Download Teachers Pension Plan Deductions

Waterloo Catholic District School Board
Deferred Salary Leave Plan
Contributing Participants
Teachers Pension Plan Deductions
During your years of contribution to the Deferred Salary Leave (DSL) Plan, you
will only receive a percentage of your salary, but your contribution to Teachers
Pension Plan will be calculated on 100% of your salary. The same will apply in
your year of Leave.
Participation in the DSL Plan will have no impact on your Pensionable Earnings.
Investment Options
The Board will open a CIBC bank account “in trust for” each participant.
Deductions from your pay will be deposited into this account, which earns
interest at the CIBC Prime Rate less 2.75%.
Each year you are given the opportunity to review your investments and make
choices for the following year. There are 3 options:
1.
2.
Leave all of the accumulated funds in your bank account to earn interest
at CIBC Prime less 2.75%.
Purchase a GIC. The maturity date of the GIC must be on or before
September 1 in the year you will go on your leave.
Each participant is required to provide the Board with written investment
instructions annually. Failure to direct the Board to an alternative investment will
result in all payroll deductions being held in trust for you in the CIBC Bank
Account until the following year.
Income Tax Issues
At the end of each taxation year CIBC will issue a T3 or T5 for earnings on all
investments that are being held “in trust for” each participant. These earnings
must be included on your income tax return for the year to which they pertain.
When your deferred salary is paid out in your year of leave, the Board will make
the appropriate income tax deductions. Tax will be deducted only on that
portion of the payment identified as salary withheld. Investment earnings are
taxed in the year they are earned as identified on your T3 or T5.
The Income Tax Act requires, pursuant to Regulation 6800, that participants
return to work for a period that is not less than the period of leave.
By law, no more than six years can elapse between the time an individual begins
contributing to the plan and the date upon which the leave begins.
Unpaid Leaves
All existing assets will be held “in trust for” each participant during any unpaid
leave. All available funds will be paid out to the participant in their year of leave.