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Statutes of Newfoundland and Labrador 2005


CHAPTER 38

AN ACT TO AMEND THE TEACHERSí
PENSIONS ACT

(Assented to December 13, 2005)

Analysis


††††††† 1. S.2 Amdt.
Interpretation

††††††† 2.†† S.9 Amdt.
Repayment of contributions

††††††† 3. S.9.1 Added
Election upon termination

††††††† 4. S.22 Amdt.
Calculation of pension

††††††† 5. S.26.1 R&S
Indexing

††††††† 6. S.27.1 Added
Death of employee

††††††† 7. S.36 R&S
Marriage breakdown


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

SNL1991 c17
as amended

††††††† 1. (1) Subsection 2(1) of the Teachersí Pensions Act is amended by repealing paragraph (a.2) and substituting the following:

††††††††† (a.2)"commuted value" means commuted value as defined in the Pension Benefits Act, 1997;

††††††††† (a.3)"consumer price index" with respect to a year, means the average for each month of that year of the Consumer Price Index for Canada as published by Statistics Canada;

†††††††††††† (2)Paragraph 2(1)(k) of the Act is repealed and the following substituted:

†††††††††††† (k)"prescribed" means, except where the context otherwise indicates, prescribed by directives issued by the minister under section 42;

†††††††††††† (3)Subsection 2(1) of the Act is amended by striking out the word "and" at the end of paragraph (q) and adding immediately after that paragraph the following:

††††††††† (q.1)"terminating teacher" means a teacher 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 20(1) or (3); and

 

††††††† 2. Subsection 9(1) of the Act is repealed and the following substituted:

Repayment of contributions

††††††† 9. (1) A terminating teacher with less than 5 years of pensionable service may elect to receive a refund of his or her contributions, with interest at a rate prescribed.

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

 

††††††† 3. The Act is amended by adding immediately after section 9 the following:

Election upon termination

††††† 9.1 (1) A terminating teacher 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 teacher, in accordance with paragraph 40(1)(a) of the Pension Benefits Act, 1997;

†††††††††††† (b)a deferred pension in accordance with section 21; or

†††††††††††† (c)a return of the contributions made by the teacher, 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 teacher 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, under paragraph (a).

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

†††††††††††† (3)A teacher who elects or is considered to have elected under section (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 deferred life annuity shall, regardless of when the pensionable service was credited, be to a retirement arrangement approved for this purpose by the Superintendent of Pensions.

†††††††††††† (5)A transfer under paragraph (1)(a) shall not be less than the contributions made by the teacher, with interest at a rate prescribed.

†††††††††††† (6)Where a 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 teacher.

†††††††††††† (7)Where the annual pension payable is less than 4% of the YMPE for the calendar year in which the employment is terminated, a teacher or former teacher is entitled to receive a lump sum payment instead of the deferred pension under section 21.

†††††††††††† (8)Where the commuted value of a deferred pension benefit is less than 10% of the YMPE for the calendar year in which the employment is terminated, a teacher or former teacher is entitled to receive a lump sum instead of the deferred pension under section 21.

†††††††††††† (9)For the purposes of subsections (7) and (8), "YMPE" means the yearís maximum pensionable earnings as defined under the Canada Pension Plan.

 

††††††† 4. Section 22 of the Act is amended by adding immediately after subsection (1.2) the following:

††††††††† (1.3)Notwithstanding subsection (1), where the period of pensionable service credited includes service credited or eligible to be credited for a period before January 1, 1991 and purchased after January 1, 1991, the pension in respect of that pensionable service shall be the sum of

†††††††††††† (a)1.62% of the lesser of the average of the

††††††††††††††††††††† (i)teacher's highest 5 years of pensionable annual salary, and

†††††††††††††††††††† (ii)year's maximum pensionable earnings in the 3 years immediately before retirement; plus

†††††††††††† (b)2.22% of the excess of the average of the teacher's highest 5 years of pensionable annual salary over the average of the year's maximum pensionable earnings in the 3 years immediately before retirement

multiplied by the number of years and 1/10 of pensionable service credited after March 31, 1967 in respect of the pensionable service credited for the period before January 1, 1991 and purchased after January 1, 1991.

 

††††††† 5. Section 26.1 of the Act is repealed and the following substituted:

Indexing

†† 26.1 (1) A teachers' indexing account shall be established as a separate account within the pension fund to provide for the increase in the amount of pension or survivor benefits referred to in subsection (3).

†††††††††††† (2)The following amounts shall be allocated to the teachers' indexing account:

†††††††††††† (a).85% of the salary of every teacher to whom the pension plan applies from the money deducted under subsection 6(2); and

†††††††††††† (b)an amount equivalent to the amount under paragraph (a) from the contributions of the government of the province under subsection 8(1).

†††††††††††† (3)On September 1 in a year, the amount of pension or survivor benefit being paid to a person who has reached the age of 65 years 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 that previous calendar year,

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

†††††††††††† (4)Subsection (3) only applies to a pension or survivor benefit where the teacher to whom that pension or benefit relates retires after August 31, 1998.

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

†††††††††††† (6)Notwithstanding subsection (3), the amount of increase determined under subsection (3) shall be paid only to the extent that funds are available in the teachers' indexing account and in the event that the funds in the teachers' indexing account are insufficient to pay the full amount of the actuarial cost of the increase under subsection (3), the amount of the increase shall be reduced in accordance with subsection (7).

†††††††††††† (7)A reduction in the increase payable under subsection (3) shall be determined by the ratio of the funds in the teachers' indexing account to the actuarial cost of the increase under subsection (3).

†††††††††††† (8)For the purposes of subsections (6) and (7), the actuarial cost of the increase under subsection (3) shall be determined by the plan's actuary on September 1 of the year in which the adjustment under subsection (3) is made.

†††††††††††† (9)For the purposes of this section, the teachers' indexing account shall participate in the pension fund as if it were a plan defined under paragraph 2(c) of the Pensions Funding Act.

†††††††††† (10)Notwithstanding subsection (6), section 9 of the Pensions Funding Act does not apply to the teachers' indexing account required under subsection (1).

††††††††† (11)This section is considered to have come into force on September 1, 2002.

 

††††††† 6. The Act is amended by adding immediately after section 27 the following:

Death of employee

†† 27.1 (1) Where a teacher with at least 5 years of pensionable service dies before receiving a pension and a survivor benefit is payable under section 26, a surviving principal beneficiary may elect

†††††††††††† (a)to receive the survivor benefit in accordance with section 26; or

†††††††††††† (b)to receive in a lump sum

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

†††††††††††††††††††† (ii)the commuted value of the teacherís pension entitlement,

whichever is the greater.

†††††††††††† (2)Where a teacher with at least 5 years of pensionable service dies and there is no survivor benefit payable under section 26, the commuted value of the pension entitlement of the teacher, calculated as of the date of death, shall be transferred to the teacherís personal representative and subsections 9(3), (4) and (5) apply to the transfer.

 

††††††† 7. Section 36 of the Act is repealed and the following substituted:

Marriage breakdown

††††† 36. Where

†††††††††††† (a)a court has made an order for the division of matrimonial property under the Family Law Act or a similar order has been made by 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 right under this Act 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.