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Statutes of Newfoundland and Labrador 2015


CHAPTER 16

AN ACT TO AMEND THE TEACHERS'
PENSIONS ACT

(Assented to June 23, 2015)

Analysis


        1.   S.2 Amdt.
Interpretation

        2.   S.6 Amdt.
Contributions by teachers

        3.   S.8.1 R&S
Government payments

        4.   S.9.1 Amdt.
Election upon termination

        5.   S.13 Amdt.
Purchase of leave without pay

        6.   S.20 Amdt.
Early retirement

        7.   S.21 Amdt.
Deferred pension

        8.   S.22 R&S
22.   Calculation of pension
        for service before
        September 1, 2015
22.1 Calculation of pension
        for service after
        August 31, 2015
22.2 Pension amount
22.3 Retirement during
        school year

        9.   S.24 Amdt.
Re-employment

      10.   S.26.1 R&S
26.1 Indexing
26.2 Indexing- persons in
        receipt on coming into
        force of section
26.3 Indexing - persons in
        receipt after coming
        into force of section

      11.   S.30 Amdt.
Pension payments

      12.   Commencement


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

SNL1991 c17
as amended

        1. Subsection 2(1) of the Teachers' Pensions Act is amended by deleting the word "and" at the end of paragraph (q.1), by deleting the period at the end of paragraph (r) and substituting a semi-colon and the word "and", and by adding immediately after that paragraph the following:

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

 

        2. Paragraph 6(2)(a) of the Act is repealed and the following substituted:

             (a)  11.35% of that salary; and

 

        3. Section 8.1 of the Act is repealed and the following substituted:

Government payments

      8.1 (1) No earlier than April 1, 2016 and no later than August 31, 2016, where the government has entered into a joint sponsorship agreement that provides the framework for a corporation to be established to administer the pension plan and act as trustee of the fund to be established for the pension plan, the government shall deliver a fully enforceable promissory note to that corporation, when established, with the terms set out in this section.

             (2)  The promissory note shall amortize $1,862,000,000 over 30 years in equal annual payments of $135,000,000 beginning on August 31, 2016.

             (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 to be an asset of the plan.

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

 

        4. Subsection 9.1(9) of the Act is repealed.

 

        5. Subsection 13(2) of the Act is amended by deleting the reference "section 22" and substituting the reference "sections 22 and 22.1".

 

        6. (1) Subsection 20(1) of the Act is amended by deleting the reference "section 22" and substituting the reference "sections 22 and 22.1".

             (2)  Subsection 20(4) of the Act is amended by deleting the reference "section 22" and substituting the reference "sections 22 and 22.1".

 

        7. Subsection 21(1) of the Act is amended by deleting the reference "section 22" and substituting the reference "sections 22 and 22.1".

 

        8. Section 22 of the Act is repealed and the following substituted:

Calculation of pension for service before September 1, 2015

      22. (1) For service credited before September 1, 2015, pensionable salary shall be the greater of the average of the teachers' highest 5 years salary calculated at August 31, 2015 and the average of the teachers' highest 8 years salary calculated at the date of termination or retirement.

             (2)  A pension awarded to a teacher is the sum of

             (a)  1.4% of the lesser of

                      (i)  the teacher's pensionable salary, and

                     (ii)  the average of the YMPE in the 3 years immediately before retirement; plus

             (b)  2% of the excess of the teacher's pensionable salary over the average of the YMPE in the 3 years immediately before retirement,

multiplied by the number of years and 1/10 years of pensionable service credited after March 31, 1967 and before September 1, 2015.

             (3)  A bridge benefit shall be paid to a teacher who retires before attaining the age of 65 and that bridge benefit shall be, subject to limitations imposed under the Income Tax Act (Canada), equal to 0.6% of the lesser of the teacher's pensionable salary and the average of the YMPE in the 3 years immediately before retirement multiplied by the number of years and 1/10 years of pensionable service credited after March 31, 1967 and before September 1, 2015.

             (4)  A bridge benefit paid under subsection (3) shall cease on the last day of the month in which the teacher who receives that benefit attains the age of 65 years.

             (5)  Notwithstanding subsection (2), where the period of pensionable service credited includes service credited or eligible to be credited for a period before January 1, 1991 and purchased on or after January 1, 1991 and before September 1, 2015, the pension in respect of that pensionable service shall be the sum of

             (a)  1.62% of the lesser of

                      (i)  the teacher's pensionable salary, and

                     (ii)  the average of the YMPE in the 3 years immediately before retirement; plus

             (b)  2.22% of the excess of the teacher's pensionable salary over the average of the YMPE 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 on or after January 1, 1991 and before September 1, 2015.

             (6)  Notwithstanding subsection (2), a teacher's accumulated percentage of pensionable service earned before the commencement of this section is protected by this Act except that the amount that is 0.6% of the lesser of the teacher's pensionable salary and the average of the YMPE in the 3 years before retirement multiplied by the number of years and 1/10 years of pensionable service credited after March 31, 1967 shall, subject to the limitations imposed under the Income Tax Act (Canada), be treated as a bridge benefit that ceases upon attaining 65 years of age.

