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Statutes of Newfoundland and Labrador 2014


CHAPTER 30

AN ACT TO AMEND THE PENSIONS FUNDING ACT AND THE PUBLIC SERVICE PENSIONS ACT, 1991

(Assented to December 16, 2014)

Analysis


              PENSIONS FUNDING ACT

        1.   S.3 Amdt.
Interpretation

        2.   S.5.1 Added
Transfer

        3.   S.9 Amdt.
Deficiency guarantee

              PUBLIC SERVICE PENSIONS ACT, 1991

        4.   S.2 Amdt.
Definitions

        5.   S.3 Amdt.
Application

        6.   S.4.1 Added
Fund established

        7.   S.5 Amdt.
Employee contributions

        8.   S.6 Amdt.
Deductions paid to fund

        9.   Ss.6.01 & 6.02 Added
6.01 Government payments
6.02 Termination and
        wind-up

      10.   S.13 Amdt.
Transfer from Government Money Purchase Pension Plan

      11.   S.14 Amdt.
Reciprocity

      12.   S.16 R&S
Retirement

      13.   S.18 Amdt.
Calculation of pension

      14.   S.19 R&S
19.   Pension upon
        retirement
19.1 Pension upon
        retirement - transitional

      15.   S.21 Amdt.
Offer of re-employment

      16.   S.25 Amdt.
When pensions payable

      17.   S.25.1 R&S
25.1 Indexing - persons in
        receipt on coming into
        force of section
25.2 Indexing - persons in
        receipt after the
        coming into force
        of section

      18.   S.26 Amdt.
Pension payments

      19.   S.29 Amdt.
Error or misrepresentation

      20.   S.30 Amdt.
Rectification

      21.   S.31 Rep.
Committee

      22.   S.34 Amdt.
Regulations re certain employees

      23.   S.34.1 R&S
Directive of corporation or sponsor body

      24.   S.35 Amdt.
Appeal

      25.   S.36 Amdt.
Procedure

      26.   Ss.36.1 to 36.8 Added
36.1 Corporation
        established
36.2 Application of Acts
        to corporation
36.3 Objects of
        corporation
36.4 Board
36.5 Corporation and board         bound
36.6 Funded status of plan
36.7 No liability
36.8 Binding effect

      27.   S.37 R&S
Application of Acts, conflict

      28.   S.41 Amdt.
Income Tax Act (Canada)

      29.   No liability

      30.   Act does not affect Provincial Court judges

      31.   Commencement


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

PENSIONS FUNDING ACT

RSNL1990 cP-6
as amended

        1. Paragraph 3(d) of the Pensions Funding Act is repealed.

 

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

Transfer

      5.1 The assets in the fund relating to the plan under the Public Service Pensions Act, 1991 are transferred to the Public Service Pension Plan Fund established under section 4.1 of that Act.

 

        3. Section 9 of the Act is amended by renumbering it as subsection 9(1) and by adding immediately after that subsection the following:

             (2)  Subsection (1) does not apply to the plan established by the Public Service Pensions Act, 1991.

PUBLIC SERVICE PENSIONS ACT, 1991

SNL1991 c12
as amended

        4. (1) Paragraph 2(a) of the Public Service Pensions Act, 1991 is repealed and the following substituted:

             (a)  "actuarially reduced pension" means a pension that has been reduced by an amount determined by an actuary that reflects the fact that the pension is being paid from a date that is earlier than the date the employee, based on his or her service, would be eligible for an unreduced pension;

         (a.1)  "advanced retirement age" means the end of the month in which the employee reaches the age of 58 years;

             (2)  The Act is amended by adding immediately after paragraph 2(a.1) the following:

         (a.2)  "board" means the board of directors of the corporation;

             (3)  Section 2 of the Act is amended by adding the following:

         (a.3)  "Canada Pension Plan" means the Canada Pension Plan, chapter C-8 of the Revised Statutes of Canada, 1985;

             (4)  The Act is amended by adding immediately after paragraph 2(c) the following:

          (c.1)  "corporation" means the Public Service Pension Plan Corporation established under section 36.1;

