The Pension Adjustment Calculation Process may be used for generation of the PA amount for the purpose of T4 reporting. This process requires the Pension Adjustment Calculation Profile be completed. This process includes the calculation of the PA for Money Purchase or based on the Benefit Accrual calculation. The total PA amount calculated per employee is prorated to the income tax deduction codes based on the total taxable earnings as defined by the range of history periods selected.
This report includes an option to generate an export file, ######.CSV, where ###### is the job number. The export file is generated where the logical ATRIEVEERP$OPSWRK is defined. The export file is a comma separated file with one record per deduction per employee. The export file containing the following fields:
The Money Purchase export file includes the following fields:
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Employee number
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Employee name
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Employee's pensionable earnings
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Employee's contributions
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Employer contributions
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Employee's Income Tax Code
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Employee's PA amount
The Defined Benefit export file includes the following fields:
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Employee number
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Employee name
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Employee's pensionable earnings
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Employee's Days worked, when applicable
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Employee's FTE
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Annualized Salary
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Accrual up to YMPE
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Accrual over YMPE
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Employee's Total Accrual reduced by FTE
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Income Tax Code or Annual Service for Manitoba Days
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Employee's PA amount
Money Purchase Calculation:
This is the total employee contribution and total employer contribution for selected pension deduction codes, for the range of pay periods selected. The PA amount is rounded to the nearest dollar. The total PA amount is prorated to the employee's income tax deductions based on the total eligible earnings per income tax code for the range of history periods selected.
Defined Benefit Calculation:
The following elements of the calculation are taken from the PA Profile, the TEACHING DAYS may be overridden by the ANNUAL HOURS/DAYS from the Employee Type Code database.
CURRENT YMPE (eg: 52500.00)
PA OFFSET AMOUNT (eg: 600.00)
MAXIMUM BENEFIT ACCRUAL (eg: 2766.67)
PA LIMIT AMOUNT (eg: 24330.00)
ACCRUAL TO YMPE PERCENTAGE (eg: .014)
ACCRUAL OVER YMPE PERCENTAGE (eg: .02)
TEACHING DAYS FOR TAX YEAR (eg: 195.00)
MULTI-EMPLOYER PLANS default is No
ALBERTA PENSION SERVICE BASED PA default is No
PA = (9 * benefit entitlement) - PA_OFFSET
PA = (9 * benefit entitlement) - (PA_OFFSET * FTE) when multi-employer plan
PA = PA + AVC {additional voluntary contributions}
PA = PA_LIMIT when PA is greater than PA_LIMIT
PA is rounded to nearest whole dollar
The PA formula is the same formula per province with the only difference being in the determination of FTE. The FTE may be based on pension credits or Days Worked and is different per province. On Non-Teaching payrolls the FTE is the accumulated pension credits from the employee's history records for the range of pay periods selected.
PA Formula:
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Determine Annual Salary at 100% FTE. Employee's Pensionable Salary divided by FTE.
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When Annual Salary is greater than YMPE
(.014 * YMPE) + (.02 * (Annual salary – YMPE)) = Accrual -
When Annual Salary is less than or equal to YMPE
(.014 * Annual Salary) = Accrual -
Accrual * FTE = BE
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BE is capped by Maximum Benefit Accrual
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When not a Multi-Employer Plan
(9 * BE) – 600.00 = PA -
When Multi-Employer Plan
(9 * BE) – (600.00 * FTE) = PA
Example:
FTE = .65
Pension Eligible = 45,668.00
Annualized Salary = 45,668.00 divided by .65
Annualized Salary = 70,258.46
When Annualized Salary is greater than YMPE (52500.00)***
Accrual = (.014 * 52500.00) + (.02 * (70258.46 - 52500.00))
Accrual = (.014 * 52500.00) + (.02 * 17758.46)
Accrual = 735.00 + 355.17
Accrual = 1090.17
BE = Accrual * FTE
BE = 10190.17 * .65
BE = 708.61
BE = becomes 2766.67 when BE (708.61) is greater than 2766.67
BE = 708.61
When Single employer:
PA = (9 * BE) - 600.00 {PA OFFSET
PA = (9 * 708.61) - 600.00
PA = 5777.49
PA = 5777.00 round to nearest whole dollar
When Multi-employer:
PA = (9 * BE) - (600.00 * FTE)
PA = (9 * 708.61) - (600.00 * .65)
PA = 5987.49
PA = 5987.00
Where Teacher's FTE is:
FTE = Days Worked divided by Teaching Days in Year
For Alberta Teacher FTE by days worked, Days worked per pay period is taken from the Days Storage bank. Clearing entries are omitted; the DAYS accumulation only picks up Increments, Accruals and Adjustments storage bank entries. Each Days bank value per pay period is divided by the Working days from the payroll calendar for that pay period to generate an FTE per pay period. The FTE calculation for Alberta teachers is done on a pay period basis to account for fluctuations in working hours throughout the calendar year. All per pay period FTEs are totaled for the employee's Annual FTE.
