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June 18th, 2013
June 18th, 2013
en

Severance Pay

Dear members,

                             June 12th represented the deadline for the Employer to provide LPs with information regarding their severance payout.   For more information on the subject, we strongly suggest that you consult article 22 of the collective agreement, our exhaustive FAQs on the matter or your compensation advisor who should be your main point of contact for inquiries related to the severance payout.
  
As a quick reminder, please take note that you will have until September 12, 2013 to choose one of the following options:
  
1)     immediately cash out the voluntary severance you have accumulated as a single payment at the rate of pay of your substantive position as of March 12, 2013;

2)     keep your accumulated voluntary severance and have it paid out when you resign or retire from the public service as a single payment at the rate of pay of your substantive position as of the date or termination of your employment from the public service; or

3)     immediately cash out part of the accumulated severance and keep the rest of it to be paid when you resign or retire from the public service.
  
There is no deadline for the severance payout to be made but we have been in contact with Treasury Board in order to obtain some timelines.  In addition, for ease of reference, please find below the list of questions dealing with the issue of severance pay in our FAQs.

a)      What is up with severance pay?

b)      How does the tentative agreement compare to other awards that resulted in the elimination of severance pay?

c)      If I opt for a severance payout before my actual retirement on account of the termination of the severance pay accumulation benefits relating to my voluntary resignation or retirement, will this payout be treated as a retiring allowance?

d)      Article 22.01(a) of the current agreement (which remains unchanged under the tentative agreement) provides for no cap on severance in the event of layoff and article 22.04 of the tentative agreement entitled Severance Termination provides for a cap. Can you confirm whether the tentative agreement has the effect of overriding the "uncapped" provision at article 22.01?
  
e)      Will employees with less than 10 years´ service be eligible to receive a severance payout?

f)       How do I elect my severance payout option?

g)      Is income tax the only deduction from the severance cash out payment?

h)      Do I still get severance if I am laid off?

i)       Will taxes be deducted if I use my severance cash out to buy-back service for my pension?

j)       Will there be an "automated severance pay calculator" available for employees to help them choose the best option concerning the severance pay?

k)      Will the form set out years of continuous employment, pay as of the second day of the contract, and estimate of gross severance pay?

l)       Will LAs receive a copy of the tax waiver form to complete and return to the employer if they wish to roll over $10,000 or less severance pay into their RRSP?


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