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Self-funded leave of absence (LOA)

The City of Calgary approved the implementation of a self-funded leave of absence plan in 1991. The plan was approved as an expression of The Corporation's ongoing commitment to its employees by providing opportunities for career development and personal growth.  Prior to applying for a self-funded LOA, you can complete the self-funded LOA checklist.

What is a self-funded leave of absence?

A self-funded leave of absence is designed to allow employees to defer receipt of a portion of their salaries for the purpose of funding an unpaid leave of absence.

Who is eligible for the self-funded leave of absence?

All permanent employees who have a minimum of five (5) years of service, occupy established positions and have completed their probationary periods may apply for participation in the plan.

If an employee makes contributions into the self-funded leave of absence plan, will it affect their income, benefits, and taxes?

Yes, participation in the self-funded leave of absence plan may have significant affect on the employee's income, benefits and taxes. It is the employee's responsibility to ensure that he or she reviews their personal financial planning before making a formal application.

How much money can an employee defer for a self-funded leave of absence?

Employees may defer receipt of up to one third (1/3) of their gross annual salary for a maximum period of six (6) years. The amount contributed may be adjusted once a year by written request to Pay Services, but the length of the contributory period cannot be changed.

How long can an employee take a self-funded leave of absence?

The leave period must be at least six (6) consecutive months, but no more than twelve (12) consecutive months, and must begin within six (6) years of enrolment in the plan.

How is interest earned on an employee's contributions and can it be rolled into the plan?

Interest is earned on all contributions from the date deposited into the plan. Deposits made prior to when Guaranteed Investment Certificates (GICs) are purchased earn daily interest for that period. Accumulated interest earned prior to the start of a leave period must be paid out annually to participants for tax reporting, therefore cannot be rolled into the plan. Note this payment will not be issued until 30 days after yearend, although it must be reported as income in the previous year.

How are the funds invested?

Great West Life will create a fund made up of Guaranteed Investment Certificates (GICs) purchased at current market rates.

When does an employee receive their tax slips?

Tax slips will be mailed directly to an employee's home address by February 28 of each year. Non-resident tax documents will be mailed by March 31 of each year. Note: Revenue Canada governs Receipt of Payments, using the principal of 'Constructive Receipt' which stipulated that payments are received as of month end. Therefore, a payment issued on January 10 is treated for tax purposes as having been received by December 31 of the previous year.

What happens to benefits and entitlements which are service-related (for example, vacations, statutory holiday entitlements, seniority, and increments)?

These service-related benefits and entitlements will cease during the leave period, in accordance with Administrative Policy HR-LR-003 (Section 1.03).

Who is responsible for the administration of the plan?

The administration of the plan resides with Pay Services. For more information, contact the HR Service Centre at 403-268-5800 (Payroll Option).

Where can I get informational and transactional support once I'm in the plan?

All members can contact the Call Access Line at 1-800-724-3402, 24 hours a day and 7 days a week. Members can also access Group Retirement Services for account balance information. Members receive identification and password information in order to access the site.

Making Application

How does an employee apply for a self-funded leave of absence?

Complete a Self-Funded Leave of Absence Application form (P 903). This form can be located online myCity > Tools & Resources > Forms or by contacting the employee's business unit payroll or the HR Service Centre at 403-268-5800 (Payroll Option). Subject to the operational requirements of The City of Calgary, the application must be approved by the Business Unit Director based on the recommendation of the employee's manager. It should be noted that employees are not eligible to apply if it is reasonably anticipated that they will retire prior to the commencement of the leave period. The general conditions of the leave of absence without pay (Section 3204.02 of the Administration Manual) will be applicable to plan participants as will the Code of Ethics guidelines on outside employment.

Does the employee need to name a beneficiary in the event of a death?

Yes, provisions have been made to name the beneficiaries directly on the self-funded leave of absence application form (P 903). 

How will an employee know if their self-funded leave of absence has been approved?

The employee should receive the Self-Funded Leave of Absence Application form (P 903) back within 60 days from the date the application was made. 

Prior to Taking Leave

When does an employee need to complete the request for leave of absence (X83) form?

The request for leave of absence (X 83) form should be completed approximately one to six months prior to the employee taking their leave. This form can be obtained by contacting the employee's business unit payroll or the HR Service Centre at 403-268-5800.

Does an employee need to pre-pay their benefits to The City prior to taking the leave?

Yes, an employee needs to pre-pay their benefits prior to the leave period. Note: The City of Calgary will pay the corresponding employer contributions, if any, during this leave period.

Will an employee receive a Statement of Participation while in the plan?

