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HomeMy WebLinkAboutCOD-035-09• Leading the Way REPORT CORPORATE SERVICES DEPARTMENT Meeting: GENERAL PURPOSE AND ADMINISTRATION COIMMITTEE C Q /', Date: June 15, 2009 ~e501~~#`1~n ~rrl ~~ Report #: COD-035-09 File # By-law # Subject: Reservist Leave: OMERS and Benefit Coverage for Full-time Employees Serving Active Duty in the Military Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. THAT Report COD-035-09 be received; 2. THAT Full-time employees serving active duty in the Canadian military on a reservist leave may request in writing that the Municipality pay the employer's portion of OMERS contributions matching the employee contribution when purchasing all or part of the period of active duty; THAT the benefit not be available for Temporary employees, Full-time employees who have not passed their probationary period, employees on Long Term Disability, or employees who are not in-good standing, with the Municipality of Clarington; 4. THAT all eligible Full-time employees who have passed their probation period and are serving active duty in the military on a reservist leave upon providing proof that benefit coverage is not provided by the military, or the Provincial or Federal Health Plan be allowed to continue on the Municipal health and dental plans, Accidental Death and Dismemberment and Life Insurance (excludes Long Term Disability and Short Term Disability) if they purchase the benefit premiums for the estimated leave period; REPORT NO.: COD-035A9 PAGE 2 THAT the offer does not apply to leaves of absence for training or other non deployment leaves; and 6. THAT the above be incorporated into Corporate Policy. Submitted by: Marie Marano, H.B.Sc., A.M.C.T, Director of Corporate Services Reviewed I ti ~'v rt_ by: Franklin Wu, Chief Administrative Officer MM/jf/Iw/gj REPORT NO.: COD-035-09 PAGE 3 BACKGROUND 1.0 City of Oshawa report FA-09-04, Oshawa Council approved benefit coverage for employees on active military duty on a reservist leave and recommended the cost sharing of OMERS pension contributions for the same employees (copy of Oshawa report as attachment #1). 2.0 Municipality of Clarington Council may wish to consider a similar offer to pay the employers portion of the OMERS contribution for eligible Clarington full-time employees. It would be available upon request in writing by employees who have passed their probation period and who have been deployed to serve active duty in the military on a reservist leave and decide to purchase the broken service period when active duty was seared. A typical active duty in the military on reservist leave is 12 to 24 months; therefore the cost for a typical leave per employee could range from $7,000 to $14,000. The employee would be advised of the statutory deductions applicable to this payment, which would include Canada Pension contributions, Employment Insurance premiums and federal and provincial income tax. 3.0 Benefits It is expected that benefit coverage during this period would be provided by the military and the Provincial or Federal Health Plan when active duty is being served. However, if the employee provides proof that benefit coverage is not provided to them by any source, it is recommended that their benefits be continued at the employee's cost for the premium, during the leave period. The employee would be required to provide post-dated monthly cheques for payment to cover the monthly benefit premium while serving active duty in the military on a reservist leave. Employee eligibility for these benefits will be dependent upon the length of leave and the type of activities performed on the leave and is subject to the approval of the benefit carrier. Dependents of employees' with family coverage will maintain their existing coverage if benefits are purchased. Employees will be excluded from participating in the Short Term and Long Term Disability plans. In accordance with the Master Contract for benefits, Long term disability coverage is only provided to active working employees and would not be extended for active duty in the military on reservist leaves. 4.0 Employment Standards Act Obligations The employee on a reservist leave is entitled to be reinstated to the same position if it still exists or to a comparable position if it no longer exists, upon their return REPORT NO.: COD-035-09 PAGE 4 from deployment. The employee would continue to accrue seniority and length of service credit during the leave but the employer is not required to continue any benefit plans during the leave. The Municipality has the right to postpone the employee's reinstatement for two weeks after the day on which the leave ends or one pay period, whichever is later, but would be required to pay for any benefit premiums for the period the return date is postponed. 5.0 Recommendation It is recommended that a policy be prepared and circulated to be included with the Municipal Administrative and Corporate Policy Manual. The Reservist Leave is governed by the Employment Standards Act and should any regulations be updated the policy will be reviewed and updated accordingly. ATTACHMENT #1 ^w~Oshawa Report ro: Finance and Administration Committee Item: FA- 09-04 Date of Report: January 15, 2009 From: Rick Stockman, Commissioner F;le: Date of Meeting: Corporate Services Department A~300 January 22, 2009 Subject: Wards}: All OMERS Coverage and Benefits for Staff Serving in the Military Public Meeting 1.0 PURPOSE The purpose of this report is to provide information on the benefit coverage employees receive while on military duty and recommend the cost sharing of OMERS pension contributions for employees who serve on active duty in the military. 