The Employee Funded Leave Program wound down effective December 31, 2019.
There are no impacts for employees already enrolled in the program, their participation in the Employee Funded Leave plan will continue until they have completed the deferral period, the leave period and the return to work commitment period.
New applications will be accepted provided the approved and signed requests were submitted to the GoA Employee Services and/or PSC. Pension and Benefits branch by December 31, 2019.
This directive describes the Employee Funded Leave Program, including who can apply and who approves the leave, postponing the leave, withdrawing from the program, application of the Collective Agreement, directives, and government regulations during the leave, returning to work, and payroll administration.
The Employee Funded Leave Program lets you finance a leave of absence by deferring part of your salary, which you are then paid during the leave of absence. You may use the leave for any purpose.
You may defer a portion of your salary over a period ranging between 12 months and 6 years (deferral period). Your leave must be 6 to 12 months in length, however, may be as short as 3 months if you are attending school.
Your leave of absence begins as soon as the deferral period is over.
The employer has engaged a financial institute to serve as trustee of each participating employee's deferred salary and to pay the employee's salary during the period that the leave is taken.
The program may be amended from time to time with the approval of the Public Service Commissioner.
Application and approval
If you are an employee who is in a position or on contract, works full-time, and has at least 12 months of continuous service (PDF, 1.1 MB), you may apply. Final approval of individual requests to participate in the program and subsequently to be granted leave rests with the deputy head.
The deputy head may postpone your leave for up to 12 full calendar months if the department determines that a suitable replacement or cover-off cannot be provided (where required) or that your leave would prevent delivery of quality service. You may choose to withdraw from the program if your leave is postponed.
You may request in writing that your leave be postponed for up to 12 calendar months subject to the prior approval of the deputy head.
If your leave is postponed, the deferral period will be extended. Since it cannot be longer than six years, the postponed leave must begin no later than the beginning of the seventh year of the deferral period. You must be paid the total amount of your deferred salary before the end of the seventh year.
The employer will be held harmless of any liability or action arising out of the operation of this program.
Withdrawal from the program
The deputy head may approve your withdrawal from the program due to financial hardship or health reasons before leave begins. The employing department may withdraw you from the program if you move to a different position from the one you held when the deputy head initially approved your participation.
If you withdraw or are withdrawn from the program, resign, or your employment is terminated, you will receive a lump sum equal to the salary deferred, plus interest accrued for that calendar year, less administration charges. You will be repaid as soon as possible, and within 90 days of your withdrawal from the program. In no event will you be repaid later than December 31 of the year following the year of withdrawal.
Once you begin the leave period, you may not withdraw from the program, nor can you be withdrawn from the program.
If you die while participating in the program, money accumulated plus accrued interest at the time of your death, less administration charges, will be paid to your named beneficiary.
Application of the collective agreement, directives, and regulations
The Code of Conduct and Ethics for the Alberta Public Service applies during your leave. Unless otherwise stated in this directive, during the leave period, provisions of the Collective Agreement, directives, or regulations will apply the same as they would if you were on an approved leave of absence without pay.
During your leave, you must not receive any salary or wages from the employer, or any other person or partnership with whom the employer does not deal at arms length, other than the amounts that were deferred and the cost of reasonable employee benefits coverage.
You may purchase service under the Public Service Pension Plan or the Management Employees Pension Plan for the leave period if you are eligible under your plan. You should speak to your Pay and Benefits representative regarding the options available to you.
Returning to work
You must return at the end of the leave for at least the same amount of time you were on the leave for your leave to be treated as an employee funded leave for tax purposes (federal income tax rules). On returning to work, you will be assigned to the same or equivalent position held immediately before your leave began.
In the months preceding the leave of absence (the deferral period), you will receive gross salary reduced by the amount of salary that has been deferred.
The amount deferred will be deducted in installments beginning in the first pay period after your application was approved, and will be deducted for the agreed period. You decide how much of your salary is deducted. However, no more than 33 1/3% and no less than 10% of your gross annual salary may be deducted on a bi-weekly basis within the deferral period. You may periodically change the amount of deferred salary, as long as the revised amount stays within the required percentage range of allowable deferred salary.
All deferred salary will be forwarded to the financial institution the employer has engaged as trustee of the funds. This deferred salary will earn interest to the credit of the participating employees. In accordance with federal income tax rules, interest accumulated to the end of each calendar year is payable annually to each participating employee; it does not become part of the salary payable during the leave period.
During the deferral period, your contributions to the Canada Pension Plan (CPP) and withholdings for income tax are calculated on and deducted from the salary left after the deferred salary amount is deducted. All other premiums or contributions for benefit plans (Employment Insurance, Pension, Group Life Insurance, Extended Medical, Prescription Drugs, Long Term Disability Income, and Dental) are the full salary, with the usual employer/employee cost-sharing application.
The deferred salary is paid to you by the trustee during the leave period and is subject to withholdings for income tax and contributions to CPP. Employment insurance is not deducted during the leave period. You will be treated as an employee on a leave of absence without pay for the purposes of participating in and contributing to the premiums of all other benefit plans.
In order to ensure continued coverage employees are responsible for paying their premium costs when due, including during periods of leave without pay. Failure by the employee to remit premiums will result in termination of benefits for the employee and all enrolled dependents. The employer must provide a minimum of two weeks’ written notice prior to terminating the benefit plan coverage.
The employer retains the right to recover from the employee’s pay any outstanding benefit plan premiums that are in arrears.
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