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Statutes of Newfoundland and Labrador 2010


CHAPTER 18

AN ACT TO AMEND THE PORTABILITY OF PENSIONS ACT

(Assented to June 24, 2010)

Analysis


        1.   S.2 Amdt.
Interpretation

        2.   S.3 R&S
Portability election

        3.   S.3.1 R&S
Re-transfer of service

        4.   S.4 Amdt.
Transfer of employee and employer contributions

        5.   S.4.1 Added
Transfer on an actuarial basis

        6.   S.6.1 Added
Deficiency


Be it enacted by the Lieutenant-Governor and House of Assembly in Legislative Session convened, as follows:

RSNL1990 cP-17
as amended

        1. Paragraph 2(1)(a) of the Portability of Pensions Act is repealed and the following substituted:

             (a)  "actuarial cost" means the cost of the service to be credited as determined at the date of the election and calculated with reference to the assumptions from the most recent actuarial valuation for funding purposes;

          (a.1)  "pension plan" means a pension plan, retirement benefit or arrangement

                      (i)  as constituted under the authority of, or

                     (ii)  as set out in,

an Act listed in the Schedule or added to the Schedule by order; and

        2. Section 3 of the Act is repealed and the following substituted:

Portability election

        3. (1) An employee, covered under a pension plan, who transfers his or her employment to another body whose pension plan is established under one of the pension plans may elect to have the pensionable service transferred to that other pension plan where the employee has not received a termination benefit from the exporting pension plan.

             (2)  An employee covered under a pension plan who elects to transfer his or her pensionable service under subsection (1) before January 1, 2011 may elect to do so under section 4 or section 4.1, and on or after that date, section 4.1 shall apply.

             (3)  An election made under this section is irrevocable.

 

        3. Section 3.1 of the Act is repealed and the following substituted:

Re-transfer of service

      3.1 (1) A person who elected under section 3 to transfer pensionable service from a pension plan, other than the plan established under the Members of the House of Assembly Retiring Allowances Act, to the pension plan established under that Act, who is not eligible to receive a retiring allowance under that plan, may elect to transfer that pensionable service back to the pension plan from which it was transferred notwithstanding that the person is not an employee to whom this Act applies.

             (2)  Sections 4, 4.1, 6 and 6.1 do not apply to an election under subsection (1).

             (3)  Where a person who elected to transfer pensionable service to the pension plan established under the Members of the House of Assembly Retiring Allowances Act elects to transfer that pensionable service back under subsection (1), the amount transferred shall be returned, together with interest, to the pension plan from which it was transferred, and a deficiency that was paid by the person shall be returned to the person, together with interest.

             (4)  The rate of interest referred to in subsection (3) shall be,

             (a)  with respect to an election that was made under section 3 and a transfer of pensionable service under section 4, the rate of interest applicable to refunds of the pension plan established under the Members of the House of Assembly Retiring Allowances Act; and

             (b)  with respect to an election that was made under section 3 and a transfer of pensionable service under section 4.1, the same rate of interest that was used in the calculation of the actuarial value.

 

        4. Subsection 4(1) of the Act is repealed and the following substituted:

Transfer of employee and employer contributions

        4. (1) Upon an election being made under section 3 before January 1, 2011, the exporting pension plan shall pay to the importing pension plan the employee and employer contributions to the pension plan with respect to the employee together with interest.

 

        5. The Act is amended by adding immediately after section 4 the following:

Transfer on an actuarial basis

      4.1 Upon an election being made under section 3, the exporting pension plan shall transfer to the importing pension plan the amount that is the lesser of

             (a)  the amount available from the exporting plan, which is the greater of

                      (i)  the actuarial cost of benefits in respect of the service under the exporting plan in accordance with the terms and conditions of that plan as at the termination date, increased with interest to the date of payment using the same rate of interest that was used in the calculation of the actuarial value; and

                     (ii)  the value of the employee's termination benefits at the date of termination; and

             (b)  the actuarial cost of benefits calculated as at the date of the election to transfer that would be created in the importing plan in accordance with the terms and conditions of that plan, in respect of the credited service in the exporting plan.

 

        6. The Act is amended by adding immediately after section 6 the following:

Deficiency

      6.1 (1) Where the amount transferred under section 4.1 is insufficient to finance the actuarial cost of the full period of pensionable service that has been transferred under that section, the employee may elect

             (a)  to pay the amount required to make up the deficiency; or

             (b)  to be credited with the proportionate period of pensionable service that can be financed by the amount transferred from the exporting plan.

             (2)  The amount of a deficiency shall be paid in the manner directed by the minister.