Q: As an executive, what rules / policies apply if I am relocated?
Executives are subject to the provisions of the National Joint Council (NJC) Relocation Directive. If you are an executive who is relocating as a Foreign Service Officer, your move would be covered by the NJC Foreign Service Directives which has different provisions for entitlements and obligations.
Q: Are there any exceptions?
There are some special provisions for members of the EX group (and equivalent) and Governor-in-Council appointees (GIC’s).
These provisions include:
10% Home Sale Assistance
- Employees may be reimbursed the difference between the appraised value of their home and the actual selling price, if the latter is lower. The maximum reimbursement shall not exceed 10% of the appraised value, or $15,000.
Weekend Travel Home Every Two Weeks while on Temporary Dual Residence Assistance (TDRA)
- When a definitive move is not possible, EX/GIC category employees shall be entitled to travel home on average every two weeks while on TDRA and the transportation costs will be paid by the employing department / agency (this includes commercial carrier or private motor vehicle, taxi, tolls and car rental but neither meal nor incidental benefits).
- There are a limited number of trips. If your relocation continues for longer than one year, you will not continue to be entitled to these trips at government expense.
Incidental Expenses Allowance
- Executives are entitled to a taxable non-accountable incidental relocation allowance equivalent to four weeks salary (which is calculated as the employee’s annual rate of pay divided by 52.176 x 4). Non-EX’s are entitled to $650 that applies to all employees,
Q: Are there any other services I can receive?
At the discretion of the employing department/agency (paid for by the employing department/agency), EXs and GICs may be offered face-to-face consultations with the Contracted Relocation Service Provider’s (CRSP) personnel for:
- counselling at employee’s office (within the regional office locations);**
- Initial consultation with CRSP representative;**
- preparation of HHT (House-Hunting Trip);
- post HHT;
- final reconciliation of expenses, entitlement, etc.;** The additional cost of this service is the responsibility of the employing department/agency, and is not included in the service contract
There are also provisions for relocations from abroad.
Q: Are there any other issues I should be concerned about with respect to relocation?
Experiences of fellow executives, as relayed to APEX, offer the following considerations:
YOUR HOUSE AND THE MARKET
Home Sale Assistance
If the housing market in your residence at origin is not doing well, the loss of your home value may significantly exceed that which is offered in the way of assistance (i.e. 10% Home Sale Assistance to a maximum of $15,000). Home Sale Assistance is designed to allow employees to market their home for slightly less than the appraised market value in order to secure a quick sale. The benefit is based on the appraised value of the home and not the price that was paid for it. Depending on the market, you may lose some of the home equity. There may be additional expenses of supporting two residences. After six months of TDRA, if your house at the original site is not sold, you will not continue to receive financial support for maintaining the original residence until it is sold as well as your temporary accommodations. If your original home remains unsold, you may find that your spouse or another family member will have to remain there to ensure ongoing insurance coverage remains valid (vacant residence).
Real Estate Commissions
Real estate commissions paid by the CRSP under the relocation directive are lower than the rates that real estate agents normally receive from individual sales (e.g. 4.4% compared to 5% or 6% for a normal MLS listing). Home Sale Assistance is designed to allow employees to market their home for slightly less than the appraised market value in order to secure a quick sale. The benefit is based on the appraised value of the home and not the price that was paid for it. In a slow real estate market, where there are many listings, agents may not be able to provide you with the attention you need, which may delay the sale of your home.
Further, the market might be in such a slump that, in spite of all of your best intentions, you are not able to even receive offers on the residence of origin (meaning you might be carrying two mortgages or are constantly being distracted in the workplace by interactions with realtors and potential buyers). Also remember: Temporary Dual Residency Assistance ends when the residence at origin is sold or rented or after the 180 days have passed once funds in the customized envelope are exhausted.
