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.
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.
All permanent employees may apply for participation in the plan.
If an employee makes contributions into the self-funded LOA plan, will it affect their income, benefits, and taxes?
Yes, participation in the self-funded LOA plan may have a significant impact on the employee's income, benefits and personal taxation. It is the employee's responsibility to ensure that he or she reviews their personal financial planning before making a formal application.
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.
The leave period must be at least six (6) consecutive months, but no more than twelve (12) consecutive months, and the leave must begin within six (6) years of the date of the initial salary deferral.
Interest is earned on all contributions from the date deposited into the plan. Deposits made prior to when Guaranteed Investment Certificates 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.
Canada Life will establish a fund made up of Guaranteed Investment Certificates purchased at current market rates.
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: Canada Revenue Agency governs Receipt of Payments, using the principle of "Constructive Receipt" which stipulates 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, seniority, and increment timings)?
These service-related benefits and entitlements will cease during the leave period, in accordance with Administrative Policy HR-LR-003 (Section 1.03).
The administration of the plan resides with Pay Services. For more information, contact HR Support Services at 403-268-5800.
Participants can call Canada Life's Access Line at 1-800-724-3402, Monday to Friday 6:00 a.m. - 6:00 p.m. (MST). Participants can also register online to review their account balances at grsaccess.com.
Applying for a self-funded LOA
Complete a Self-Funded Leave of Absence Application form (P 903). This form can be located online myCity > Tools & Resources > Forms, by contacting the employee's business unit payroll or HR Support Services at 403-268-5800. 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 (Leave of Absence Policy (HR-LR-003), Section One – Conditions for Leave of Absence without Pay) will be applicable to plan participants.
Yes, provisions have been made to name the beneficiaries directly on the Self-Funded Leave of Absence Application form (P 903).
The employee should receive the Self-Funded Leave of Absence Application form (P 903) back within sixty (60) days from the date the application was made.
Prior to taking leave
The Request for Leave of Absence (X 83) form should be completed six (6) months prior to the employee taking their leave. This form can be obtained by contacting the employee's business unit payroll or HR Support Services at 403-268-5800.
Yes, in order to maintain benefit coverage during the leave period, an employee is required to pre-pay the entire employee portion of all required premium in one lump sum prior to the leave period. Note: The City of Calgary will pay the corresponding employer contributions, if any, during this leave period.
Yes, Statements of Participation will be mailed to the employee's home address on a quarterly basis by Canada Life. The statement will provide a summary of the employee’s contributions and investment income.
Yes, by sending the request to PayrollPaymentTransaction@calgary.ca. The request should include the amount to be changed from and to as well as the effective date of the change. The deferred amount can only be changed once a year.
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?
Yes, by sending the request to PayrollPaymentTransaction@calgary.ca. Approval of such request will be at the discretion of the employee’s Manager and Plan Administrator (Leader, Corporate Payroll) in the case of suspension, and the Business Unit Director in case of termination.
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 Business Unit Director approve such a suspension. This suspension of contributions may require a postponement of the leave period. Submit the request to PayrollPaymentTransaction@calgary.ca.
Yes, providing the employee gives written notice to their Manager and Business Unit Director and submit an amended P903 to PayrollPaymentTransaction@calgary.ca at least three (3) months prior to the commencement of the original leave period. Only one request for postponement will be accepted. Approval will depend on operational requirements. Once approved, the postponement date cannot be rescinded. Note: The leave must commence no later than six (6) years following the date of the initial salary deferral.
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. 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 six (6) years.
This request must be sent to PayrollPaymentTransaction@calgary.ca, and include the reason for the request. Approval of the request will be at the discretion of the employee's Manager and Business Unit Director.
Contact the Canada Life's Access Line at 1-800-724-3402, Monday to Friday 6:00 a.m. to 6:00 p.m. (MST).
During the leave
A minimum of two (2) months prior to the leave the employee needs to complete a Canada Life “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.
Compulsory deductions are handled by Canada Life.
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.
The request to return earlier than their original leave period must be forwarded in writing to their respective Manager. Note: Except in special circumstances (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.
During the leave period, all payments from Canada Life will be treated as regular employment income and will be subject to all statutory required employee deductions, including income tax and CPP.
Payment disbursements, either by electronic direct deposit or cheque mailing, will be issued 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.
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 Support Services at 403-268-5800 prior to their leave.
If an employee becomes disabled while on leave, eligibility for Sickness & Accident (S&A) benefit payments will begin on the date the employee is scheduled to return to work from the leave. The period of disability starts on the date the disability occurs. If approved for LTD benefits, the payments will commence on the later of expiration of the S&A benefits or the scheduled return to work date.
After the leave
If an employee has taken a self-funded LOA, 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.
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 Support Services at 403-268-5800.