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Statutes of Newfoundland 1999


CHAPTER 36

AN ACT TO AMEND THE PUBLIC SERVICE PENSIONS ACT, 1991

(Assented to December 14, 1999)

Analysis

1. S.2 Amdt.
Definitions

2. S.7 Amdt.
Repayment of contributions

3. S.7.1 Added
Election upon termination

4. S.8 Amdt.
Purchase of prior service

5. S.20 Amdt.
Deferred pension

6. S.23 R&S
23. Survivor benefit
23.1 Death of employee

7. S.32 R&S
Marriage breakdown

8. Commencement

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


SN1991 c12
as amended

1. (1) The Public Service Pensions Act, 1991 is amended by adding immediately after paragraph 2(b) the following:

(b.1) "commuted value" means commuted value as defined in the Pension Benefits Act, 1997;

(2) Section 2 of the Act is amended by adding immediately after paragraph 2(f) the following:

(f.1) "life income fund" means life income fund as defined in the Pension Benefits Act Regulations;

(f.2) "locked in retirement account" means locked in retirement account as defined in the Pension Benefits Act Regulations;

(3) Section 2 of the Act is amended by striking out the word "and" at the end of paragraph (t) and adding immediately after that paragraph the following:

(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 subsections 19(2) or (3);

(4) Section 2 of the Act is amended by striking out the period at the end of paragraph (u) and substituting a semicolon and the word "and" and by adding immediately after paragraph (u) the following:

(v) "YMPE" means the year’s maximum pensionable earnings as defined under the Canada Pension Plan.

 

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 (1) Subsection 7(1) of the Act is repealed and the following substituted:

Repayment of contributions

7. (1) A terminating employee with less than 5 years of pensionable service may elect to receive a refund of contributions made by that employee, with interest at a rate prescribed.

(1.1) Where an employee with less than 5 years of pensionable service dies, the contributions made by that employee, with interest at a rate prescribed, shall be paid to the employee’s personal representative.

(2) Subsection 7(2) of the Act is amended by deleting the word and figure "subsection (1)" and substituting the word and figure "subsection (1.1)".

3. The Act is amended by adding immediately after section 7 the following:

Election upon termination

7.1 (1) A terminating employee with at least 5 years of pensionable service may elect within 180 days after termination

(a) a transfer of the commuted value of the pension entitlement of the employee, in accordance with paragraph 40(1)(a) of the Pension Benefits Act, 1997;

(b) a deferred pension in accordance with section 20; or

(c) a return of the contributions made by that employee, with interest at a rate prescribed, for periods of pensionable service credited

(i) before January 1, 1987, and

(ii) before January 1, 1997 where the terminating employee has less than 10 years of pensionable service and is less than 45 years of age,

and a transfer of the commuted value of his or her pension entitlement, based on the remaining periods of pensionable service, in accordance with paragraph (a).

(2) In default of an election under subsection (1) the employee is considered to have elected to receive a deferred pension.

(3) An employee who elects or is considered to have elected under subsection (2) to receive a deferred pension may only revoke that election to transfer his or her contributions to a pension plan included in the Schedule to the Portability of Pensions Act.

(4) A transfer under paragraph (1)(a) which is not to another pension plan or a deferred life annuity shall, regardless of when the pensionable service was credited, be to a life income fund or a locked in retirement account or other retirement arrangement approved by the superintendent of pensions.

(5) The transfer under paragraph (1)(a) shall not be less than the contributions made by that employee with interest at a rate prescribed.

(6) Where the transfer under paragraph (1)(a) would be greater than the maximum amount permitted under the Income Tax Act (Canada), the excess shall be paid to the employee.

(7) Where the annual pension payable is less than 4% of the YMPE for the calendar year in which employment is terminated, the employee or former employee is entitled to receive a lump sum payment instead of the deferred pension under section 20.

(8) Where the commuted value of a deferred pension benefit is less than 10% of the YMPE for the calendar year in which employment was terminated, the employee or former employee is entitled to receive a lump sum payment instead of the deferred pension under section 20.

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

Purchase of prior service

8. (1) Where a former employee ceased to be employed and received a refund of contributions or a commuted value upon termination and later becomes an employee, that employee may be credited with the prior pensionable service that he or she may elect to purchase in accordance with the terms and conditions that may be prescribed.

(2) Where a former employee who ceased to be employed and had not received a refund of contributions or a commuted value and later becomes an employee, that employee shall be credited with all pensionable service that accrued immediately before the employee’s termination.

 

5. (1) Subsection 20(1) of the Act is repealed and the following substituted:

Deferred pension

20. (1) A terminating employee with at least 5 years of pensionable service is entitled to a deferred pension benefit to be paid in accordance with section 19.

(2) Subsections 20(4) and (5) of the Act are repealed and the following substituted:

(4) A former employee with at least 5 years pensionable service whose employment terminated before January 1, 2000 and who did not receive a refund of contributions may before becoming eligible to receive a pension under subsection 19(2) or (3) make the same election as a terminating employee under section 7.1.

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

Survivor benefit

23. (1) A surviving spouse of

(a) a pensioner;

(b) a deferred pensioner; or

(c) an employee with at least 5 years of pensionable service,

is entitled upon the death of his or her spouse to a survivor benefit equal to 60% of the spouse’s pension entitlement.

(2) A deferred pensioner’s entitlement is the amount he or she would have received had he or she reached normal retirement age at the date of death.

(3) The survivor benefit shall be paid to the surviving spouse for life and shall commence on the first day of the month following the month in which his or her spouse dies.

(4) Where a surviving spouse dies while in receipt of a survivor benefit, the survivor benefit shall be paid to or for the benefit of any surviving children of the employee, pensioner or deferred pensioner, while they are under the age of 18 years, or under the age of 24 years while they are in full-time attendance at a recognized school or post-secondary institution.

(5) Where an employee, pensioner or deferred pensioner referred to in subsection (1) dies leaving no surviving spouse, the survivor benefit shall be paid to or for the benefit of his or her surviving children, while they are under the age of 18 years, or under the age of 24 years while they are in full-time attendance at a recognized school or post-secondary institution.

Death of employee

23.1 (1) Where an employee with at least 5 years of pensionable service dies before receiving a pension and a survivor benefit is payable under section 23, a surviving spouse may elect

(a) to receive the survivor benefit in accordance with section 23; or

(b) to receive in a lump sum

(i) the commuted value of the survivor benefit, or

(ii) the commuted value of the employee’s pension entitlement,

whichever is greater.

(2) Where an employee with at least 5 years of pensionable service dies and there is no survivor benefit payable under section 23, the commuted value of the pension entitlement of the employee, calculated as of the date of death, shall be transferred to the employee’s personal representative and subsections 7(2), (3) and (4) apply to the transfer.

 

7. Section 32 of the Act is repealed and the following substituted:

Marriage breakdown

32. Where

(a) a court has made an order for the division of matrimonial property under the Family Law Act or a similar order of a court outside the province; or

(b) an employee has entered into a separation agreement within the meaning of the Family Law Act to divide matrimonial property,

a pension shall be divided in accordance with the court order or separation agreement, and Part VI of the Pension Benefits Act, 1997 applies with the necessary changes.

Commencement

8. This Act shall come into force on January 1, 2000.

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