, completed a project (wave one) to retroactively adjust disability benefits for eligible members on disability, based on new salaries from the 2014 round of collective bargaining. This amounted to approximately 40,000 disability benefit adjustments.

As previously indicated, soon after July 2020 Sun Life began working on a wave two project to implement the adjustments for eligible members covered by the latest collective agreements, with claims being adjusted as new collective agreements are signed. At that time, the estimated timeframe for completion of this project was late spring 2022. However, this was dependant on when all 2018 collective agreements were signed.

Who is eligible

The following DI Plan members are eligible for benefit adjustments under wave two to reflect the retroactive increase in annual salary in their new collective agreements:

1. Plan members who were approved for disability benefits and who received their first payment on or after the effective date of their new collective agreement.
2. Plan members who participated in an approved return to work program on or after the effective date of their new collective agreement.

Disability benefit adjustments are only applicable to the benefits received from the date the previous collective agreement expired.

Calculation of Adjustments

For those plan members approved for benefits who received their first payment on or after the effective date of their revised rate of pay, Sun Life will compare their job classification information with the salary information found in their new collective agreement, subject to validation by Public Services and Procurement Canada (PSPC) or the departmental compensation services. Sun Life will apply the new salary retroactively to determine the plan member’s revised disability benefit.

For those plan members who participated in an approved return to work program on or after the effective date of their new collective agreement, they will have their rehabilitation earnings recalculated by Sun Life.

In order to process the benefit adjustments accurately and in a timely fashion, Sun Life will calculate the rehabilitation earnings using the new annual salary percentage increase provided by the Employer to apply the applicable increase. This may produce a slightly higher benefit of between 1 and 3% for affected plan members.

Implementation Status

Adjustments of disability benefits are processed in the order collective agreements are signed. (For the latest information on specific bargaining unit signing dates, consult the Collective agreements for the public service page). Sun Life has hired additional staff to process the benefit adjustments as quickly as possible. However, they are not required to adjust disability benefits within the same timeframe imposed on the Employer for salary revisions. To date, of the claims that require adjustments, 45% have been completed. However, the 2018 round of collective bargaining is taking longer than expected and some agreements still remain outstanding, which has prolonged the completion of wave two. As a result, if all collective agreements have been signed prior, wave two is now expected to be completed by spring 2023. Further updates will be provided as required.

For those employees whose Long-Term Disability coverage is provided under the Public Service Management Insurance Plan (PSMIP) they will receive similar benefit adjustments through Industrial Alliance, the insurer for the PSMIP. These members may consult the PSMIP benefits and recent salary agreements Information Notice.

For employees who have questions regarding their pay or the status of the collective agreement under which they are covered, they can contact their manager or consult the Government of Canada Pay for the Public Service or Collective Agreements pages.

For any questions regarding this notice, contact the Treasury Board of Canada Secretariat, Employee Relations and Total Compensation Sector.

Marie-Chantal Girard
Senior Assistant Deputy Minister
Employee Relations and Total Compensation Sector
Office of the Chief Human Resources Officer
Treasury Board of Canada Secretariat