Effective Date: 2013-04-09
Review Date: 2017-05-01
The Vice President (Administration and Finance)
To enable an employee to defer a portion of salary to be received during a leave of absence for educational or other personal purposes.
Permanent employees who have completed the prescribed probationary period.
Unit Head: For the purposes of this policy, Unit Head is the term used to mean Deans, Department Heads, Division Heads, Heads of Schools, Directors, Executive Directors, the University Librarian, the University Registrar, Associate Vice-Presidents and Vice-Presidents, as applicable.
The Deferred Salary Leave Plan (the Plan) is provided within the conditions of the Income Tax Act to enable an employee to defer a portion of salary for up to six (6) years to be received thereafter during a leave of absence period for educational or other personal purposes. The leave of absence shall normally be for a minimum period of six (6) months up to a maximum of one (1) year but may be for a three (3) month period or more for full-time attendance at a designated educational institution.
An employee who wishes to participate in the Plan must make written application to the Director of Human Resources through the employee's Unit Head by January 31 in any year. If approved for participation, the employee will complete a contract of participation and deductions will commence the first payroll following April 1 of that year.
DEDUCTION AND LEAVE OF ABSENCE PAYMENT
a) A participant in the Plan shall have deducted a minimum of ten percent (10%) up to a maximum of thirty-three and one-third percent (33 1/3%) of the employee's annual salary before taxes. The percentage deducted may be altered only on April 1 of each year.
b) During each year of enrolment in the Plan, the employee shall receive the employee's annual salary less the percentage elected for annual deferral. The amount elected for deferral shall be deducted from salary and transferred on a bi-weekly basis to Financial and Administrative Services for deposit. The fund shall receive the same interest rate as other trust funds of Memorial.
c) During the period of the leave of absence the employee shall receive on a bi-weekly basis an amount from the fund up to but not greater than the salary that the employee would have received if he/she were working. Within this limitation, the funds shall be equally disbursed during the period of the leave until the employee's contribution to the fund and accumulated interest is depleted.
d) While an employee is enrolled in the Plan and not on leave, any benefits tied to salary level shall be structured accordingly to the salary the employee would have received had the employee not been enrolled in the Plan.
e) While on leave, any benefits tied to salary level shall be structured according to the salary the employee would have received in the year prior to taking the leave had the employee not been enrolled in the Plan.
f) All statutory, group insurance, and pension plan contributions will continue on the regular cost-shared basis between the employee and the employer.
g) Notwithstanding any other provision of this Plan, all statutory deductions shall be in accordance with Revenue Canada rulings and all pension plan contributions shall be in accordance with the Memorial University Pensions Act.
h) Each year, a Deferred Salary Leave Committee, consisting of an equal number of Memorial and CUPE representatives, shall meet and review the amount of deferred salary together with accumulated interest. Each participant in the Plan shall receive an annual statement of the funds deposited and accumulated interest.
a) Upon return from leave, the employee shall be given the same position or a comparable position unless it is mutually agreed between the employee and the employee's department that the employee return to a particular position.
b) Leave under this Plan shall be credited as service for purposes of:
ii. Step Progression
iv. Severance Pay
Vacation shall not accrue during the period of the deferred salary leave.
c) In the event that a suitable replacement cannot be found for an employee due to receive a leave, Memorial may defer the leave for up to one (1) year. In this instance, the employee may choose to remain in the Plan or the employee may withdraw and receive any monies and interest accumulated to the date of withdrawal.
d) Pension contributions shall be paid on the salary the employee would have received had the employee not entered the Plan or gone on leave. These payments will be made during each year of enrolment including the period of leave and will be the normal contribution rate as required under the Memorial University Pensions Act.
e) In accordance with Revenue Canada requirements, all employees who receive a leave of absence in accordance with this Plan guarantee that they will return to employment with Memorial for a period of time that is not less than the period of the leave of absence.
f) All employees wishing to participate in the Plan shall be required to sign a Contract of Participation before final approval for participation will be granted.
g) Employees will continue their normal payment of Union dues during each year of enrolment including the period of leave.
a) An employee may withdraw from the Plan, at any time for any reason, and receive all monies deferred to the fund plus accumulated interest. An employee must withdraw upon resignation of employment.
b) An employee whose employment is terminated in accordance with Article 14 or 22, or who is laid off in accordance with Article 19, will be paid out all monies deferred plus accumulated interest.
c) Should an employee die while participating in the Plan, any monies deferred to the fund plus accumulated interest will be paid to the employee's estate.
d) An employee who withdraws from the Plan is required to wait a minimum of twelve (12) months before applying again.
e) Payment to the employee shall be made within sixty (60) days of withdrawal from the Plan. Income tax will be payable on the amount withdrawn.
CHANGES TO AN APPLICATION
Changes to an application may be made from time to time subject to mutual agreement between the parties.