Single-rate Pension for Caregiving Leaves

Summary#

The government changed the Public Service Superannuation Regulations to make it easier for federal employees to keep paying the normal (single) pension contribution rate while on certain parental and caregiving leaves. The amendments took effect on the day they were registered — June 10, 2021.

What it does#

• Extends single-rate pension contribution treatment for many leaves taken without pay for caregiving or parental reasons.
• For employees covered by the Canada Labour Code, the rules now incorporate Division VII of that Code by reference so pension treatment matches labour‑code leave entitlements.
• For other federal public servants, single-rate treatment is extended for leave taken to:
  • care for a newborn or newly adopted child during the 78-week period after birth or placement; and
  • provide compassionate care or support to a seriously ill family member, or to care for a critically ill child or adult (including leaves tied to certain Employment Insurance Act benefits).
• Allows contributors who previously chose not to count certain leave periods as pensionable (an election under subsection 5.3(1) of the Public Service Superannuation Act) to revoke that choice within a set timeframe if the leave spans the changeover.
• Updates some technical wording (gender‑neutral language, replacing the Superannuation Account with the Public Service Pension Fund).
• Confirms timing rules for repaying contributions, including a lump-sum option within 30 days after return to active duty.

Who's affected#

• Federal public servants who contribute to the Public Service Pension Fund — especially those taking parental or caregiving leave without pay.
• Employees who are covered by the Canada Labour Code (federal employers outside the core public administration).
• Employees of the territorial public services in Nunavut, Yukon and the Northwest Territories, who are treated as part of the federal public service for pension purposes.
• The pension administrator (Public Services and Procurement Canada) and pay systems that must apply the new rules.
• The regulatory analysis estimated about 3,700 participants per year could be affected for extended parental leave and about 515 participants per year for compassionate caregiving leave.

Why it matters#

• Real people: the change lowers the extra pension cost that many parents and caregivers face when they take long leaves without pay. That makes taking longer parental leave or caregiving leave less costly in pension terms.
• Equity and alignment: federal public servants now get pension treatment more closely aligned with changes to the Employment Insurance Act and the Canada Labour Code, and with federally regulated workplaces.
• Gender impact: because women take a majority of caregiving leave, the change aims to reduce the disproportionate pension cost burden on them.
• Cost to government: the analysis estimates additional pension contribution transfers of about $5 million to $15 million per year for extended parental leave (upper estimate $15 million) and about $1 million per year for compassionate caregiving leave. The regulatory cost‑benefit presented the net impact over a 10‑year window as neutral overall.