             (5)  Section 2 of the Act is amended by adding the following:

          (c.2)  "deferred pensioner" means a person who, under section 7.1 has elected or is considered to have elected to receive a deferred pension;

          (c.3)  "early retirement age" means the end of the month in which the employee reaches the age of 60 years;

             (6)  The Act is amended by adding immediately after paragraph 2(e) the following:

          (e.1)  "employer" means an employer of those persons included in the pension plan by an Act of the Legislature or a directive made under section 34;

             (7)  The Act is amended by adding immediately after paragraph 2(f) the following:

          (f.1)  "fund" means the Public Service Pension Plan Fund established under section 4.1;

          (f.2)  "funding policy" means the funding policy attached as Appendix A to the joint sponsorship agreement;

             (8)  Paragraphs 2(f.1) and (f.2) of the Act are repealed and the following substituted:

          (f.3)  "government" means the government of the province;

             (9)  The Act is amended by adding immediately after paragraph 2(f.3) the following:

          (f.4)  "joint sponsorship agreement" means the agreement relating to the joint sponsorship of the pension plan between government, on the one part, and the Association of Allied Health Professionals, the Canadian Union of Public Employees, the International Brotherhood of Electrical Workers, the Newfoundland and Labrador Association of Public and Private Employees and the Newfoundland and Labrador Nurses' Union, on the other part, dated December 10, 2014 and includes the appendices to the agreement;

          (10)  Section 2 of the Act is amended by adding the following:

          (f.5)  "life income fund" means life income fund as defined in the Pension Benefits Act Regulations;

          (f.6)  "locked in retirement account" means locked in retirement account as defined in the Pension Benefits Act Regulations;

          (11)  Paragraph 2(k) of the Act is repealed.

          (12)  Paragraph 2(o) of the Act is repealed and the following substituted:

             (o)  "prescribed", except as otherwise indicated, means prescribed by the corporation;

          (13)  The Act is amended by adding immediately after paragraph 2(q) the following:

         (q.1)  "sponsor body" means the body appointed in accordance with section 4 of the joint sponsorship agreement;

          (14)  Paragraph 2(t.1) of the Act is repealed and the following substituted:

          (t.1)  "terminating employee" means an employee who terminates his or her employment or whose employment is terminated for reasons other than disability and who is not retired, or entitled to receive a pension under subsection 19(3), (4) or (5);

          (t.2)  "transitional period" means the period of 5 years beginning on January 1, 2015;

 

        5. Paragraph 3(2)(a) of the Act is repealed and the following substituted:

             (a)  is excluded from this Act by a directive of the corporation;

 

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

Fund established

      4.1 (1) There is established a fund to be known as the Public Service Pension Plan Fund.

             (2)  The fund shall be held in trust by the corporation.

             (3)  The assets relating to the pension plan contained in the Newfoundland and Labrador Pooled Pension Fund under the Pensions Funding Act are transferred to the fund under the authority of section 5.1 of that Act.

             (4)  In addition to subsection (3), there shall be deposited into the fund

             (a)  contributions made by employees and employers under this Act;

             (b)  the income of the fund; and

             (c)  any other income arising from the operation of the pension plan.

             (5)  Where an employer does not make a contribution or deposit to the pension plan in the manner required by this Act, a penalty shall be assessed and levied upon the amount of that contribution or deposit in a manner directed by the corporation.

             (6)  There shall be paid out of the fund

             (a)  pensions, refunds and payments as they fall due under the pension plan;

             (b)  the operating costs of the fund; and

             (c)  other expenditures arising from the operation of the pension plan.

             (7)  The assets of the fund may be pooled with the assets of other pension plans, including government pension plans, for investment purposes as directed by the corporation.

 

        7. (1) Subsection 5(2) of the Act is repealed and the following substituted:

             (2)  There shall be deducted from the salary of every employee to whom the pension plan applies

             (a)  10.75% of that portion of his or her salary which is the basic exemption under the Canada Pension Plan;

             (b)  8.95% of that portion of his or her salary in excess of the basic exemption referred to in paragraph (a) up to and including the YMPE; and

             (c)  11.85% of the portion of his or her salary which is in excess of the YMPE.

