Family Medical Leave and PSPP Pension Credit

What's on this page:

    No. 89

    Effective June 2004

    The OPB has updated its leave of absence forms to reflect the Family Medical Leave introduced by the Ontario government in June 2004. Administratively - other than these form modifications - everything remains the same, and FMLs are processed like any leave of absence (LOA) without pay.

    Background

    The new legislation entitles employees to take up to eight weeks of unpaid, job-protected leave. Family Medical Leave (FML) allows an employee to take time off work to provide care to a terminally ill family member.1 A maximum of eight weeks or less must be taken within this specified 26-week period.

    Family Medical Leave and contributions towards pension credit

    Like a parental or maternity leave, the employee's membership in the Plan continues while on FML - just as if they had stayed at work, and they can continue to build credit throughout the leave. As the employer, you play a vital role in helping to ensure these leaves are properly processed in accordance with both Plan contribution rules, as well as those set out in provincial employment law. To recap, there are two main rules governing contributions during an LOA without pay.

    1. If a leave is approved by the employer for a period of one month or less, the employee and the employer must continue to make contributions to the Plan.
    2. If a leave is approved for a period of more than one month, the employee and the employer must continue to make contributions to the Plan unless the employee elects not to make contributions (See the OPB form 1025 on Page 2 for more information.)

    The importance of making an election before the leave starts

    For an FML of more than one month, the member must make an election to contribute or not before the leave starts. Otherwise, they must continue to make contributions during the leave. This is a requirement under employment standards law.

    Payment rules There is no change to procedures with respect to the costing of contributions nor to payment options:

    1. If the employee elects to contribute during the leave, the payment rules for unpaid leaves of absence would automatically apply. For more information on these rules, see New procedures for contributing during a Leave of Absence on the OPB Web site under 'Employer Bulletins.'
    2. If the employee elects not to make contributions during the leave, they would not earn pension credit for that period. Once they return to work, they may be able to buyback the `lost' credit (strict eligibility requirements and deadlines apply). Their contribution rate would be based on the annual rate of salary on the date the written application for the buyback is received. Refer to Understanding Your Pension Credit for more information. On the employer side, matching contributions would be made.

    How and when payment is required

    Since FMLs cannot be greater than eight weeks, they all fall under the PSPP payment category, 'less than three months.' This means that for all FMLs, one lump-sum payment is required at the end of the leave. (See Leaves of Absence without Pay for more detail.)

    Updated forms, procedures and systems

    The processing of FMLs is the same as the processing of other leaves without pay, except for updates to the following OPB forms:

    Processing of an FML is the same as any other LOA without pay. OPB 1025 - Leave of Absence without Pay (for more than one month)

    This form has been updated to include FML in the `type of leave' section. This is the form in which the employee declares whether or not they want to contribute during the leave. Once you have granted the employee an FML of more than one month, you would forward this form - completed and signed by the employee, to the OPB before the leave begins. OPB 1027 - Contribution Calculation for Leaves of Absence without Pay

    If the leave is more than one month and the employee opts to continue to make contributions, you would also complete Form 1027. The form has also been updated to include FML in the `type of leave' section. OPB 1037 - Official Receipt for Lump Sum payment

    For income tax purposes, FML is being added as an LOA with employer-matched contributions.

    As usual, we rely on you - once you have approved a leave, to process and submit the relevant information and forms by the established deadlines, so we are able to efficiently service the employee on the pension side. This includes any supporting documentation (i.e. a medical certificate) which would be requested by the employer (the Board does not require a copy.)

    For more information about FML and pension contributions, refer to the newly updated bulletin, Leaves of Absence without Pay (OPB 8006) on our Web site under `Publications.' Note that members have been notified about how taking an FML can impact their pension credit in the Spring 2005 issue of the OPB News (Page 7).

    The Family Medical Leave legislation strictly defines the family members for whom this type of Leave may be taken. For complete details, refer to the Ontario Ministry of Labour Web site at www.labour.gov.on.ca.