Alliance Retiral Fund

ADMINISTRATION OF PART-TIME EMPLOYEES AND

THE ALLIANCE RETIRAL FUND (ARF)

The purpose of this document is to:

• Define Full and Part-Time employees and the ARF membership criteria for each. (ARF is separate from any extended health benefit the employer may offer and the membership criteria is different.)
• Outline a process for ARF employers (including churches) to administer membership in the ARF as it relates to part-time employees so pension and legislation is satisfied. 

The Full-Time and Part-Time eligibility rules are as follows:

Full-Time Employees are required to enrol in ARF starting with their first pay. 

Full-Time employees are defined as those who, according to their Employment Agreement:

• work 30 hours or more per week and
• are not hired on a contract basis with a specific end date (for example, a 1- or 2-year contract)

Part-Time Employees must have the option to join ARF when provincial legislated criteria are met.  The employer is responsible to let the employee know when the employee is eligible.

Part-Time employees are defined as those who, according to their Employment Agreement,

• work less than 30 hours per week and
• are not hired on a contract basis with a specific end date (for example, employees hired on a

2-year contract)

Provincial legislated criteria for Part-Time employees:

• As of July 2023, the criteria for employees in B.C, Alberta, and New Brunswick are:
• Has been employed for 24 consecutive months and satisfied one of the following:
• Has earned at least 35% of the YMPE

(The YMPE is the Yearly Maximum Pensionable Earnings set by the CRA each year and is $66,600 for 2023.)

• As of July 2023, the criteria for employees in Ontario, Manitoba, Saskatchewan, and Nova Scotia are:
• Has been employed for 24 consecutive months and has satisfied one of the following:
• Has earned at least 35% of the YMPE in each of the last 2 years or
• Has worked at least 700 hours in each of the last 2 years.

The other provinces have slight variations on these themes.  Please contact Reuter Benefits for those rules at [email protected].

Once a part-time employee satisfies the criteria above, he/she must be offered membership in ARF.  However, the employer has the option to be more generous and offer membership to their Part-time employees at anytime before those rules are satisfied.  The Part-time employee is under no obligation to accept the offer at any time.  

Contract Employees cannot join ARF.  When, according to their Employment Agreement, the employee is no longer on contract and becomes:

• Full-Time, he/she must join ARF.
• Part-time, the criteria listed above for Part-time employees apply.

ADMINISTRATION PROCESS FOR PART-TIME EMPLOYEES:

To track part-time employees’ eligibility for membership in ARF, one can create a spreadsheet like this:

The highlighted column shows if the employee has accepted the offer of ARF membership, been offered and declined it, or when they have fulfilled the 24-month time requirement.  When they have satisfied the time requirement, check the YMPE and hours worked requirements (if needed) to see if they qualify for ARF membership.

If they qualify, let them know verbally and send them the offer on the following page, which must be completed by email.

When you receive the completed form, file it in their personal file.  If they do not complete it, file a copy of the email containing the offer in their personal file.  Now you have a record that the offer was made and when it was made.  This will protect you and the church if the employee claims at a future date that they were not made aware of ARF eligibility.

This Administrative Process is a sample of how other Alliance employers administer part-time employees and their ARF eligibility.  It is provided as an aid, not a requirement.  Feel free to adjust it to meet your payroll processing needs.

July 2023

 Offer Form

OFFER OF ALLIANCE RETIRAL FUND ‘ARF’ MEMBERSHIP:

As a part-time employee you have the option to join The Pension Plan for The Workers of The Christian and Missionary Alliance in Canada (ARF) after satisfying the Plan’s rules.  You have now satisfied those rules.

ARF is a Defined Contribution Plan where member contributions and employee contributions are credited to the member’s account.  Membership rules require 5% of a member’s gross pay be deducted from salary at source to be placed in the member’s account.  The employer will contribute the same amount to the member’s account.  The member can contribute more than 5% to their account, depending on Canada Revenue Agency rules, however, the employer contribution is limited to 5%.

The contributions are currently invested in 7 investment funds managed by professional investment manager firms and GICs.  The member can choose the percentage of their contributions to be invested in each fund or have their funds invested according to the default option where the funds are invested in a balanced portfolio and reviewed by the Investment Advisory Committee. 

If you choose to join ARF, the registration package provided by the Pension Administrator will explain the process in more detail.

As a Part-time employee you are not obligated to join the Pension Plan.  If you do not choose to join now, you can join later.  If you choose to join later, you are required to send your request in writing to the Human Resources Manager.  If you choose to join later, your account will be opened at that time.  Membership will not be retroactive to the date for this offer.

Please indicate below whether you would like the join ARF or not:

I would like to join ARF.                                                 I would not like to join ARF at this time.

Signature:    _______________________                       Signature:    __________________________

Print Name: _______________________                       Print Name: __________________________

Date:            _______________________                       Date              __________________________

July 2023

Download ARF Max Contributions per year (and voluntary) here.

Reuters letter on Voluntary Max.

Voluntary Contributions:

Employees may choose to make additional voluntary contributions, over and above the required 5%; however, these voluntary contributions are not matched by the employer.  The maximum pension plan contribution permitted under the Income Tax Act is presently 18% of T4 employment earnings in a calendar year.  Since the 5% employee and 5% employer contributions add up to 10%, the maximum amount of voluntary contributions would be an additional 8% of employment earnings per year.

Alliance Retiral Fund (ARF) and Approved Leave of Absences

‘Approved Leave of Absences’ vary by provincial statute but normally include:

Pregnancy, parental, sick, family responsibility, bereavement, declared emergency, family caregiver, family medical, critical illness, organ donor, domestic or sexual violence, child death or crime-related child disappearance leave.

An employee has the right, not obligation, to continue to participate in ARF when on one of those leaves.