             (2)  Section 5 of the Act is amended by adding immediately after subsection (2) the following:

         (2.1)  Notwithstanding subsection (2), the sponsor body may prescribe different amounts to be deducted from the salary of every employee to whom the pension plan applies.

             (3)  Subsection 5(5) of the Act is amended by deleting the words "pension fund" and substituting the word "fund".

             (4)  Subsection 5(6) of the Act is amended by deleting the words "pension fund" and substituting the word "fund".

 

        8. (1) Subsections 6(1) and (2) of the Act are repealed and the following substituted:

Deductions paid to fund

        6. (1) The government of the province shall pay out of the Consolidated Revenue Fund and pay into the fund an amount equal to the contributions of its employees under this Act unless otherwise directed by the sponsor body.

             (2)  The employers of those persons included in the pension plan under an Act of the Legislature or by a directive made under section 34 shall pay into the fund an amount equal to the contributions of their employees under this Act unless otherwise directed by the sponsor body.

             (2)  Subsection 6(4) of the Act is amended by deleting the words "pension fund" and substituting the word "fund".

 

        9. (1) The Act is amended by adding immediately after section 6 the following:

Government payments

   6.01 (1) The government shall deliver a fully enforceable promissory note to the corporation with the terms set out in this section.

             (2)  The promissory note shall amortize $2,685,000,000 over 30 years in equal annual amounts of $195,000,000 payable in quarterly instalments beginning on March 31, 2015.

             (3)  Payments made under subsection (2) shall be fixed and made regardless of the funded status of the pension plan in the future.

             (4)  The present value of the residual payments described in subsection (2), discounted at 6%, shall be considered an asset of the pension plan.

             (5)  The asset referred to in subsection (4) is a non-investment asset which is non-marketable and non-transferrable and which shall be used solely for the purpose of determining the funded ratio of the pension plan.

Termination and wind-up

   6.02 (1) Where the fund is to be terminated and wound up in accordance with the joint sponsorship agreement, the assets of the fund shall be used to meet the accrued benefit entitlements of employees, pensioners, deferred pensioners and any other persons entitled to a benefit under the pension plan before any other distribution may be made.

             (2)  Where the assets of the fund are insufficient to secure the benefit entitlements referred to in subsection (1), the assets of the fund shall be allocated to employees, pensioners, deferred pensioners and any other persons entitled to a benefit under the pension plan on a pro-rated basis, based on the actuarial present value of the accrued benefits of those persons as of the date of the wind-up, and distributed in the manner determined by the corporation.

             (3)  The government, an employee or an employer is not required to pay any additional amount to the pension plan in respect of a shortfall in the fund upon the wind-up of the pension plan.

             (4)  Nothing in subsection (3) affects in any way government's obligation to continue to make payments under subsection 6.01(2) in the manner contemplated in that subsection.

 

      10. Section 13 of the Act is amended by deleting the word "minister" and substituting the word "corporation".

 

      11. Subsection 14(2) of the Act is repealed and the following substituted:

             (2)  The corporation may enter into a reciprocal agreement with a government, company, corporation, institution or legal entity referred to in subsection (1) to give effect to the purposes set out in that subsection and to provide for payments to be made into and out of the fund under that agreement.

 

      12. Section 16 of the Act is repealed and the following substituted:

Retirement

      16. (1) An employee shall be retired under the pension plan

             (a)  where he or she makes an election under section 19 or terminates employment upon reaching normal retirement age, or, where he or she continues working past normal retirement age, at the earlier of termination of employment or reaching the age at which a pension benefit is required to begin under the Income Tax Act (Canada); or

             (b)  where, after the employee has used up all sick leave entitlement, he or she is unable to perform efficiently the duties of his or her position or the duties of an alternative position owing to incapacity that is medically certified to the satisfaction of the corporation as likely to be permanent, from a date to be determined by the corporation.

             (2)  Notwithstanding subsection (1), where, during the period an employee is on sick leave,

             (a)  the employee's employment is terminated by reason of redundancy;

             (b)  the employee has not used up all his or her sick leave benefits; and

             (c)  the employee meets the requirements of this section,

the employee shall be retired under the pension plan from the date the employee's employment is terminated.

