Severance Pay Liability - Pension Plan Contribution rate
To: DCFOs
The purpose of this note is to:
- Provide guidance to departments on the calculation of the severance pay liability for eligible employees for inclusion in departmental financial statements;
- Communicate the Government contribution rate for the public service pension plan for disclosure in departmental financial statements
Severance Pay Liability
The attached document provides additional information on how to calculate the severance liability and expense relating to severance for Public Service employees, coding for the accounting transactions and the financial statement disclosure requirements. Note that this liability was devolved to departments in 2005-06.
Departments should strive to record this adjustment in P12-1.
Pension Benefits - Government contribution rate by employees for the Public Service Pension Plan
Both the employees and the department contribute to the cost of the Plan. The 2009-10 expense represents approximately 1.9 times (2.0 times for 2008-09) the contributions by employees. This rate is for disclosure in the relevant note of your departmental financial statements.
Should you have any questions related to the calculations for the severance pay liability or the contribution rate, please contact Michael Hammond at (613) 952-5460 or michael.hammond@tbs-sct.gc.ca. Questions related to presentation of these items in the departmental financial statements should be directed to Hamid Haffaf at (613) 957-9676 or hamid.haffaf@tbs-sct.gc.ca.
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