Real Estate Commissions and home sale incentives
Relocation benefits such as real estate commission and home sale incentives: If your house at origin remains unsold and you are approaching the end of the one year relocation period, you will have to make difficult decisions such as whether to submit a business case requesting an extension (which may or may not be approved) or drastically reduce the price of your home so you do not lose these incentives. In order to receive the Real Estate Commissions Savings incentive, employees must opt not to sell their home and sign a waiver within 15 days of receiving their appraisal. This typically occurs near the beginning of the one year period rather than the end. There are no other incentives associated with the sale of the home. It is accurate that relocation benefits such as real estate fees are no longer payable once the one year relocation period has expired. An extension to the one year period may be granted when exceptional circumstances prevent an employee from completing their relocation and claiming their expenses within the one year period.
Likewise, if the housing market at residence of relocation is hot, i.e. western Canada, you may find that your relocation might place you in a net loss financial position. Treasury Board advises that: It is the policy of the government that in any relocation, the aim shall be to relocate an employee in the most efficient fashion, at the most reasonable cost to the public while having a minimum detrimental effect on the employee, his/her family and on departmental operations. Relocation expenses must be directly attributable to the relocation and must be clearly reasonable and justifiable. The provisions shall only provide for the employee’s legitimate expenses without opening the way for personal gain.
Treasury Board, departmental relocation experts, and CRSP might each have different interpretations of your entitlements. Be sure to get advice in writing from the correct authority. You may find that your dedicated individual service provider changes during the relocation process. Expenses incurred as a result of misinterpretation or mistakes may not be reimbursed.
Professional relocation advice might not be any more than what is provided in the guidelines and policies. The CRSP may have pre-determined interpretations that they rely upon that may be different from how you interpret the directive. Consult the CRSP each step of the way. Your well-intentioned decision on a matter in order to reduce costs may have downstream consequences that could negatively impact you.
Keep copies of all the documents you submit, as you might be asked to provide them again in the future.
Being proactive and taking steps to either list your home at the residence of origin, or sign a lease at the new location prior to obtaining official authorization to relocate (see PSLREB decision ) might result in these financial expenditures being excluded from reimbursement or coverage.
The relocation directives are rules-based, as they need to be, however they might not be able to quickly adjust to new evolving types of expenses (which might not be covered).
THE NEW LOCATION
If possible, try to get an assignment to the new location before accepting relocation. Living in a city is much different than a short business trip.
Taxes (in addition to the provincial income and sales taxes) as well as the full suite of provincial and municipal fees and other living expenses in the new location might be higher, and might mitigate any increases in salary you were expecting, especially if your relocation was as a result of a deployment and not a promotion. These costs can add up.
Moving is a great time to down-size and de-clutter. Charities will often pick up, remove and provide tax receipts for items that you do not really need. If you do not have time to declutter before the move, there are likely similar organizations where you are unpacking at the new location.
There may be time limits to your entitlements under the relocation program (within one year of registering with the CRSP). Extensions have to be sought and obtained through the Departmental National Coordinator (DNC) of your new location beyond that timeframe. Other entitlements that are not specified in the NJC directive or the TBS policy, resulting from exceptional circumstances, may require TBS approval before they can be paid. The policy provides that “no request for an extension shall be unreasonably denied”. In order to be well-positioned to get an extension, you will need to have followed all the recommendations of the CRSP and your department. Further, your home in the original location must have been listed for sale in accordance with your appraisal value – or preferably below that value. For an extension of time to be granted, you will also need the support of your department. After the first extension, strong senior level support from your department may be helpful in convincing TBS to grant future extensions.
Be aware that there may be a time limit for you to confirm the contents of Household Goods and Effects (HGE) after they are delivered to the new location in order to benefit from any insurance claim. If you have not immediately unpacked the good as soon as they arrive, you might not be aware if they were damaged in transit and might miss the cut-off for any insurance claim. Please note that usually any period of storage other than storage in transit or authorized Long Term Storage (Isolated Posts) will immediately result in the carrier refusing to honour an insurance claim.