 

      13. (1) Subsections 18(1) and (1.1) of the Act are repealed and the following substituted:

Calculation of pension

      18. (1) A pension awarded to an employee or seasonal employee is the product of 2% of the average annual salary of the employee or seasonal employee for the highest 6 years of pensionable service before retirement, multiplied by the number of years and months of credited pensionable service, but where the average of the highest 5 years of the employee's pensionable service before the coming into force of this section is higher than the employee's highest 6 years, the highest 5 years of pensionable service applies to the years and months of pensionable service worked before the coming into force of this section.

         (1.1)  For the purpose of subsection 19(4), the pension awarded under subsection (1) shall be reduced by 6% for each year that the employee's age is less than the age at which his or her unreduced pension would start.

             (2)  Subsection 18(1.4) of the Act is amended by deleting the word "minister" wherever it occurs and substituting the word "corporation".

 

      14. Section 19 of the Act is repealed and the following substituted:

Pension upon retirement

      19. (1) This section applies to all employees who accrue pensionable service after the coming into force of this section, whether or not the employee also accrued pensionable service before the coming into force of this section.

             (2)  Upon retirement in accordance with section 16 or subsection (3) or (4), an employee shall be awarded a pension.

             (3)  An employee who

             (a)  has reached normal retirement age and has not less than 5 years of pensionable service;

             (b)  has reached early retirement age and has not less than 10 years of pensionable service; or

             (c)  has reached advanced retirement age and has not less than 30 years of pensionable service

may elect to retire and receive a pension calculated and paid in accordance with section 18 and the other provisions of this Act.

             (4)  Notwithstanding subsection (3), an employee who

             (a)  has reached the age of 53 years and has not less than 30 years of pensionable service; or

             (b)  has reached the age of 58 years and the aggregate of that employee's age and years of pensionable service is not less than 88 years

may elect to retire and receive a reduced pension in accordance with subsection 18(1.1).

             (5)  Notwithstanding subsection (4), an employee or former employee who has reached the age of 55 years and has been credited with not less than 5 years of pensionable service may elect to retire and receive an actuarially reduced pension.

Pension upon retirement - transitional

   19.1 (1) This section applies to those persons who are eligible for retirement on the coming into force of this section or who become eligible for retirement in the transitional period.

             (2)  In this section

             (a)  "eligible for retirement" means eligible for retirement under section 19 of the Act as it existed before this section came into force; and

             (b)  "prescribed employee" means an employee who, by a directive of the minister under the Act as it existed before this section came into force, is eligible for retirement at the age of 55 years with not less than 25 years of pensionable service.

             (3)  An employee or a prescribed employee who is or who becomes eligible for retirement with an unreduced pension in the transitional period may elect to retire in accordance with section 19 as it existed before this section came into force at any time after reaching eligibility.

             (4)  A deferred pensioner who becomes eligible for retirement with an unreduced pension in the transitional period shall retire in the transitional period in accordance with section 19 as it existed before this section came into force.

             (5)  An employee or deferred pensioner who is or who becomes eligible for retirement with a reduced pension in the transitional period may elect to retire in that period in accordance with section 19 as it existed before this section came into force.

             (6)  An employee who has at least 30 years of pensionable service by the end of the transitional period may elect to retire at any time after reaching the age of 55 years in accordance with section 19 as it existed before this section came into force.

 

 

      15. Subsection 21(2) of the Act is repealed.

 

      16. Subsection 25(1) of the Act is repealed and the following substituted:

When pensions payable

      25. (1) Pensions shall be paid as directed by the corporation.

 

      17. Section 25.1 of the Act is repealed and the following substituted:

Indexing - persons in receipt on coming into force of section

   25.1 (1) Persons in receipt of a pension or a survivor benefit at the date of the coming into force of this section shall have their pensions indexed in accordance with subsections (2) and (3).

