Pension and benefits implications for casual workers

Date: October 2022

To: Heads of Human Resources and managers

Purpose

The purpose of this notice is to inform the human resources community and managers of the pension and benefits implications when hiring casual workers for a period longer than 90 days.

Background

Section 50 of the Public Service Employment Act (PSEA) limits the period of employment for casual workers to a maximum of 90 working days in one calendar year. However, there is flexibility provided under the PSEA to hire casual workers for a period of more than 90 days when:

1. the calendar year end falls within the dates of the contract, and
2. when there is no break in service between appointments in different organizations.

Pension implications

A casual worker who is hired on a full-time or part-time basis (12 hours or more per week) for a period of more than 6 months must contribute to the pension plan and supplementary death benefit. If their casual appointment ends before reaching 2 years of continuous service, they will receive an automatic return of their contributions.

Retired plan members returning as casual workers for a period of more than 6 months could be negatively impacted since their monthly pension must stop when they begin contributing to the pension plan. A new date for the calculation of pension indexation must also be established based on the new retirement date.

Benefits implications

A casual worker who is hired for a period of 6 months or less is not eligible for coverage under the Public Service Health Care Plan (PSHCP), the Public Service Dental Care Plan (PSDCP), the Disability Insurance Plan or the Public Service Management Insurance Plan (PSMIP). Once the 6-month period has been exceeded, eligibility rules will vary by plan depending on whether there is a break in service and for how long.

How to prevent pension and benefits implications

To prevent immediate enrolment to the pension and benefits plans, separate appointment letters (one for each calendar year) must be issued with a minimum break of 7 working days between appointments. This should be done in strict accordance with HR-to-Pay Timeliness requirements. Since the pension and benefits plans have different eligibility criteria, the break of 7 working days will avoid enrolment in all plans.

All questions should be directed to your Departmental Corporate Compensation Official who, if required, will direct their questions accordingly:

• For inquiries related to pensions and benefits: ADMertc-SMArerg@tbs-sct.gc.ca
• For inquiries related to the PSEA, contact your PSC staffing support advisor

Original signed by

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