Paid absence prior to retirement

Last updated: March 7, 2022

Paid absence prior to retirement is any earned leave banks and allowances you take as paid absence from work right before you start your Public Service pension.


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Retirement from the BC Public Service is governed by the HR policy 07 Pay, benefits and leave > Paid absence prior to retirement.

During the paid absence period, both a part-time schedule and a modified work week revert to a standard full‑time schedule of 7 hours per day, 5 days per week. Therefore, leave banks are drawn down as if you're working full-time.


Retiring from the BC Public Service

To retire from service, AskMyHR completes the Paid Absence Prior to Retirement (PAPR) form for you.

The PAPR form:

  • Indicates your last day at work (the last day performing your current job duties)
  • Indicates whether you want to use your earned leave banks and allowances as:
    • Paid absence prior to retirement
    • A lump sum payout at retirement
    • A combination of both
  • Confirms your Statement of Intent to Retire
  • Confirms your pension start date (the first of the month after your last day on pay)

How it works

  • AskMyHR confirms your leave bank balances and retirement allowance eligibility and entitlement
  • AskMyHR assists you to work through various scenarios for your paid absence
  • Once you have decided on a final scenario, AskMyHR will send you a completed PAPR form
  • Review the information and return the signed PAPR form to AskMyHRIDIR restricted. Submit a service request using the category Myself (or) My Team/Organization > Leaving the Public Service > Retirement
  • Once the PAPR form has been signed and the paid absence has started, no further adjustments will be made to the leave for reasons of illness or other circumstances, other than death

If you use any of your leave banks or are on STIIP between the time you submit your signed PAPR and when your paid absence starts, contact AskMyHR right away. Submit an AskMyHR service request with the category Myself (or) My Team/Organization > Leaving the Public Service > Retirement. The form may need to be amended.


Benefits and conditions

During the paid absence period, all normal payroll and benefits deductions continue.

You also continue to accrue pensionable service.

Your benefit coverage ends on the last day of the month that the paid absence period ends. It's the day before you start your pension.

Please refer to your BC Pension Corporation retirement package for information on benefits coverage as a pensioner, or review Want to understand more about retirement health coverage? on the Public Service Pension Plan website.

In addition, you will not be covered by:

  • Short Term Illness and Injury Plan (STIIP)
  • Long Term Disability Plan (LTD)
  • Any allowance, wage replacement, or further leave provisions

The applicable sections of the Standards of Conduct for Public Service Employees continue to apply.


Earned leave banks

Your remaining earned leave banks can be used as:

  • Paid absence prior to retirement
  • Lump sum payout at retirement
  • A combination of both

Archived vacation cannot be used as paid absence and is paid out at the rate at which it was earned.

If you use any of your earned leave banks or are on Short Term Illness and Injury (STIIP) between the time you submit your signed PAPR and when your paid absence starts, contact AskMyHR (IDIR restricted) right away. Submit a service request using the categories Myself (or) My Team/Organization > Leaving the Public Service > Retirement. Your form may need to be amended.


Final year vacation entitlement

If you're scheduled to retire and proceed directly to pension, you're granted full vacation entitlement for the final calendar year of service. 

Your final year vacation entitlement is adjusted for periods of STIIP, any month where you have not received at least 10 days’ pay at straight time rate and pro-rated for periods of part-time service.

Submit an AskMyHR (IDIR restricted) to confirm your vacation entitlement using the categories Myself (or) My Team/Organization > Leaving the Public Service > Retirement.

If you're on paid absence prior to retirement and:

  • The paid absence using your leave banks carries over from your last year at work to the next calendar year, you're granted a full year’s vacation entitlement in that next calendar year. When the paid absence extends into more than one subsequent calendar year, you won't be granted any further vacation benefits
  • The paid absence using your retirement allowance carries over from your last year at work to the next calendar year, you are not granted further vacation entitlements in that next calendar year

Your remaining vacation leave bank can be used as:

  • Paid absence prior to retirement
  • Lump sum payout at retirement
  • A combination of both

Pre-1978, 50% sick bank benefit

This benefit is equivalent to 50% of an employee’s unused sick bank credits accumulated before 1978.

It may be taken either as paid absence prior to retirement or as a lump sum payment at retirement. It cannot be split.


Retirement allowance

The retirement allowance is paid to retiring employees who have accumulated 20 years or more of service with the BC Public Service.

