This is an official version.

Copyright 2000: Queen’s Printer,
St. John's, Newfoundland, Canada

Important Information
(Includes details about the availability of printed and electronic versions of the Statutes.)

Statutes of Newfoundland 1998


CHAPTER 23

AN ACT TO AMEND THE FINANCIAL
ADMINISTRATION ACT

(Assented to December 15, 1998)

Analysis

1. S.15 Amdt.
Investments

2. S.22 Amdt.
Charges on fund

3. S.38 Amdt.
Method

4. S.39 Amdt.
Newfoundland Government
Sinking Fund

5. S.42 Amdt.
Repayment of loans by new issues

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


RSN1990 cF-8
as amended

1. (1) Paragraph 15(1)(h) of the Financial Administration Act is repealed and the following substituted:

(h) in securities, issued or guaranteed by a corporation or trust company, that have been included in the highest rating category in each of the 5 years immediately preceding the date of investment by at least 2 security rating institutions in Canada or the United States and are approved by the Lieutenant-Governor in Council prior to being acquired;

(2) Subsection 15(2) of the Act is repealed.

2. Section 22 of the Act is amended by striking out the word "and" at the end of paragraph (d), by striking out the period at the end of paragraph (e) and substituting a semi-colon and the word "and" and by adding immediately after paragraph (e) the following:

(f) issues may be made to make payments to the Province of Newfoundland Pooled Pension Fund to reduce the unfunded liabilities of those pension plans to which the Pensions Funding Act applies.

3. (1) Subsection 38(1.1) of the Act is amended by striking out the words "to cover the deficiency guarantee under the Pensions Funding Act" and substituting the words "to cover the unfunded liabilities of those pension plans to which the Pensions Funding Act applies".

(2) Subsection 38(3) of the Act is amended by striking out the word "or" at the end of paragraph (f), by striking out the comma at the end of subparagraph (g)(ii) and substituting a semi-colon and the word "or" and by adding immediately after that subparagraph the following:

(h) issued or guaranteed by a corporation or trust company that have been included in the highest rating category in each of the 5 years immediately preceding the date of investment by at least 2 security rating institutions in Canada or the United States and are approved by the Lieutenant-Governor in Council prior to being acquired.

4. Section 39 of the Act is amended by adding immediately after subsection (5) the following:

(6) Upon the approval of the minister, the trustee may lend to a company, bonds and securities held by the Newfoundland Government Sinking Fund under section 38, provided that

(a) neither the company nor the trustee is an associate of each other;

(b) the book value of bonds or securities that the trustee lends to any one company is not more than 10% of the book value of the assets held by the Newfoundland Government Sinking Fund;

(c) investment income of the bonds or securities loaned under this subsection continues to accrue to the Newfoundland Government Sinking Fund;

(d) in return for the bonds or securities loaned under this subsection, the Newfoundland Government Sinking Fund receives collateral equal in value to not less than 105% of the market value of the bonds or securities loaned by the trustee and 100% of the accrued interest on those bonds or securities and provided that those values continue throughout the period of time that the lending agreement for the bonds or securities is in force;

(e) the collateral referred to in paragraph (d) is a readily marketable investment permitted under subsection 38(3); and

(f) a market evaluation of the loaned bonds or securities and of the collateral referred to in paragraph (d) is made not less than once weekly.

(7) For the purpose of subsection (6), the words "associate" and "company" have the meanings assigned to them under the Securities Act.

5. Section 42 of the Act is amended by adding immediately after subsection (1) the following:

(1.1) The Lieutenant-Governor in Council may raise, by way of loan in the manner prescribed in subsection 38(1), the sum of money that may be required to make payments to the Province of Newfoundland Pooled Pension Fund to reduce the unfunded liabilities of those pension plans to which the Pensions Funding Act applies, without the further authority of the legislature.

©Earl G. Tucker, Queen's Printer