Temporary Layoffs

Temporary layoffs are not considered Approved Leaves and therefore no member or employer contributions will be made to the pension plan while on a temporary layoff (5% of zero earnings = zero contributions).

Approved Leave of Absence ARF Calculation (No SUBP)

(Some churches have a Supplemental Unemployment Benefit Plan “SUBP”. Those churches will want to see the next section, “Approved Leave of Absence ARF Calculation (With SUBP)” for the calculation)

If an employee goes on approved leave, the employee is not required to make an ARF contribution (as 5% of their C&MA salary is $0).  However, the employee can choose to continue to make ARF contributions during the leave.  If the employee decides to continue ARF contributions, the contributions are calculated as if the employee was receiving the same salary during the leave as the employee received immediately prior to the leave.  The employee does not have the option of choosing another higher or lower amount.  If the employee decides to contribute, the employer is obliged to match that contribution. If the employee chooses not to make an ARF payment, the employer contributions are nil for this employee.   Please see the appendix for a sample calculation.

As participating during an Approved Leave is optional workers can stop making contributions then start again during the Leave.

The Employee:

The onus is on the employee to provide post-dated cheques payable to the church for the employee portion of the contributions to initiate this benefit. The church will include those contributions on your T4 slip.

If the employee terminates their job during or after the leave, they are no longer an employee.  In that case contributions should stop immediately, and the funds moved out of the ARF plan.

The Church or Employer:

The employee’s cheque is payable to the church, not to ARF.  The church will cash the cheques, not send them to the NMC.  Those contributions and the matching employer portion will be included with the normal contributions and remittance form sent to the NMC each month. 

The contributions will be included on the employee’s T4 as normal ARF contributions (box 52 employer and employee combined contribution amount and box 20 employee contributions).

Normally the combined employee and employer contributions to ARF cannot exceed 18% of the earned income.  However, CRA has made exceptions where the reason for the excess is contributions for Approved Leaves.

The church (employer) is never permitted to cover both costs of the contributions – cannot pay the employee’s contributions part (like a gift).

Approved Leave of Absence ARF Calculation (With SUBP)

If the church provides a Supplementary Unemployment Benefit Plan (SUBP) when an employee is on an Approved leave, those earnings are treated like other earnings paid by the employer and are subject to mandatory ARF contributions.  ARF contributions are due on payments made from the SUBP only.  No ARF contributions are due on the employment insurance payments made by the government to the employee.  However, the employee has the option of contributing to ARF on the portion of earnings not covered by the SUBP according to the calculation described above under Approved Leave of Absence ARF Calculation (No SUBP).  Please see the appendix for a sample calculation.

                                                                                                                                                July 2023

APPENDIX

An Example of Approved Leave of Absence ARF Calculation (No SUBP)

• An employee is going on Parental leave for a year, an approved leave under the province’s Employers Standards Act.
• She makes $5,000 per month.
• She has been given the choice of contributing to ARF while on leave with the understanding she needs to provide the church with the employee’s contribution of $250 (5% of $5,000) each month.
• She has chosen to do so and writes 12 post dated cheques to the church in the amount of $250 each.
• Each month the church cashes a cheque and includes the funds with the employer’s matching amount in the regular monthly ARF contributions it sends to Ken Board at the NMC.
• If the employee chooses not to contribute while on leave, the church owes nothing for that employee.

An Example of Approved Leave of Absence ARF Calculation (With SUBP)

• An employee is going on Parental leave for a year, an approved leave under the province’s Employers Standards Act.
• She makes $5,000 per month.
• The church’s SUBP includes ‘topping-up’ the employee’s wages when on Parental Leave to 80% of the employee’s normal salary.
• The employee receives 55% of their normal salary from the government in employment insurance (EI) or $2,750 per month (55% of $5,000).
• 80% of the employee’s normal salary is $4,000 (80% of $5,000)
• Under the SUBP the church will pay the employee $1,250 ($4,000 - $2,750).
• The required ARF contributions to be deducted from the employee’s pay are $62.50 per month (5% of $1,270)
• Each month the church will send to the NMC for this employee’s ARF $62.50 for the employee’s contributions and $62.50 for the matching employer share.

Then the employee has the option of making ARF contributions on the difference between their normal salary and the SUBP benefit or $3,750 ($5,000 - $1,250).

• She will need to know that if she chooses to do so, she must pay the church for the employee’s contribution of $187.50 per month.
• She has chosen to do so and writes 12 post dated cheques to the church in the amount of $187.50 each.

• Each month the church cashes a cheque and includes in the regular monthly ARF contributions and sends to Ken Board at the NMC:
  • The employee’s SUBP deductions of $67.50
  • The employer’s matching portion of the SUBP of $67.50
  • The employee's contributions on amounts above the SUBP of $187.50
  • The employer's matching portion on amounts above the SUBP of $187.50
• If the employee chooses not to contribute while on leave, the church owes the NMC:
  • The employee’s SUBP deductions of $67.50
  • The employer’s matching portion of the SUBP of $67.50

July 2023

Download Alliance Retiral Fund - Approved Leave of Absence here.

ARF – Yearly T4 Boxes & Registration Number

When treasurers/administrators complete 2023 T4s, please include the ARF Pension

Plan Registration Number 0275107 in Box 50. (The ARF is a registered defined contribution pension plan.)

·         A Pension Adjustment (PA) amount is to be included in Box 52 of the T4 slip.

·         The PA calculation is simply the sum of (a) the 5% required employee ARF contributions made in 2023,  (b) the 5% matching employer contributions for 2023, and (c) any additional voluntary ARF contributions made by the employee (these are not matched by the employer). 

·         Also, for ARF the employer portion is not a taxable benefit.

·         Employee ARF contributions, including any voluntary ARF contributions, are included in Box 20.