Refund of contribution overpayment following the regularization of employment for 2023
Retraite Québec carried out a regularization of employment for 2023 for members of public-sector pension plans. Members entitled to a refund of contributions for that period have been notified in writing.
We encourage the persons concerned to sign up for direct deposit to make the steps they take easier and speed up the process to receive their repayment. It is simple, fast and safe!
What is the regularization of employment?
Regularization of employment concerns plan members who hold more than one employment in a given year. It is an adjustment of service, credited so that it does not exceed service usually recognized for one full-time employment in the same year (a year equals 1.0000). In order for an adjustment to be made, the total of the credited service for all employment must be greater than one year, except for the three following years:
- the year membership began;
- the year membership ended;
- the year in which maximum service was reached.
Once Retraite Québec has received information concerning the total credited service of a member of a public-sector pension plan from all the employers concerned, we can carry out the regularization of employment in the following steps:
- adjustment of service credited to one year (1.0000 year)
- adjustment of contributory salary
- if applicable, a refund of contribution overpayments, that is, any amount corresponding to the difference between the contributions paid and the contributions that should have been paid.
This table shows an example of the calculation of a contribution overpayment:
| Credited service | Contributory salary | Service used | Annual basic salary | Salary used | Contributions actually paid | Contributions that should have been paid | Overpaid Contributions |
|---|
| Employment A | 0,5000 | $25 000 | 0,5000 | $50 000 | $25 000 | $1500 | $1500 | 0 |
| Employment B | 0,6000 | $24 000 | 0,5000 | $40 000 | $20 000 | $1200 | $1000 | $200 |
| Total for the year | 1,1000 | $49 000 | 1,0000[1] | N.A. | $45 000 | $2700 | $2500 | $200 |
[1] | Since the annual basic salary for job A is higher, 0.1000 year of service is subtracted from job B. |
What should I do if I believe that I am entitled to a refund of contributions?
No action is required on your part. Contribution overpayments are now automatically refunded once we have finished processing the annual statements submitted by employers. Individuals entitled to a refund of contributions for a given year will either receive a cheque by mail or a direct deposit payment.
Can I apply for a refund of my contributions if I do not wish to wait for the mass refund operations?
No. We refund contribution overpayments without any action on your part. Only people entitled to a refund will be informed.
Will interest be calculated on the refund of my overpaid contributions?
Yes. The interest on the plan is applied to the contributions to be reimbursed as at the date of the refund. The interest rate is determined according to pension funds performance.
Will income tax be deducted from my refund?
Yes. Federal and Québec income taxes will be deducted from your refund.
When will the income tax slips related to that refund be issued?
The income tax slips required for your income tax returns will be issued at the beginning of each year, before the end of February. The amount of the contribution refund is taxable for the year during which the repayment was made.
Can I refuse my refund to get it at a later date?
No. A person cannot decide to decline a refund in order to receive it at a later date. Any declined refund will be transferred to the Ministère des Finances du Québec and income tax slips will be sent for the year when we issued the refund cheque. In addition, a person cannot transfer the amount due to him or her to an RRSP.