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First
Session, 49th General Assembly 69 Elizabeth II, 2020 |
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AN ACT TO
AMEND THE PENSION BENEFITS ACT, 1997 |
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Received and Read the First Time.................................................................................................. |
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Second |
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Committee........................................................................................................................................... |
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Third |
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Royal Assent...................................................................................................................................... |
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HONOURABLE SARAH STOODLEY Minister
of Digital Government and Service Newfoundland and Labrador |
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Ordered
to be printed by the Honourable House of Assembly |
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EXPLANATORY NOTES This Bill would amend the Pension Benefits Act, 1997 to · allow a person who had previously transferred his or her pension benefit to a class or type of retirement savings arrangement approved by the superintendent to withdraw from the retirement savings arrangement an amount not exceeding a prescribed amount where the person is experiencing a circumstance of financial hardship and satisfies the prescribed requirements; and · allow a person who had previously transferred his or her pension benefit to a class or type of retirement savings arrangement approved by the superintendent to withdraw the full amount held in the retirement savings arrangement where the person has resided outside Canada for at least 2 consecutive calendar years and satisfies the prescribed requirements. A BILL AN ACT TO AMEND THE PENSION BENEFITS ACT, 1997 Analysis 1.
S.2 Amdt. 2.
Ss. 44.1 & 44.2 Added 3. Commencement Be it enacted by the Lieutenant-Governor and House of Assembly in Legislative Session convened, as follows: SNL1996 cP-4.01 1. Section 2 of the Pension Benefits Act, 1997 is amended by adding immediately after paragraph (dd.1) the following: (dd.2) "principal residence" means the property in which a person is ordinarily resident; 2. The Act is amended by adding immediately after section 44 the following: Withdrawal – financial hardship 44.1 (1) A
former member or a surviving principal beneficiary of a member or former member
who has transferred the commuted value of his or her pension benefit to a class
or type of retirement savings arrangement approved by the superintendent may,
in accordance with this section, make a withdrawal from the retirement savings
arrangement where he or she (a) is experiencing a circumstance of financial hardship prescribed in subsection (3); and (b) provides the documentation prescribed in the
regulations. (2) A person referred to in subsection (1) may withdraw an amount not exceeding an amount prescribed in subsection (4) from each retirement savings arrangement owned by the person once within a calendar year for each circumstance of financial hardship. (3) For the purpose of subsection (1), a person referred to in subsection (1) is experiencing a circumstance of financial hardship where (a) the person's expected total income for the one year period following the date on which the person seeks to make the withdrawal is not more than 66.66% of the YMPE for the year in which the person seeks to make the withdrawal; (b) the person is unable to pay for medical expenses incurred or to be incurred by the person, the person's principal beneficiary or a dependent of either and the medical expenses are not paid by and are not subject to reimbursement from any other source; (c) the person is unable to pay for disability
related expenses incurred or to be incurred by the person, the person's
principal beneficiary or a dependent of either and the expenses are not paid by
and are not subject to reimbursement from any other source; (d) the person or the person's principal
beneficiary has received a written notice in respect of a default on a mortgage
that is secured against the principal residence of the person or the person's
principal beneficiary and there is a risk of foreclosure or power of sale if
the default is not rectified; (e) the person or the person's principal beneficiary has received a written notice in respect of arrears in the payment of rent for the principal residence of the person or the person's principal beneficiary and the person or the principal beneficiary could be evicted if the arrears remain unpaid; or (f) the person is unable to pay the first month's rent and the security deposit required to rent a principal residence for the person or his or her principal beneficiary. (4) For the purpose of subsection (2), the prescribed amount is the total of (a) the amount for the applicable circumstance of financial hardship as follows: (i) for a circumstance referred to in paragraph (3)(a), the amount determined by subtracting 75% of the expected total income referred to in paragraph (3)(a) from 50% of the YMPE for the year in which the person seeks to make the withdrawal, (ii) for a circumstance referred to in paragraph (3)(b), the amount required to pay the medical expenses incurred or to be incurred in the one year period following the date on which the person seeks to make the withdrawal, (iii) for a circumstance referred to in paragraph (3)(c),
the amount required to pay the disability related expenses incurred or to be
incurred in the one year period following the date on which the person seeks to
make the withdrawal, (iv) for a circumstance referred to in paragraph (3)(d), the amount required to rectify the default, (v) for a circumstance referred to in paragraph (3)(e), the amount required to pay the rental arrears, and (vi) for a circumstance referred to in paragraph (3)(f), the amount required to pay the first month's rent and the security deposit; and (b) the amount of any applicable withholding tax. (5) Notwithstanding subsection (1), a person referred to in subsection (1) is not entitled to make the withdrawal and the savings institution or insurance company shall not allow the withdrawal unless (a) the person confirms in writing that he or she has been advised of and understands the impacts of making the withdrawal as set out in a directive of the superintendent; and (b) where the person is a former member and has a principal beneficiary, the principal beneficiary consents to the withdrawal in the form and manner determined by the superintendent. (6) A savings institution or insurance company that has filed with the superintendent a specimen contract for a retirement savings arrangement that complies with this Act and the regulations shall submit a report to the superintendent in accordance with subsection (7) stating (a) the number; and (b) the total amount, of the withdrawals that were made under this section for each circumstance of financial hardship during the period of the report. (7) A report referred to in subsection (6) shall be submitted on or before (a) September 30 each year for the 6 month period ending on June 30; and (b) March 31 each year for the 6 month period
ending on December 31 of the previous year. Withdrawal – non-resident 44.2 (1) A former member or a surviving principal beneficiary of a member or former member who has transferred the commuted value of his or her pension benefit to a class or type of retirement savings arrangement approved by the superintendent may withdraw the full amount held in the retirement savings arrangement where he or she (a) has resided outside Canada for at least 2 consecutive calendar years; and (b) provides the documentation prescribed in the regulations. (2) Notwithstanding subsection (1), where the person is a former member and has a principal beneficiary the person is not entitled to make the withdrawal and the savings institution or insurance company shall not allow the withdrawal unless the principal beneficiary consents to the withdrawal in the form and manner determined by the superintendent. Commencement 3. This Act comes into force on March 1, 2021. ©Queen's Printer |