You may want to consider seeing if your department will assist you in getting the file opened with CRSP before the letter of offer is issued (which could take several weeks or months), so as not to lose benefits (i.e. you will not receive reimbursement for expenses incurred prior to the relocation file being opened, and all expenditures need to be within the clocked period). That said, most departments will not entertain authorizing a relocation in advance of a signed letter of offer.
Other expenses that are not specified in the NJC directive or the TBS policy, resulting from exceptional circumstances, may also require TBS approval before they can be paid (and cannot be granted by your department or the CRSP).
Support for covering mortgage cancellation penalties may not be as generous as you hope.
WHILE ON TDRA
While on TDRA, you may be housed at a hotel of the employer’s (department’s) selection (CRSP has no say in this), which could be a distance from your new work location. If your car is still at your location of origin (with your family, for example), be advised that there is no entitlement to a rental car at destination while on TDRA. If the weather is inclement, you may need to be prepared to walk, take public transit, or rent a vehicle at your own expense.
If you have a spouse (or partner) and that spouse is employed prior to your relocation, there is no guarantee for them of finding employment at the new location. If your spouse is a public service employee, in order to trigger any priority entitlement at the new location, they must be granted “relocation leave” in order to relocate with you. If that relocation leave ends, the priority entitlement also ends. If, for example, the employee takes certain other types of leave, such as maternity leave, which would end the relocation leave, the priority entitlement would end. Any changes in leave types, or employment status, should be checked against employer policies to determine possible effects on leave status. More information on this is available at Public Service Commission Guide on Priority Administration. Keep in mind that an “employee-requested” relocation will not entitle your spouse to priority staffing at the new location until your spouse goes on leave without pay.
If both you and your spouse have accepted relocation offers, and your spouse is at a different salary level, who accepts the offer first may trigger future entitlements under the relocation directive (see PSLRB decision).
Departments / Agencies interpret “spousal relocation” clauses differently, and the clauses are open to wide interpretation.
If you are undertaking this move without a strong network of support (and even if you are), make sure your superiors at your new location are aware of what you are going through, and that your need to spend time on the details of the relocation process should be factored in to the performance expectations they have of you during this period.
Relocations can be a stressful time, even under the best of circumstances, so take care of yourself (both mentally and physically). The relocation experience is frequently stressful for both the individual executive and the family due to separation, uncertainty, conflicting advice and financial pressures.
The “Personalized Fund” component of the relocation entitlements (which could include expenses related to: mortgage default insurance premium, mortgage interest differential, mortgage interest buy-down, and mortgage pay-down penalty when porting applicable) may well be outside of your control to manage, as you may need to wait for a response from CRSP or your department before taking the next step. This might affect the timing of your ability to make decisions needed to complete your move. The Personalized Fund is an amount of money generated from savings/incentives and allowances. Employees may claim certain expenses from this fund for legitimate relocation expenses not otherwise covered in the directive. There are very few restrictions on the use of this money and any unused funds are paid to the employee at the end of the relocation.
Updating your change of address for irregular contacts (such as that once-a-year communication) should not be overlooked. Opt for the longest available option for mail redirect service. In today’s social media, we take it for granted that everyone can follow us, however we should not overlook those businesses and service-providers (and even personal contacts) that we only hear from infrequently.
Take pictures of everything you plan on shipping. Will be helpful when reconciling what was received and the condition in which it was received. It is too late 3 years later to realize that an entire box was missing. It will also help if there is damage to contents.
- NJC Relocation Directive
- Examples of computation – 10% Home Sale Assistance (HSA)
- Benefits table
- TBS site
- Executive Group (EX) and Governor In Council Appointees (GIC) – Relocation Provisions
- NJC Communiqués
- Spousal relocation provisions of the PSC Appointment Framework
- Relevant PSLRB / PSLREB Decisions