Per Pay Period Days in TRF Storage Bank = FTE per pay period
Per Pay Period Days in Payroll Calendar
For Alberta Teacher Pension Service based. The PSP (pensionable salary paid) and FT-MRS (Full time monthly rate of salary) is taken from the employee's TRF Maintenance data per pay period. The Pension Service per pay period is calculated by the formula PSP / (FT-MRS * 12). The total of all Pension Service values defines the Annual Pension Service to be used in the PA calculation.
b) For Manitoba payrolls, the process uses the Actual Service as FTE and the Annualized Service in the calculation of Annualized Salary. 04= WORKING DAYS IN SCHOOL YEAR is divided by the number of periods in the pay cycle (10 is bumped to 12) to determine the regular average days per pay period.
Per period, the total CONTRACTUAL SALARY Days are converted to Actual Working days by multiplying the Calendar Working days times the employees' pay period regular average days. The full working days are created by adding the ADJUSTMENT DAYS PAID PAY CODES days (already actual days). This total is reported as DAYS on the report.
Per period, the full working days are divided by the TEACH_DAYS (# of teaching days in the year), as defined in the PA profile. The total of these percentages for all pay periods defines the employees' Actual Service. The Actual Service is used as the FTE in the PA formula and reported as Actual Service on the report.
Note: The Working Days per payroll calendar may be overridden by the Alternate Days per calendar when applicable and the TRAF profile Teaching Days per year may be override by the ANNUAL HOURS/DAYS from the Employee Type code.
The Annualized Service is calculated by dividing the full working days per period by the TEACH_DAYS and this amount is then divided by the employees working FTE for the pay period. The Annualized Service is used to convert the employees' Eligible Earnings to Annualized Earnings.
The benefit entitlement is determined by:
PEN_ELIGIBLE = Accumulated eligible earnings for pension deduction codes selected for range of pay periods selected.
ANNUALIZED_SAL = PEN_ELIGIBLE divided by Annualized Service.
Manitoba Example:
Period 1 – Pay code 20.00 days 18 working days @ 100% 18.00 Eligible 5408.36
Period 2 – Pay code 20.00 days 19 working days @ 100% 19.00 Eligible 5408.36
Period 3 – Pay code 20.00 days 19 working days @ 100% 19.00 Eligible 8026.80
Pay Code 08 -10.75 days -10.75
Totals @ 100% FTE 45.25 18843.54
Period 09 – Pay code 10.00 days 19 working days @ 50% 9.50 Eligible 5402.90
Period 10 – Pay code 7.50 days 20 working days @ 50% 10.00 Eligible 5402.94
Pay code 30 = 2.50
Period 11 – Pay code 9.50 days 21 working days @ 50% 10.50 Eligible 5402.90
Pay code 30 = .50
Period 12 – Pay code 10.00 days 16 working days @ 50% 8.00 Eligible 5402.90
Totals @ 50% FTE 38.00 10805.80
Pay code 01 and 30 are Contractual Salary Pay codes – are converted to actual days. Pay code 08 is an Adjustment pay code. The Teaching days of 194 are taken from the PA Profile.
Period 1 – 100% FTE 18.00 / 194 = .09278 % of Service
Period 2 – 100% FTE 19.00 / 194 = .09794
Period 3 – 100% FTE 8.25 / 194 = .04253
Total .23325 (same as 45.25/194)
Period 09 – 50% FTE 9.50 / 194 = .04897
Period 10 - 50% FTE 10.00 / 194 = .05155
Period 11 – 50% FTE 10.50 / 194 = .05412
Period 12 – 50% FTE 8.00 / 194 = .04124
Total .19588 (same as 38/194)
The Annualized Earnings would be calculated as:
18843.54 / 100% FTE = 18843.54 Annualized Service is .233 / 100% FTE .233
10805.80 / 50% FTE = 21611.60 Annualized Service is .196 / 50% FTE .392
Total 40455.14 .429 .625
Total Annualized Salary is generated by dividing the eligible earnings by the total annualized % of service 40455.14 / .625 = 64728.22.
For Saskatchewan payrolls, it is taken from the accumulated days of salary pay codes. Applicable salary pay codes are taken from field Contract Salary Pay Codes, from the Saskatchewan Teacher Profile.