It may be taken either as paid absence prior to retirement or as a lump sum payment at retirement. It cannot be split.

Submit an AskMyHR (IDIR restricted) to confirm your retirement allowance entitlement using the categories Myself (or) My Team/Organization > Leaving the Public Service > Retirement.


Last day on pay calculation

With earned leave banks

The use of earned leave banks as paid absence prior to retirement is extended by statutory holidays.

Example

If you use 20 days of your earned leave banks as paid absence, and 2 statutory holidays occur during the 20 days, you'll remain on payroll for 22 paid days.

With retirement allowance

The use of retirement allowance as paid absence prior to retirement is not extended by statutory holidays.

For example, 20 days entitlement equals 20 paid days.


Lump sum payouts

Leave bank payouts

Unused earned leave banks will be paid out at the employee’s current base salary rate. This includes salary protection.

Archived vacation will be paid out at the rate at which it was earned.

The leave bank payouts are processed within 2 pay periods of your last day on pay with the applicable statutory deductions.

They are paid out to you by direct deposit or cheque.

Retiring allowance payouts

If taken as a lump sum, the retirement allowance and pre-1978 50% sick bank are considered a 'Retiring Allowance' by the Income Tax Act

Lump sum payout of a retiring allowance is subject to Canada Revenue Agency (CRA) lump-sum withholding tax deduction rates of:

  • 10% for a payment up to $5,000
  • 20% for a payment up to $15,000
  • 30% for a payment over  $15,000

The retirement allowance and sick bank payments are combined to determine the correct withholding tax rate.

The retiring allowance payouts are processed in the month following your last day on payroll.

They're disbursed as non-payroll cheques directed to your home address listed on file.


Registered Retirement Savings Plan (RRSP)

Individual circumstances vary widely.

You should seek the advice of a reputable financial planner or institution before deciding the way these payments should be disbursed.

Note:  amounts cannot be contributed to an RRSP if you were over 71 years old at the end of the tax year.

Retiring allowance and RRSP contributions

If taken as lump sum payments, the retirement allowance and pre-1978 50% sick bank are considered a 'Retiring Allowance' by the Income Tax Act.

If you intend to contribute some or all of your retiring allowances to your RRSP or a spousal RRSP, review:

Leave bank RRSP contributions

If you intend to contribute some or all of your leave bank payouts to your RRSP or a spousal RRSP, you can ask Revenue Canada to approve a reduction of taxes at source for your payouts. 

The contribution must be within the unused portion of your RRSP deduction limit from your latest notice of assessment.

  • Complete a T1213 Request to Reduce Tax Deductions at Source Form
  • Submit the T1213 form to Revenue Canada, at least 8 weeks before your retirement date
  • Inform AskMyHR you have submitted the form so they will not pay-out your leave banks if your Revenue Canada approval is delayed. Submit an AskMyHR (IDIR restricted) service request using the categories Myself (or) My Team/Organization > Leaving the Public Service > Retirement
  • Once received, submit the approval letter to AskMyHR (IDIR restricted). Submit a service request using the categories Myself (or) My Team/Organization > Leaving the Public Service > Retirement

Once you receive your leave bank payouts, it's your responsibility to put the money into an RRSP.

Consult with your financial advisor before making any decisions


T4 tax information slips

Your paid leave and leave bank lump sum payouts are reported, along with your regular earnings, on a standard payroll T4 for the tax year in which it's earned.

Your retiring allowance lump sum payouts will be reported on separate T4 tax information slips and will be issued in February of the year following the lump sum payouts. 

Your T4s will be sent to your address on file.

If you move or your address on file is incorrect, contact AskMyHR (IDIR restricted) as soon as possible by submitting a service request using the categories Myself (or) My Team/Organization > Leaving the Public Service > Retirement.


Vacation on re-employment in the BC Public Service

After you retire, if you return to employment the same year you received your full final-year vacation entitlement, you do not receive any further vacation entitlements or vacation pay for that year.



Contacts

Public Service Pension Plan

  • 1-800-665-3554, Monday to Friday, 8 am to 4:30 pm
  • Website

Can’t find what you need?

Submit an AskMyHR (IDIR restricted) service request.

Use the categories Myself (or) My Team/Organization > Leaving The Public Service > Retirement.

If you're a B.C. government employee without an IDIR, call the BC Public Service Agency to submit your service request.