Policy 46a - Self-Funded Leave Plan

Approved Administrative Committee 1184.1

SELF-FUNDED LEAVE PLAN

SALARY DEFERRAL

PURPOSE

1. This Policy establishes a self-funded leave plan for all employees who wish to defer their salary to fund a leave of not less than six months and not more than twelve months.

2. The dean or director responsible for the employee has full discretion to grant a self-funded leave.

DEFINITIONS

3. Eligible Employee: An employee who has been employed by the University for a minimum of four years or a tenured professor.

4. Deferred salary: The portion of the salary that is retained by the University for a participant in each year according to paragraph 9 below and that is increased from time to time by the applicable interest.

5. Deferral period: The number of years for which salary is deferred in accordance with this policy.

6. Participant: An eligible employee who has signed a memorandum of agreement and whose participation in the plan has been approved by the dean or director responsible.

CONDITIONS

7. The participant must sign a memorandum of agreement with the University, specifying:

  • a) the portion of his or her salary that the University will retain to fund the leave, up to a maximum of 33 1/3% in any calendar year;
  • b) the leave period which can run from six to twelve months and must begin no more than six years after the salary deductions have begun.
  • For regular professors, the leave must begin between May 1 and August 31 and must end during the same period or on December 31;
  • c) the participant's commitment to return to his or her position at the University for a period at least equal to that of the leave;
  • d) that the participant shall not receive any other salary from the University during the leave period.

WITHHOLDING OF SALARY

8. The University shall, on the date specified in the memorandum of agreement, start withholding the specified portion of the participant's salary, invest such sums and credit the interest to the participant.

PAYMENT OF DEFERRED SALARY

9. During the leave, the total amount of deferred salary, less any statutory deductions or employee-benefits contributions to be paid by the participant under paragraphs 14, 15 and 16 shall be paid to the participant in equal bi-monthly amounts, at the same times and in the same manner as regular payroll.

CPP AND UIC CONTRIBUTIONS

10. CPP premiums are calculated as follows:

  • a) during the salary-deferral period, according to the participant's salary less the deferred amounts;
  • b) during the leave, according to the deferred amounts paid to the participant.

11. UIC premiums are based on the participant's salary before deferrals during the period of deferral, and no premiums are deducted during the leave period.

ACCRUED INTEREST PAYMENTS

12. On the following dates, the University shall pay to the participant the accrued interest on his or her deferred salary:

  • a) December 31 of the calendar year in which the employee becomes a participant;
  • b) each December 31 during the individual's participation in the plan; and
  • c) the last day of the leave, or when the University makes a payment due to postponement of leave, withdrawal from the plan or death of the participant, as provided for in paragraphs 17 to 23 inclusively.

13. Interest paid shall be considered as employment income under the Income Tax Act and must be reported on the participant's T4 Supplementary. Income tax shall be deducted at source.

PARTICIPATION IN BENEFIT PLANS

14. During the salary-deferral period and during the first three months of the leave, the plan participants shall continue to receive all benefits to which their salary normally entitles them.

15.a) Participants must maintain their coverage under the University's compulsory benefits during the fourth, fifth and sixth months of the leave, unless they can show that another source provides them with an equivalent protection.

b) Participants may continue to take part in the University's benefit and insurance programs after the sixth month of the leave by advising Human Resources Service in writing at least thirty days before the leave begins, it being understood that they must pay the total amount of the premiums (employer's and employee's share).

c) During the leave, the participant may continue to contribute to the University of Ottawa pension plan, it being understood that he or she shall be responsible for the total amount of premiums (employer's and employee's share).

16. During the leave, the participant shall neither accumulate vacation leave, or seniority, nor earn progress through the rank.

WITHDRAWAL FROM THE PLAN

17. A participant who ceases to be employed by the University must withdraw from the plan. The University shall, within sixty days of the termination of employment, pay to the participant the full amount of deferred salary and any interest accrued on that salary.

18. In exceptional circumstances, such as financial hardship, a participant, with the approval of the dean or director, may withdraw from the plan by giving at least six months notice before the commencement of the leave. The University shall then pay, within sixty days of such withdrawal, the full amount of deferred salary and any interest accrued on that salary.

19. Should the participant die, the University shall, within sixty days of receiving the notification of death, pay the deferred salary and any interest accrued on that salary to the participant's estate, provided that the University receives the clearances and proofs normally required for payment to estates.

SUSPENSION FROM PARTICIPATION

20. The participant may, no more than once while taking part in the plan, advise the University of his or her intention to suspend participation in the plan for a period of twelve months as of the next enrollment anniversary date. During the year in question, the University shall resume paying the regular salary to the participant, i.e. without deducting deferred salary. The already deferred salary shall be retained by the University until the participant takes the leave or withdraws from the plan.

21. Suspension of participation in the plan shall not delay the deadline by which the leave must commence, this being no later than six years after the employee's date of entry into the plan and remaining subject to paragraph 7. b).

22. The notice of suspension described in paragraph 20 above must be given in writing to Human Resources Service no later than three months before the suspension begins.

23. Participation in the plan starts again automatically on the next enrollment anniversary date.

AMENDMENTS

24. No exception may be made to this policy without the written consent of the Vice-rector, Resources.

25. Any amendments to this policy must comply with the Income Tax Act.

Revised April 13, 1994

(Office of the Vice-rector, Resources)

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