Vol. 148, No. 24 — November 19, 2014
SOR/2014-249 October 31, 2014
PUBLIC SERVICE SUPERANNUATION ACT
Regulations Amending the Supplementary Death Benefit Regulations
P.C. 2014-1170 October 30, 2014
His Excellency the Governor General in Council, on the recommendation of the President of the Treasury Board, pursuant to paragraph 61(1)(b) of the Public Service Superannuation Act (see footnote a), makes the annexed Regulations Amending the Supplementary Death Benefit Regulations.
REGULATIONS AMENDING THE SUPPLEMENTARY DEATH BENEFIT REGULATIONS
1. Schedule III to the Supplementary Death Benefit Regulations (see footnote 1) is amended by adding the following in alphabetical order:
Canadian Nuclear Laboratories Ltd.
COMING INTO FORCE
2. These Regulations come into force on the day on which they are registered.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
As part of the restructuring of Atomic Energy of Canada Limited (AECL), the majority of its employees will be reorganized to Canadian Nuclear Laboratories Ltd. (CNLL), a wholly-owned subsidiary of AECL. Since the CNLL is now a participating employer in the Public Service Pension Plan, reorganized employees will automatically be entitled to supplementary death benefits provided under Part II of the Public Service Superannuation Act (the Act). However, AECL employees currently have supplementary death benefit coverage with a private insurer, and are excluded from public sector entitlements. After the AECL employees are reorganized to CNLL, it is intended that their private supplementary death benefit coverage will be maintained. Therefore, the death benefit provided under the Act would be duplicative, and is not required. In order to exclude CNLL employees from coverage under the public supplementary death benefit plan, CNLL must be added to Schedule III of the Supplementary Death Benefit Regulations (the Regulations).
In June 2012, the Government of Canada made the decision to restructure AECL’s nuclear laboratories with a view to increasing operational rigour and operate the nuclear laboratories more efficiently and effectively through private sector management.
In November 2013, the Government of Canada decided to implement a Government-owned contractor-operated arrangement that will see AECL’s operations and virtually all of its approximately 3 300 personnel transition to a site operating company until a private sector operator is in place. AECL incorporated CNLL as a wholly-owned subsidiary to be this site operating company on May 30, 2014. The CNLL subsequently became a participating employer in the Public Service Pension Plan on July 31, 2014.
The designated beneficiary of every employee who is a member in the Public Service Pension Plan is, by default, entitled to a supplementary death benefit under Part II of the Act in the event of a member’s death while he/she is employed in the public service. Under certain circumstances, the supplementary death benefit may also be awarded to a beneficiary where the member’s death occurs after they cease to be employed in the public service. Both employees and their employer are required to pay premiums in respect of supplementary death benefit.
Employees of Crown corporations or public boards may be excluded from application of the legislated supplementary death benefit; in order to do so, it must be listed in Schedule III of the Regulations.
Since April 1, 1990, AECL employees have been excluded from Part II of the Act. At the time, AECL sought exclusion in order to provide its employees with coverage under a private and commercially available death benefit plan. All AECL employees who will be reorganized to CNLL are currently covered under a commercial death benefit plan and it is intended that this coverage will continue after their transition to CNLL.
The objective of this regulatory amendment is to ensure that there is no change to the death benefit coverage for those employees who will be reorganized from AECL to CNLL. This will contribute to the Government of Canada’s overall objective of ensuring that the reorganization of AECL does not unduly impact affected employees.
The Regulations are amended to add CNLL to Schedule III of the Regulations. With the coming into force of this amendment, CNLL is excluded from the application of Part II of the Act.
The “One-for-One” Rule does not apply to this amendment, because it does not impose administrative burden on business.
Small business lens
The small business lens does not apply to this amendment, as there is no impact on small business.
Consultations have occurred throughout the restructuring process with affected stakeholders. In particular, AECL management has engaged its employees and the unions that represent them throughout the restructuring process to inform them on how the process will affect them.
It is expected that CNLL employees will be supportive of this amendment, as it is being made as part of an overall strategy to sustain their existing benefits (to the extent possible) when they are reorganized from AECL to CNLL. This amendment will also ensure that employees and CNLL do not pay additional death benefit premiums, as it will take effect before the employees are reorganized.
The Act authorizes the making of regulations excluding any Crown corporation from the operation of Part II of the Act, where appropriate. The addition of CNLL to Schedule III of the Regulations is the only way to ensure reorganized employees continue to be exempt from the Public Service Pension Plan supplementary death benefit and do not pay additional premiums for redundant coverage.
Where possible, the Government of Canada has an interest in minimizing the impact on AECL employees that are being re-organized into CNLL.
The pension accounts of reorganized employees will continue to be administered on an ongoing basis; therefore, there is no incremental increase to administrative costs as a result of this amendment.
Pension Policy and Programs
Pensions and Benefits Sector
Treasury Board of Canada Secretariat