             (2)  On October 1 in a year the amount of a pension or survivor benefit being paid to a person who has reached the age of 65 shall be adjusted by multiplying

             (a)  the annual amount of the pension or survivor benefit;

by

             (b)  60% of the ratio that the Consumer Price Index for the previous calendar year bears to the Consumer Price Index for the calendar year immediately before the previous calendar year,

but the amount of any increase shall not exceed 1.2% of the annual pension or survivor benefit.

             (3)  The amount of a pension or survivor benefit being paid to a person shall not decrease by reason only of an adjustment under subsection (2).

Indexing - persons in receipt after the coming into force of section

   25.2 (1) Employees who retire after the coming into force of this section shall have their pensions and survivor benefits indexed in accordance with subsections (2) and (3).

             (2)  On October 1 in a year the portion of a pension or survivor benefit being paid to a person who has reached age 65 relating to years and months of service credited before the coming into force of this section shall be adjusted by multiplying

             (a)  the annual amount of the portion of pension or survivor benefit relating to years and months of service credited before the coming into force of this section;

by

             (b)  60% of the ratio that the Consumer Price Index for the previous calendar year bears to the Consumer Price Index for the calendar year immediately before the previous calendar year,

but the amount of any increase shall not exceed 1.2% of the annual pension or survivor benefit relating to the years and months of service credited before the coming into force of this section.

             (3)  The amount of a pension or survivor benefit being paid to a person shall not decrease by reason only of an adjustment under subsection (2).

 

      18. Section 26 of the Act is amended by deleting the words "pension fund" wherever they occur and substituting the word "fund".

 

      19. Section 29 of the Act is amended by deleting the word "minister" wherever it occurs and substituting the word "corporation".

 

      20. Section 30 of the Act is amended by deleting the word "minister" and substituting the word "corporation".

 

      21. Section 31 of the Act is repealed.

 

      22. (1) Subsection 34(1) of the Act is amended by deleting the word "minister" and substituting the words "corporation".

             (2)  Section 34 of the Act is amended by adding immediately after subsection (3) the following:

             (4)  Where, before the coming into force of this subsection, the minister issued a directive including in the pension plan persons employed on a full-time basis, that directive shall continue in force for 3 months after the coming into force of this subsection as if it had been made by the corporation unless it has been superseded by a directive of the corporation under subsection (1).

             (5)  A directive which has not been superseded under subsection (4) shall expire at the end of the period referred to in that subsection.

 

      23. Section 34.1 of the Act is repealed and the following substituted:

Directive of corporation or sponsor body

   34.1 (1) The corporation or sponsor body, as applicable, may issue directives to give effect to the purpose of this Act.

             (2)  Where, before the coming into force of this section, the minister issued a directive to give effect to the purpose of this Act, that directive shall continue in force for 3 months after the coming into force of this subsection as if it had been made by the corporation or sponsor body, as appropriate, unless it has been superseded by a directive of the corporation or the sponsor body under the authority of subsection (1).

             (3)  A directive which has not been superseded under subsection (2) shall expire at the end of the period referred to in that subsection.

 

      24. (1) Section 35(1) of the Act is amended by deleting the phrase "the minister or of the Lieutenant-Governor in Council" and substituting the words "the corporation".

             (2)  Subsection 35(2) of the Act is amended by deleting the phrase "the minister or the Lieutenant-Governor in Council" and substituting the words "the corporation".

 

      25. Section 36 of the Act amended by deleting the word "minister" wherever it occurs and substituting the word "corporation".

 

      26. The Act is amended by adding immediately after section 36 the following:

Corporation established

   36.1 (1) There is established a corporation without share capital to be known as the Public Service Pension Plan Corporation.

             (2)  The head office of the corporation shall be at St. John's.

             (3)  The corporation is not an agent of the Crown.

             (4)  The provisions of this section and sections 36.2 to section 36.7 constitute the articles of the corporation.

             (5)  A director or a person employed by the corporation does not become, by reason of that office or employment only, an officer or employee of the Crown.

Application of Acts
to corporation

   36.2 (1) The Corporations Act, except section 27, paragraphs 31(a), (d) and (e), sections 32, 167, 172, 190, 191, 198, 199, 200, 201, 204, 277, 278, 378, and subsection 422(1), does not apply to the corporation.

