Leave without pay information package: Royal Canadian Mounted Police pension

This package provides you with important information needed when considering taking a leave of absence from the Royal Canadian Mounted Police (RCMP) and explains the pension implications of taking a period of Leave without pay (LWOP) and the processes involved.

Your employer may authorize pensionable LWOP for various reasons. To determine what types of LWOP may be available to you, you can refer to the list of the various types of LWOP under Types of leave without pay and contribution rates at the end of this document. If you wish to proceed on LWOP, you should then discuss the approval process with your commanding officer. In addition, we suggest that you notify your compensation advisor of your intention of leaving, in advance of proceeding on LWOP, to avoid any overpayment situations. To update your LWOP records, you should also contact your compensation advisor if you are on LWOP and are then approved for a new type of LWOP.

Information regarding the impact LWOP has on your pay and benefits can be obtained from your compensation advisor.

Contact the Government of Canada Pension Centre for any information regarding the effect LWOP has on your pension.

Things to consider when taking a period of leave without pay

Explore these sections to learn more about the impact LWOP has on your pension:

The administrative process

Once you have decided that you wish to proceed on LWOP, you must seek approval from your commanding officer. Your compensation advisor must then be notified that you will be leaving. It is preferable to inform your compensation advisor in advance to avoid overpayment situations.

Once you have reviewed the information in this package and decide to take a leave of absence, you may consult the Government of Canada Pension Centre for any additional information regarding the impact LWOP has on your pension:

Pensionable leave without pay

The RCMP Pension Plan allows you to earn pension credits during periods of employer-approved LWOP, allowing you to maintain the full value of your pension. Certain types of LWOP, however, cannot be considered pensionable such as suspension and unauthorized leave of absences.

Please note that there is a limit on the number of years you can count as pensionable LWOP service under the RCMP Pension Plan. For more information, refer to the Tax implications surrounding a period of leave without pay section in this document.

If you have not already reached the pensionable LWOP limit, the first three months of any employer-approved LWOP is pensionable, meaning that the period of service counts in the calculation of your RCMP pension. After the first three months, you have the option to count or not to count your LWOP period as pensionable.

Choosing to count your leave without pay as pensionable service

If you do not sign an option not to count your LWOP within the prescribed time, you are deemed to have chosen to count your period of LWOP beyond the first three months as pensionable service. You will therefore owe pension contributions for your entire period of LWOP.

Pension contributions owing for a period of LWOP are based on deemed salaries (salaries you would have received had you not been on LWOP). These include pay revisions (including retroactive revisions) that may become due after the commencement of your LWOP.

Choosing not to count your leave without pay as pensionable service

As indicated above, the first three months of your LWOP period are always counted as pensionable service. If you choose not to count your period of LWOP in excess of the first three months as pensionable service, you have to complete the ( RCMP- GRC 2480E - Election not to count leave without pay as pensionable service) form. You have to forward the completed form to the Government of Canada Pension Centre no later than three months following your return to work (in case of discharge following a period of LWOP, no later than the discharge date). Once your election has been made, your LWOP in excess of the first three months will not be counted as pensionable service and accordingly, you will not be required to pay pension contributions for the period of LWOP other than for the first three months.

It should be noted that an option not to count LWOP as pensionable service cannot be made after an employee has terminated employment. The option has to be made while the employee is still actively at work or on LWOP. If you discharge following your LWOP period, your form must be completed and forwarded prior to or on your discharge date.

As well, the option not to count can only be made for the full period of LWOP in excess of the first three months. You cannot choose to count only a portion of the period of LWOP in excess of the first three months as pensionable service and the remaining balance as non-pensionable service.

Please inform your compensation advisor if you are actively employed in the public service while on LWOP from the RCMP. If you are in this situation, you are exempt from contributing to the Public Service Pension Plan and you should inform your compensation advisor.

Remember, if you do not exercise your option within three months following your return to work, you will be deemed to have chosen to count the period in excess of the first three months as pensionable service and contributions will be required for your entire period of LWOP.

An election not to count a LWOP period is irrevocable. You cannot later count that period of service unless you sign an Election for prior service and/or Surrender of benefits under the Canadian Forces Superannuation Act or the Public Service Superannuation Act service buyback form ( RCMP- GRC A-2-2E) to count the service as pensionable under the RCMP Pension Plan. Contributions, however, would be based on your salary at the date of signing the service buyback form and a medical examination would need to be undergone and passed. This option would be more costly since interest is charged on service buybacks. More information is available in the Service buyback package or from the Government of Canada Pension Centre.

