Vol. 145, No. 13 — June 22, 2011

Registration

SOR/2011-122 June 10, 2011

ROYAL CANADIAN MOUNTED POLICE PENSION CONTINUATION ACT
FINANCIAL ADMINISTRATION ACT

ARCHIVED — Royal Canadian Mounted Police (Dependants) Pension Fund Increase in Benefits Order

T.B. 836109 June 9, 2011

Whereas it appears from a report made under section 56 of the Royal Canadian Mounted Police Pension Continuation Act (see footnote a) that the Royal Canadian Mounted Police (Dependants) Pension Fund is substantially in excess of the amount required to make adequate provision for the prospective payments out of it;

Therefore, the Treasury Board, on the recommendation of the Minister of Public Safety and Emergency Preparedness, pursuant to subsection 57(1) of the Royal Canadian Mounted Police Pension Continuation Act (see footnote b) and paragraph 7(2)(e) of the Financial Administration Act (see footnote c), hereby makes the annexed Royal Canadian Mounted Police (Dependants) Pension Fund Increase in Benefits Order.

ROYAL CANADIAN MOUNTED POLICE (DEPENDANTS) PENSION FUND INCREASE IN BENEFITS ORDER

1. The following pension benefits, as provided in Part IV of the Royal Canadian Mounted Police Pension Continuation Act R.S.C. 1970, c. R-10 shall be increased in the following manner:

  1. (a) pensions for current and prospective widows and children shall be increased by 2 % in each of the 2011, 2012 and 2013 plan years, as of April 1 of each plan year;
  2. (b) lump sum benefits payable on the death of a member shall be increased by 2 % in each of the 2011, 2012 and 2013 plan years, as of April 1 of each plan year; and
  3. (c) residual amounts payable on the death of a widow of a member shall be calculated with a deemed increase in the member’s contributions, without crediting the contributions with interest, of
    1. (i) 1,173 % if the widow’s death occurs in the 2012 plan year,
    2. (ii) 1,198 % if the widow’s death occurs in the 2013 plan year, and
    3. (iii) 1,224 % if the widow’s death occurs in the 2014 plan year.

2. This Order comes into effect on April 1, 2011.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Order.)

Issue

This Order provides for benefit increases to recipients of the Royal Canadian Mounted Police (Dependants) Pension Fund by distributing the surplus of the Fund as recommended by the Office of the Superintendent of Financial Institutions.

Description

The benefit plan associated with the Royal Canadian Mounted Police (Dependants) Pension Fund was established in 1934. Plan membership was compulsory for constables appointed from 1934 to 1948. Thereafter, the plan was essentially closed to new entrants. The last plan member retired from active duty in 1987. In 1948, Part V (a new pension arrangement) was added to the Royal Canadian Mounted Police Act. In 1959, the Royal Canadian Mounted Police Superannuation Act and the Royal Canadian Mounted Police Pension Continuation Act were enacted to provide for all RCMP pension arrangements. Part V of the Royal Canadian Mounted Police Act was renamed the Royal Canadian Mounted Police Pension Continuation Act.

On March 31, 2010, the Actuarial Report, prepared by the Office of the Superintendent of Financial Institutions, revealed an actuarial surplus of $2.7 million. The Actuarial Report recommends that $1.1 million of the actuarial surplus be distributed in the form of benefit improvements to recipients as follows:

  1. (a) a pension increase for current and prospective widows and children of 2.0% as at April 1, 2011, April 1, 2012, and April 1, 2013;
  2. (b) an increase in the lump sum benefit payable upon the death of a member of 2.0% as at April 1, 2011, April 1, 2012, and April 1, 2013; and
  3. (c) an increase in the residual amount payable on the death of a widow of a member who dies in the 2012, 2013 or 2014 plan years, obtained by deeming the member’s contributions, which have not been credited with interest, to be increased by 1 173%, 1 198% and 1 224% respectively.

On March 31, 2010, the number of widows who were recipients of benefits under the Royal Canadian Mounted Police (Dependants) Pension Fund was 144.

Alternatives

The distribution of the surplus under the Royal Canadian Mounted Police (Dependants) Pension Fund is specified in statute. There is no alternative but to make this Order.

Benefits and costs

The plan is entirely financed through the Royal Canadian Mounted Police (Dependants) Pension Fund, which forms part of the Public Accounts of Canada. The Fund is

  1. (a) credited with all contributions made by members;
  2. (b) charged with the benefit payments made; and
  3. (c) credited with interest earnings.

The source of funds for the benefit improvements to recipients is the actuarial surplus.

Consultation

External consultation took place with the Office of the Superintendent of Financial Institutions, the Treasury Board Secretariat and the Department of Finance. All of these organizations were supportive of the recommendation to distribute the Fund’s surplus in the form of increased benefits to recipients.

Compliance and enforcement

The normal legislative, regulatory and administrative compliance structures will apply, including internal audits, the usual reports to Parliament and responses to enquiries received from members of Parliament, affected plan members and their representatives.

The financial statements will be produced by the Pension Accounting Unit at National Compensation Services of the Royal Canadian Mounted Police, as part of the normal pension accounting operations of the plan.

Contact

Superintendent Gilles Moreau
Acting Director General
National Compensation Services
Royal Canadian Mounted Police
73 Leikin Drive
Ottawa, Ontario
K1A 0R2
Telephone: 613-843-6039
Email: Gilles.Moreau@rcmp-grc.gc.ca

Footnote a
R.S.C. 1970, c. R-10

Footnote b
R.S.C. 1970, c. R-10

Footnote c
R.S., c. F-11