             (7)     Notwithstanding subsection (2), where the contribution to the pension plan of the government of the province is reduced under this Act and a teacher or former teacher affected by the reduction does not make a compensating contribution under this Act, the formula set out in subsection (2) respecting the calculation of an award of pension shall be adjusted to reduce the teacher's or former teacher's award of pension proportionately.

Calculation of pension for service after August 31, 2015

   22.1 (1) For service credited after August 31, 2015, pensionable salary shall be the average of the teachers' highest 8 years' salary.

             (2)  A pension awarded to a teacher is the sum of

             (a)  1.4% of the lesser of

                      (i)  the teacher's pensionable salary, and

                     (ii)  the average of the YMPE in the 3 years immediately before retirement; plus

             (b)  2% of the excess of the teacher's pensionable salary over the average of the YMPE in the 3 years immediately before retirement,

multiplied by the number of years and 1/10 years of pensionable service credited after August 31, 2015.

             (3)  A bridge benefit shall be paid to a teacher who retires before attaining the age of 65 and that bridge benefit shall be, subject to limitations imposed under the Income Tax Act (Canada), equal to 0.6% of the lesser of the average of the teacher's pensionable salary and the average of the YMPE in the 3 years immediately before retirement multiplied by the number of years and 1/10 years of pensionable service credited after August 31, 2015.

             (4)  A bridge benefit paid under subsection (3) shall cease on the last day of the month in which the teacher who receives that benefit attains the age of 65 years.

             (5)  Notwithstanding subsection (2), where the period of pensionable service credited includes service eligible to be credited for a period before January 1, 1991 and purchased after August 31, 2015, the pension in respect of that pensionable service shall be the sum of

             (a)  1.62% of the lesser of

                      (i)  the teacher's pensionable salary, and

                     (ii)  the average of the YMPE in the 3 years immediately before retirement; plus

             (b)  2.22% of the excess of the teacher's pensionable salary over the average of the YMPE in the 3 years immediately before retirement

multiplied by the number of years and 1/10 of pensionable service credited after August 31, 2015 in respect of the pensionable service eligible to be credited for the period before January 1, 1991 and purchased after August 31, 2015.

Pension amount

   22.2 (1) Where a teacher has service credited before September 1, 2015 and after August 31, 2015, the teacher's pension shall be the sum of the amounts calculated under section 22 and 22.1.

             (2)  Notwithstanding subsections 22(3), 22(6) and 22.1(3), the amount equal to the bridge benefit calculated under those subsections shall continue after a teacher has attained the age of 65 years only in respect of years and 1/10 years of pensionable service credited after March 31, 1967 that exceed 35 years or while a teacher was a member of a religious order.

Retirement during school year

   22.3 (1) Commencing on September 1, 1998, teachers may elect to retire during the school year only if they have completely accumulated the required number of years of pensionable service necessary for eligibility for a pension.

             (2)  At the end of a school year, teachers who require 5/10 or less of a year of pensionable service in order to qualify for a pension, may elect to retire but that benefit shall be determined by the number of years and tenths of years of pensionable service accumulated to the date of retirement.

             (3)  For the purposes of subsections 22(2) and (5) and 22.1(2), 1/10 part of a year of pensionable service shall be credited as prescribed.

             (4)  For the purposes of subsections 22(2) and (5) and 22.1(2), not more than 10 1/10 parts of a year of pensionable service may be credited in a teaching year, and where fewer than 10 1/10 parts of a year of pensionable service are credited in a teaching year, that fraction may be added to fractions credited in other teaching years for the purpose of computing pensionable service.

 

        9. Subsection 24(3) of the Act is amended by deleting the reference "section 22" and substituting the reference "sections 22 and 22.1".

 

      10. 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 sections 26.2 and 26.3.

             (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)  Section 26.2 only applies to a pension or survivor benefit where the teacher to whom that pension or benefit relates retired after August 31, 1998.

             (4)  The amount of increase determined under subsection 26.2(2) and 26.3(2) 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 subsections 26.2(2) and 26.3(2), the amount of the increase shall be reduced in accordance with subsection (5).

             (5)  A reduction in the increase payable under subsections 26.2(2) and 26.3(2) shall be determined by the ratio of the funds in the teachers' indexing account to the total actuarial cost of the increase under subsections 26.2(2) and 26.3(2).

             (6)  For the purposes of subsections (4) and (5), the total actuarial cost of the increase under subsections 26.2 (2) and 26.3(2) shall be determined by the plan's actuary on September 1 of the year in which the adjustments are made.

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

             (8)  Notwithstanding subsection (4), section 9 of the Pensions Funding Act does not apply to the teachers' indexing account required under subsection (1).

Indexing - persons in receipt on coming into force of section

   26.2 (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 this section.

             (2)  On September 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

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

             (2)  On September 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).

 

      11. Paragraphs 30(1)(a) and (b) of the Act are amended by deleting the reference "section 22" wherever it appears and substituting the reference "sections 22 and 22.1".

Commencement

      12. This Act comes into force on a day to be proclaimed by the Lieutenant-Governor in Council.