The Public Service Management Insurance Plan benefits and recent salary agreements

Purpose

The purpose of this notice is to provide information regarding Long-Term Disability (LTD) benefit adjustments that will be made as a result of revised rates of pay for plan members who are, or were, in receipt of LTD benefits from Industrial Alliance under the Public Service Management Insurance Plan (PSMIP).

Who is affected

The following PSMIP plan members are eligible for benefit adjustments to reflect the retroactive increase in annual salary:

1. Plan members who were approved for Long-Term Disability benefits and who received their first payment on or after the effective date of their revised rate of pay.
2. Plan members who participated in an approved return to work program on or after the effective date of their revised rate of pay.

Disability adjustments are only applicable on the benefits received from the date the previous rate of pay expired.

Calculation of Adjustments

For plan members approved for benefits and who received their first payment on or after the effective date of their revised rate of pay, Industrial Alliance will work with TSB to determine the employee’s job classification information with the salary information found in their new agreement. Industrial Alliance will apply the new salary retroactively to determine the plan member’s revised disability benefit.

Plan members who participated in an approved return to work program on or after the effective date of their new agreement will have their rehabilitation earnings recalculated.

In order to accelerate the benefit adjustment process and reduce the effect of any errors in the pay system, rather than use actual revised earnings, the increase in rehabilitation earnings will be estimated for periods of rehabilitation. This may produce a slightly higher benefit of between 1 and 3 percent for affected employees.

Implementation

The adjustment of LTD benefits, which has already begun, will be processed in the order the agreements are signed. This work is expected to be completed in fall 2019.  Although a much larger number of claims will be adjusted in a shorter period of time, Industrial Alliance is not required to produce long term disability benefit adjustments within the same timeframe imposed on the employer to implement salary revisions.

Represented employees whose disability coverage is provided under the Disability Insurance Plan will receive similar benefit adjustments through Sun Life Financial. Please consult the Disability Insurance Plan and new collective agreements Information Notice.

Should you have any questions regarding this notice, please contact Treasury Board of Canada Secretariat, Pensions and Benefits Sector.

Marie-Chantal Girard
Assistant Deputy Minister
Pensions and Benefits Sector