Yes, Statements of Participation will be mailed to the employee's home address on a quarterly basis.

Can an employee change the deferred amount for a self-funded leave of absence?

Yes, by completing the request in writing and sending it to Pay Services, SFLOA Plan Administrator #8107. The request should include the amount to be changed from and to as well as the effective date of the change.

If an employee goes on long-term disability (LTD), can he or she request that their contributions be suspended or terminated due to extenuating circumstances such as financial hardships?

Yes, providing the request is in writing and sent to Pay Services, SFLOA Plan Administrator #8107.

Can an employee suspend their contributions into the plan?

Yes, an employee may suspend contributions for a period not less than six (6) consecutive months and to a maximum of twelve (12) months providing the employee's manager and director approve such a suspension. This suspension of contributions may require a postponement of the leave period.  Submit the request in writing and send it to Pay Services, SFLOA Plan Administrator #8107.

Can an employee postpone the commencement of their leave period?

Yes, providing the employee gives written notice to their manager and director at least 3 months prior to the commencement of the original leave period. Submit an amended P903 to Pay Services, SFLOA Plan Administrator #8107.  NOTE: The leave must commence no later than 6 years following the date contributions commenced under the plan.

What happens if an employee decides not to take a self-funded leave of absence?

An employee may request receipt of part of or all of the value of the employee's account prior to the expiry of the contribution period due to special extenuating circumstances such as financial hardship. NOTE: The funds must be paid no later than the end of the first taxation year that commences after the end of the deferral period.  The contribution period cannot exceed 6 years.
 
This request must be in writing and include the reason for the request. Approval of the request will be at the discretion of the employee's manager and director. Submit the approved written request to Pay Services, SFLOA Plan Administrator #8107.

If an employee has a change of address, whom should he or she contact?

Contact the Call Access Line at 1-800-724-3402 24 hours a day, 7 days a week or visit Group Retirement Services.

During the Leave

How does an employee receive any money owing while on their leave?

2 months prior to the leave the employee needs to complete a “Request for member withdrawal Deferred Salary Leave Plan” form, which includes the following information:

Type of Payment

The employee may choose one of three types of payments: monthly, one lump sum, or two equal payments. Note that the money will not be received until approximately 3-4 weeks following the start of the leave of absence and there is a $5.00 fee for each withdrawal transaction.

Method of Payment

The method of payment will be made either by cheque or direct deposit.
A copy of the employee's void cheque must accompany the “Request for member withdrawal Deferred Salary Leave Plan” form if he or she is requesting the payment be made via direct deposit. Note: There will be a delay in receiving payment if the employee chooses to be paid by cheque, as it will be mailed.

Who takes the compulsory deductions for the employee's salary, which is being deferred?

Compulsory deductions are handled by Great West Life.

When is an employee's CPP premiums deducted?

The employee's portion of CPP premiums will be deducted from payments received for the duration of the leave period. The CPP premium is set up by Pay Services upon receipt of the employee's benefit payment authorization and direction form.

What happens if an employee decides to return to work earlier than their original leave period?

The request to return earlier than their original leave period must be forwarded in writing to their respective manager. Note: Except in special circumstances such as financial hardship (which is established to the satisfaction of The City, the employee will not be permitted to return from leave before a period of six (6) consecutive months has passed).

Are deductions taken off the employee's pay during the leave?

During the leave period, all payments from Great West Life will be treated as regular employment income and will be subject to all statutory required employee deductions, including income tax and Canada Pension.

When will an employee receive their payments during their leave?

Payment disbursements, either by electronic direct deposit or cheque mailing, will be issues on the tenth business day after month end. This is a fixed payment date given the need to value the plan each month (after month end) to account for contributions, interest, and withdrawals by all participants.

What happens to pension and benefit contributions while an employee is on leave?

No pension contributions will be made during the employee's leave, however, he or she may buy back the leave of absence period after their return to work. Benefit contributions are to be prepaid prior to the commencement of the leave. For further information on other benefits, the employee should contact the HR Service Centre at 403-268-5800 prior to their leave.

After the Leave

If an employee has taken a self-funded leave of absence, does he or she need to work a certain timeframe with The City of Calgary afterwards?

Once the leave is over, the employee must return to City employment for a period of time at least equal to the length of leave.

Can an employee buy back their pension after their leave?

Yes, providing he or she has made commitment with the employer to purchase non-contributory leave without salary taken during the year by April 30 of the following year. If the employee chooses not to purchase the services at that time, it may be purchased as Optional Service at a later date, if the plan includes that provision.
 
For more information, contact the HR Service Centre at 403-268-5800 (Payroll Option).