TO: Participating Employers
FROM: Office of the Administrative Manager
RE: Reporting Requirements for Pension Contributions Due for Vacation Compensation
This is a continuation of a series of Bulletins issued to assist Employers in their monthly Pension reporting and in understanding other aspects of Trust administration.
The Pension Trustees have recently adopted a resolution concerning the proper manner to contribute when employees receive their vacation pay on their anniversary of employment or any date other than when the vacation time is taken. The new policy is as follows:
Policy on Pension Contributions for Vacation
Compensation Received on a Date other than the Pay Date
Immediately before or after Vacation Hours are Taken
(Effective May 1, 1996)
1. The following policy applies to Pension Agreements that require pension contributions on vacation hours for which a Covered Employee is entitled to receive compensation from the Employer under the following circumstances:
- a. The Pension Agreement expressly provides that Covered Employees are entitled to receive vacation compensation on their employment anniversary date or some alternate date other than the pay date immediately before or after the period during which the Covered Employee actually takes the vacation time off from work.
- b. The Pension Agreement is silent on when the Employer is required to compensate a Covered Employee for vacation time, but pursuant to established practice, the Employer pays vacation compensation on the Covered Employee’s employment anniversary or some alternate date other than the pay date immediately before or after the period during which the Covered Employee actually takes the vacation time off from work.
2. Regardless of when a Covered Employee receives compensation for vacation time, pension contributions shall be due for such vacation time regardless of when or if the Covered Employee actually takes the vacation time off, not withstanding any monthly maximums contained in the Employer’s Pension Agreement.
3. If the Pension Agreement contains monthly or annual maximums on the Employer's obligation to make pension contributions, paragraph number two shall not be construed to require the Employer to make contributions on behalf of a Covered Employee for more than 2,076 covered hours per year.
The annual Personal Benefit Statements were recently mailed to Trust participants to provide a report on benefits earned to date and benefits projected to age 65. The Statement also provides a detailed accounting of hours reported to the Trust during 1995.
If you receive inquiries which do not relate specifically to your payroll procedures or practices, please refer the individual(s) to the Area Administrative Office. Every effort will be made at the Administrative Office to answer participant's questions and to provide sufficient information for effective retirement planning.
We ask that you review the information presented and retain this Bulletin for future consultation. You should contact the accounting supervisor in your Area Administrative Office if questions arise.