Calculating Contributions
The formula for calculating TRAF contributions as of September 2012 is:
7.3% on pensionable earnings that are up to the Yearly Maximum Pensionable Earnings (YMPE) established by the Canada Pension Plan and 8.9% on pensionable earnings that exceed the YMPE on a per pay basis.
Contributions on retroactive pay must be taken at 8.4% on earnings prior to September 1, 2012.
Contribution Rate Increases
Effective September 1st of the following years:
2013 | 2014 | 2015 | |
Up to YMPE | 7.8% | 8.3% | 8.8% |
Above YMPE | 9.4% | 9.9% | 10.4% |
The following calculation examples use a contractual salary of $60,000 and $50,100 as the 2012 YMPE:
Basic Annual Contribution
Up to the YMPE | ||||
$60,000.00 | ||||
- 50,100.00 | ||||
$50,100.00 | = 9,900.00 | |||
x 7.3% | x 8.9% | |||
$3,657.30 |
$881.10 | = | $4,538.40 |
24-Pay Period
Up to the YMPE | Above the YMPE | |||
$2,500.00* | ||||
- 2,087.50 | ||||
$2,087.50* | = 412.50 | |||
x 7.3% | x 8.9% | |||
$152.39 | $36.71 | = | $189.10 | |
x | Number of pay periods per year |
* Annual amount divided by 24.
If a teacher works less than 100% time, earnings must be annualized to the full-time rate. Determine the full-time contributions using the above formula and multiply the contributions by the percent of service.
Working 50% of a Year
$4,538.40 (Basic Annual Contribution) x .5 = $2,269.40 / Number of pay periods per year.
Even though the teacher earned $30,000.00 which is less than the YMPE, earnings are annualized to $60,000.00 and the combination of 7.3% and 8.9% should be used. Do not simply take 7.3% of the $30,000.00.
Working a Portion of a Year
Contributions must be calculated on a daily rate if a teacher works only a portion of the year.
$4,538.40 / Days in a working year x Number of days worked.
New Contribution Method
Effective September 2016, TRAF contributions must be calculated based on the annual contractual salary and pensionable days paid per month. School divisions can start using this method for September of this year or for September of any year prior to 2016. It must be implemented by September 2016.
Using the same example as above, the annual TRAF contribution as of September 2012 is $4,538.40.
To calculate contributions for September, 2012:
$4,538.40 / 196 (days in working year) x 19 (days paid in September) = $439.95
For a teacher working 50%:
$4,538.40 / 196 x 9.5 = $219.97
TRAF contributions will fluctuate each month based on the number of days paid in that month. Contributions will not be deducted in July and August. Note: Those who have days paid in all 12 months (for example, superintendents, colleges, universities and Department of Education) can continue deductions using the old method.
The new method eliminates the TRAF calculator and it reduces the contribution variances.