Members of the General Synod’s Continuing Education Plan (CEP) will see refunds of their existing contributions due to changes made to comply with requirements set by the Canada Revenue Agency. The Council of General Synod (CoGS) approved the changes at its fall meeting.
The changes, effective Jan.1, 2008, include eliminating the employee contribution of $150 per year and reducing the rate of reimbursing expenses to 80 per cent of eligible expenses – with 75 per cent to come from the employee account and 5 per cent from the general assets of the CEP. The employer will continue to contribute $450 per employee per year. The change also authorizes the administrator of the CEP to pay out the existing employee contributions to all the employees as of Dec. 31, 2007.
The changes mean that if an employee chooses to use the CEP, for instance, by taking a training course, funding will come from two sources. “First, a larger portion would come from the CEP fund, replicating the previous employer contributions. Secondly, a smaller portion would come directly from the employee, replicating the previous employee contributions, to cover the balance,” said Judy Robinson, executive director of the Pension Office Corporation, in a letter sent to bishops, diocesan administrators and participating employers. The revenue agency, added Ms. Robinson, recognized that the church would still want employees to make some financial contribution to their continuing education, but it suggested that they could do so at the time the course is chosen.
The changes will allow the fund’s income to accumulate tax-free in a controlled entity, said Ms. Robinson.
Since 2001, General Synod’s legal counsel has been seeking clarification with the revenue agency on the tax status of the CEP. In January 2007, the CRA said it was unable to rule on the matter and sought the opinion of the federal government’s justice department. The changes are the result of the advice of the justice department.