The BC Pension Corporation recently sent out a bulletin regarding the 27 pay periods for biweekly payrolls in 2009. (please click here for bulletin). The BC Pension wants the pension credits calculated as if the number of pay periods in the year is still 26.

In the OPS payroll system the 03=NUMBER OF PERIODS field under each Pay Cycle Code (4,2,14) is used by the income tax calculation, the CPP exemption as well as the BC Pension credit calculation. When you change the NUMBER OF PERIODS to 27 on the Pay Cycles codes for 2009 (needed to ensure taxes are correct and CPP is not over exempted) then the pension credit formula will also require an adjustment. The portion of the pension credit formula effected is the maximum credits divided by the number of pay periods in the year.

As stated in the bulletin:

Maximum credits 12.00 divided by 26 = .462
Maximum credits 12.00 divided by 27 = .444

Our suggestion:

To adjust for 27 pay periods change the Maximum credits to 12.47:

Maximum credits 12.47 divided by 27 = .462

Of course you will need to change the maximum credits back again for 2010.