Payment options for pensionable leave without pay contributions

Generally, you are not required to pay your LWOP pension contributions prior to, or during your period of leave. However, payments will be required upon your return to work. At that time, you will receive a letter from the Pension Centre outlining the amount owing and the deadline by which contributions have to be paid. The following payment options are available to you:

Lump sum payment: (within 30 days of return to work)

Salary or pension deductions

If you wish, you may pay your LWOP pension contributions during your period of LWOP. Contact the Government of Canada Pension Centre for more information.

Tax implications surrounding a period of leave without pay

Income tax limit

The Income Tax Act places certain limits on the maximum period of LWOP which can be counted as pensionable service under a Registered Pension Plan. The maximum LWOP permitted is five cumulative years of LWOP (excluding certain types of LWOP), plus up to three years of child care leave, for a total of eight years of LWOP. The child care leave is limited to a maximum of one year per child which must be taken within one year of the date of birth or adoption of each child. For part-time employees, the period of part-time LWOP must be converted to a full-time equivalent LWOP period when calculating the maximum period of pensionable LWOP.

Once you have reached the Income Tax Act limit, you may still proceed on LWOP, however, all additional periods of LWOP are non-pensionable and no pension contributions will be required beyond the pensionable LWOP limit. The Pension Centre will notify plan members in writing when they reach the Income Tax Act limit.

Pension adjustment

A pension adjustment is a plan member's total pension credits, that is, the value of the plan member's pension for a given year, and is used by the Canada Revenue Agency (CRA) to determine the amount that you can deposit tax free to a Registered Retirement Savings Plan (RRSP) each year. The pension adjustment reduces the maximum amount that an individual can deduct for (RRSP) contributions for the next year. The annual Notice of Assessment issued by CRA indicates your available RRSP room for the year.

A pension adjustment is calculated and reported to CRA for all pensionable LWOP periods. Depending on when you make your choice not to count your period of LWOP beyond the first three months as pensionable service, a pension adjustment may be reported for your non-pensionable LWOP periods. It is therefore important that, if you intend not to count your LWOP, you sign your option not to count your LWOP at the time you proceed on LWOP to avoid any pension adjustments being reported for that service. CRA does not allow the reversal or amendment of any pension adjustment reported in a LWOP situation.

A pension adjustment will not be reported to CRA for LWOP periods that occur after the plan member has exceeded the maximum tax limit for pensionable LWOP.

Making service buyback payments while on leave without pay

Unlike current pension contributions, payments for a service buyback must be made on an ongoing basis during a period of LWOP. If you fail to make the monthly service buyback payments, those payments will be in default and additional interest will be charged.

Your monthly payments should be made payable to the Receiver General for Canada. Please send your payment, together with a ( RCMP- GRC 570E - ), to the Government of Canada Pension Centre at the address indicated on the form.

Note

When sending a lump sum payment you must provide details on the payment by stating if it is for pension contributions or a service buyback payment.

Types of leave without pay and contribution rates

The following chart illustrates the pension contribution rates applicable to various types of pensionable LWOP.

Note that certain types of LWOP are not pensionable (not listed in the chart) and contributions will not be required. The pension contributions can either be calculated at a single or doubleFootnote * rate. Where the rate is single, you will be required to pay your share of contributions only, that is, the contributions that you would have paid had you not been on LWOP. Where the rate is double, you will have to pay both your share and the employer's share of contributions.

Contributions for the first three months of LWOP are calculated at single rate. The rate of contributions for the period exceeding the first three months is based on the type of LWOP.

Please note that the rates of contributions for the first three months of LWOP as indicated in the chart below may not apply in certain situations where multiple continuous periods or types of LWOP are taken.

Table summary

The Table below outlines the types of leave without pay and the rates of contribution.

Type of LWOP Rates of contributions
First three months After first three months
Care and nurturing of pre-school aged children after 52 weeks of child's date of birth or adoption Single DoubleFootnote *
Care and nurturing of pre-school aged children up to 52 weeks of child's date of birth or adoption Single Single
Education Single Single
Maternity leave Single Single
Parental LWOP (within 52 weeks of birth or adoption) Single Single
Personal needs Single DoubleFootnote *
Self-funded leave Single DoubleFootnote *
Special leave Single DoubleFootnote *
Spousal relocation Single DoubleFootnote *

Required documents

A copy of your child's Birth/Baptismal Certificate or Adoption Certificate should be provided to the Government of Canada Pension Centre for the following types of LWOP:

Please contact the Government of Canada Pension Centre if you have any questions regarding the required documents.

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