For Ontario Teacher FTE by days worked, Days worked per pay period is taken from the Days Storage bank. Clearing entries are omitted; the DAYS accumulation only picks up Increments, Accruals and Adjustments storage bank entries. Each Days bank value per pay period is divided by the Working days from the payroll calendar for that pay period to generate an FTE per pay period. The FTE calculation for Ontario teachers is done on a pay period basis to account for fluctuations in working hours throughout the calendar year. All per pay period FTEs are totaled for the employee's Annual FTE.
Per Pay Period Days in TPP Storage Bank = FTE per pay period
Per Pay Period Days in Payroll Calendar
*** For Ontario Teacher payrolls where the Pension deduction is defined as a TPP deduction on per the Ontario Teachers Pension Profile, those employees that are CPP Exempt will have their full Annualized Salary calculated with the Over YMPE rate. The CPP Effective date will be applied based on the pay period ending date of the Ending Pay period reported.
The benefit entitlement is determined by:
PEN_ELIGIBLE = Accumulated eligible earnings for pension deduction codes selected for range of pay periods selected.
ANNUALIZED_SAL = PEN_ELIGIBLE divided by FTE
This process includes the option to maintain multiple sets of stored prompts.
Name the prompt sets by defining a title up to 10 characters, with a 30-character description.
On the first prompt click the Report Defaults icon to select an existing set of prompt values. You can delete prompt sets or change the description from the Report Default icon.
PA For Defined Benefit or Money Purchase
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Enter 'B' when the calculation of the PA amount should be done based on the defined benefit calculation.
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Enter 'P' with the PA amount should be based on a money purchase definition.
Enter Pension Deduction Codes
Enter up to 15 pension deduction codes to be included in the PA calculation. Deduction codes entered must be a Group 1 deduction.
Click on the clear report default button to clear the values in the field.
Enter Additional Optional Pension Deductions
Enter up to 6 additional voluntary contribution (AVC) pension deduction codes. The employee's contribution amounts from these deductions will be added directly to the calculated PA amount just before the PA is limited. The full PA is then reported on the T4. Deduction codes entered must be a Group 1 deduction.
Click on the clear report default button to clear the values in the field.
When defined by 'B'enefit was selected:
Enter Additional Pension Pay Codes
Enter up to 15 pay codes for earnings to be included in the pension eligible amount for the purpose of the PA calculation.
Only include earnings that are not already part of the pension eligible earnings. Additional pay codes amounts will be added to the pension eligible amount for the PA calculation.
Enter Income Tax Deduction Codes
Enter up to six income tax deduction codes. Deduction codes entered must be a Group 6, 7 or 8 and Type 2.
Click on the clear report default button to clear the values in the field.
Enter Starting Pay Period
Enter the first pay period for the taxation year.
Enter Ending Pay Period
Enter the last pay period for the taxation year. The PA records are generated under the year as defined by this pay period value.
When defined by 'B'enefit Was Selected:
Pension Service Credits or Days Worked
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Enter 'P' to determine the employee's FTE based on accumulated pension credits.
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Enter 'D' when the employee's history is to be based on days worked. This option should only apply to Teachers.
When 'D'ays Worked Was Select On An Alberta payroll:
Enter Storage Banks for Days Worked
Enter one or more DAYS storage banks. The accumulated history entries under this storage bank will determine the employee's days worked.
Click on the clear report default button to clear the values in the field.
Report All or Selected Employees
Sort by Employee Number Or Employee Name
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Enter 'E' to have the report generated in employee number sequence.
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Enter 'N' to have the report generated in employee name sequence.
Report Only or Process Employees
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Enter 'R' to generate a report only.
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Enter 'P' to generate the report as well as generate the PA entries.
When this process is run multiple times the employee's PA amount per income tax deduction will be refreshed with the new PA amount.
Include Generation of CSV Export File
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Enter 'N' to omit the generation of the export file.
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Enter 'Y' to include the generation of the export file.
The report will list the following for Money Purchases:
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Employee number and name
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Accumulated pensionable earnings
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Accumulated employee contributions
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Accumulated employer contributions
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PA amount rounded to nearest whole dollar, per income tax deduction code
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A summary of PA amounts per income tax deduction.
The report will list the following for Defined Benefit accruals:
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Employee number and name
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Accumulated pensionable earnings
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Days worked, when applicable
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Employee's FTE
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Annualized Salary
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Accrual up to YMPE
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Accrual over YMPE
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Total Accrual reduced by FTE
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PA amount rounded to nearest whole dollar, per income tax deduction code
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PA Profile settings
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A summary of PA amounts per income tax deduction.
Note: If a ** is printed after the PA amount on the report, this means this process has capped the employee's FTE at 100% and has flagged it for review.