DBplus is designed to minimize administrative work for participating employers. There are, however, certain responsibilities that must be carried out by employers.
Generally, full-time employees in the organization or group are enrolled in the Plan upon hire. Those who work part time must be notified upon hire and contract renewal that they have the option to enrol in the Plan at any time. CAAT provides employers with language for letters of offer and contracts to explain the eligibility rules to new hires. Employers provide CAAT with a monthly file listing part-time employees who have not enrolled in the Plan. CAAT sends notices to these non-members, advising them of their option to join going forward.
Employers deduct employee contributions from T4 earnings, at the selected fixed rate, add their contributions, and remit to CAAT using electronic funds transfer. Contributions are due by the 5th business day of the month following deduction to avoid being charged interest.
Under tax law, members of registered pension plans (RPPs) receive a Pension Adjustment (PA), reported on their T4 slip, that reduces their RRSP room. For DB plans, the reduction reflects the value of pension benefit they accrued in the RPP.
Using a spreadsheet supplied by CAAT, or using their own tool, the employer calculates the Pension Adjustment for each member of DBplus using this formula and reports it on the member’s T4:
Member + Employer contributions X 8.5% X 9 - $600 = Pension Adjustment
Employers send CAAT a monthly list of all employees who have enrolled in the Plan, including their work email addresses so that CAAT may send the periodical member newsletter directly to these members.
Employers report employee enrolments, employment changes that affect date of hire or enrolment, leaves of absence, and other member events during the year, using forms available in the employer administration manual. They also supply members with a form to update personal information.
Through the annual data collection process, due in March, employers use an online tool to report each individual member’s T4 earnings and contributions, any breaks in service (if not provided during the year), and the Pension Adjustment for the prior calendar year. If your organization is merging a defined benefit plan with CAAT, the Plan will work with you and any third-party administrators to collect any additional data that may be needed.
CAAT provides data reconciliation training webinars each year.
Following validation of the annual data, CAAT generates personalized annual pension statements that are mailed directly to members in the spring.
Employers are required to make members aware of their options to purchase additional pension and transfer prior retirement savings into the Plan. CAAT shoulders most of the administration surrounding these transactions and offers resources to explain purchases and transfers to members, including group presentations, a booklet, and an online estimator. Where the member opts to make a purchase or transfer, the employer completes a form to supply earnings data and prior plan information for the applicable period(s) of employment.
On an ongoing basis, members have the right to purchase unpaid leaves of absence and, where prescribed by legislation, to make pension contributions for statutory leaves, in which cases the employer also contributes.
As part of CAAT’s onboarding process, your payroll and HR staff will be trained on the employer responsibilities. Following onboarding, CAAT delivers refreshers and updates on any new processes for employers via webinars that can be watched live or on demand.
Invite CAAT’s pension experts to deliver an educational presentation to your employees at least once per year. Feedback from these sessions shows they are highly effective at helping members understand the value of their pension benefit.
Each year, all participating employers are required to attest in writing that they have enrolled eligible employees, calculated and remitted the correct amount of contributions, distributed member information as required, and that their staff who perform pension administration have attended CAAT’s training sessions offered during the year. This is an important step in CAAT’s administrative compliance program.
A detailed description of employer responsibilities and related forms can be found in the CAAT Pension Plan Employer Manual.
Help is only a phone call or email away
Our Employer Services team is here to help. Once your organization becomes a CAAT participating employer, as part of the onboarding process your organization will be assigned a Pension Analyst who is ready to answer your questions.
Portals will further reduce administrative work
CAAT is developing member and employer portals that will move more transactions online to save employers time and reduce risk.