             (2)  The Lieutenant-Governor in Council, on the recommendation of the sponsor body, may make regulations directing that additional provisions of the Corporations Act apply to the corporation, provided that those regulations do not conflict with this Act.

             (3)  Where there is a conflict between a provision referred to in subsection (1) and this Act, this Act prevails.

Objects of corporation

   36.3 The objects of the corporation are

             (a)  to act as trustee of the fund; and

             (b)  to act as administrator of the pension plan, and to exercise those other powers and perform those other duties as may be expressly conferred upon the corporation under the joint sponsorship agreement.

Board

   36.4 (1) For the exercise and discharge of the powers and duties of the corporation, there shall be a board of directors comprised of not less than 6 and not more than 16 persons.

             (2)  A director of the corporation, in exercising his or her powers and discharging his or her duties, shall

             (a)  act honestly and in good faith with a view to the best interests of the pension plan and for the benefit of all employees, pensioners and deferred pensioners; and

             (b)  exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

             (3)  The board, by resolution, may make, amend or repeal by-laws that regulate the business or affairs of the corporation.

             (4)  By-laws made by the board shall not conflict with the joint sponsorship agreement.

Corporation and board bound

   36.5 The corporation and the board are bound by and shall act in accordance with the joint sponsorship agreement as provided for in that agreement.

Funded status of plan

   36.6 Actuarial surpluses and deficits relating to the pension plan shall be shared in accordance with the funding policy as follows:

             (a)  50% shall be shared with and borne by government; and

             (b)  50% shall be shared with and borne by the members of the pension plan.

No liability

   36.7 The corporation is not liable for loss or damage suffered by another person because of anything done or omitted to be done under or in the exercise or supposed exercise of the powers conferred by this Act, where those powers have been exercised in accordance with subsection 36.4(2).

Binding effect

   36.8 (1) The sponsor body's decisions, rules, policies and procedures made or established in accordance with the joint sponsorship agreement, the pension plan or the fund shall be binding on the corporation, employers, employees, pensioners and deferred pensioners and their respective beneficiaries, dependents, estates, heirs, executors, administrators, successors and assigns.

             (2)  The corporation's decisions, rules, policies and procedures shall be binding on the sponsor body, employers, employees, pensioners and deferred pensioners and their respective beneficiaries, dependents, estates, heirs, executors, administrators, successors and assigns.

             (3)  Notwithstanding subsection (1) or (2), nothing referred to in those subsections binds or in any way affects a Provincial Court judge who is a member of the pension plan or a pensioner at the date of the coming into force of this section or at any time in the future.

 

      27. Section 37 of the Act is repealed and the following substituted:

Application of Acts, conflict

      37. (1) The Pension Benefits Act, 1997 does not apply to this Act.

             (2)  Where this Act conflicts with the Public Employees Act or another Act, this Act shall prevail.

 

      28. Paragraph 41(c) of the Act is amended by deleting the word "minister" and substituting the word "corporation".

No liability

      29. An action or proceeding does not lie or shall not be instituted or continued against the Crown or a minister, employee or agent of the Crown or a participating employer based on a cause of action arising from, resulting from or incidental to the operation of this Act.

Act does not affect Provincial Court judges

      30. (1) Except as provided in subsection (2), nothing in this Act binds or affects in any way a Provincial Court judge who was a member of the pension plan or a pensioner or his or her spouse at the date of the coming into force of this Act or at any time in the future.

             (2)  A pension or survivor benefit for a Provincial Court judge shall be paid by the corporation out of the pension fund in accordance with the Act as it existed before this Act came into force.

 Commencement

      31. (1) Subsections 4(1), (3), (5), (6), (8), (10) and (14), 7(1), and 13(1), sections 14, 17, 21 and 29 and subsection 30(1) of this Act come into force on January 1, 2015.

             (2)  A section, subsection, paragraph, subparagraph or clause of this Act not referred to in subsection (1) comes into force on a day or days to be proclaimed by the Lieutenant-Governor in Council.