2.0 RECOMMENDATION That the Finance and Administration Committee recommends to City Council: 1. That any employee on military reservist leave be reimbursed the "employer portion" of the OMERS contributions if the employee chooses to buy back broken service time while on "reservist leave" as outlined in Report FA-09-04 dated January 15, 2009. 2. That further to the above, employees who are on reservist leave be reimbursed their benefit cost in the Public Service Health Care Plan as outlined in Report FA- 09-04 dated January 15, 2609. 3. That the practice of reimbursing the employer portion of OMERS contributions and benefits costs for employees who are on reservist. leave be incorporated into a Human Resources Administraticn Manual Policy. 3.0 EXECUTIVE SUMMARY The Finance and Administration Committee directed fha# a policy be developed to pay the City's share of OMERS contributions should an employee choose to buy back his/her eligible service upon return to work from reservist duties. fn 2607, Ontario's Empioymenf Standards Act and OMERS pension changes were amended to allow employees who are reservists on active duty in the Canadian Military to "buy back" their credited service. The legislation does not cover retroactive service and OMERS rules state the employee must buy back both the employer. and employee contribution directly. 34 98011-D704 Report to the Finanee and Administration Item: FA- 09-04 Committee (Continued} -2 - Meeting Date: January 22, 2008 As the employee is providing a service to Canada and the City of Oshawa by their military service, Council may deem it appropriate to provide the employee the "employer portion° of the OMERS contribution. This would be the same amount that the City would have contributed to OMERS had the employee remained directly employed by the City. Payments in this regard are deemed to be a taxable benefit for the employee. Employees on military leave may purchase coverage from the federal government. Council may deem it appropriate to reimburse the employee their benefit costs in the Public Service Health Care Plan. 4..0 INPUT FROM OTHER SOURCES 4.1 Input from Others - OMERS - Department of National Defense 4.2 input from the Auditor General Not applicable 5.0 ANALYSIS - On November 24, 2008, the Finance and Administration Committee directed: 1. That s#aff develop a policy, for any staff serving his/her country in the military on an active tour of duty, stating that the City of Oshawa will pay the City's share of contributions to the employee's OMERS pension should the individual choose to buy back his/her eligible service upon return to work; and, 2. That staff report back on benefit coverage that the employee and his/her family may receive from the City of Oshawa and the military while on his/her tour of duty. - OMERS While on leave, the employee generates °broken service" which is a period of time that could be considered pensionable by OMERS if the employee pays the employer-and employee share within a specified time period after returning to work. • Only the employee is permitted to buy-back the broken service, but there is nothing to prevent the City from reimbursing the employer's share to the employee. • Any payment to reimburse the employee would be treated as a taxable benefit, and subject to statutory deductions (Income Tax, CPP and El). However, the employee would have an off-setting income tax deduction for an amount equal to his/her contribution. 35 Report to the Finance and Administration Item: FA- 09-04 Committee (Continued) - 3 - Meeting Date: January 22, 2008 - Health Benefits • Persons in the military receive various levels of basic health benefits, are covered under the Provincial Health Plan (OHIP) and are eligible to apply for coverage in the federal Public Service Health Care Plan. Depending on level of coverage selected, it costs the employee approximately $50 per month and provides coverage similar to that provided by the City's benefits program. 6.0 FINANCIAL IMPLICATIONS. The cost of reimbursing the employee the employer portion of OMERS past service is in the range of $8,000 to $16,000 for the typical 12 to 24 months of military service. - The cost of reimbursing the employee their payments in the federal Public Service Health Care Plan is approximately $600 per year. - Appropriate provision for this expenditure is included in the 2009 budget submission. 7.0 RESPONSE TO THE COMMUNITY STRATEGIC PLAN - Providing employees on military reservist leave the "employer portion" of the OMERS contributions and health benefit costs supports the Community Strategic Plan of a caring and responsive community by assisting employees who voluntarily participate in the reservist program that supports Canada's multilateral operations, peacekeeping, and humanitarian initiatives. ~.-~~.,~ nn Thurston, Manager HRServices and Safety is _G--. Ric Stockman, Commissioner Corporate Services Department 3b