Vol. 150, No. 26 — December 28, 2016
SOR/2016-315 December 16, 2016
DEPARTMENT OF EMPLOYMENT AND SOCIAL DEVELOPMENT ACT
Regulations Amending the Department of Employment and Social Development Regulations
P.C. 2016-1152 December 16, 2016
His Excellency the Governor General in Council, on the recommendation of the Minister of Employment and Social Development, pursuant to paragraph 43(b) (see footnote a) of the Department of Employment and Social Development Act (see footnote b), makes the annexed Regulations Amending the Department of Employment and Social Development Regulations.
Regulations Amending the Department of Employment and Social Development Regulations
1 Section 3.1 of the Department of Employment and Social Development Regulations (see footnote 1) is amended by striking out “and” at the end of paragraph (e), by adding “and” at the end of paragraph (f) and by adding the following after paragraph (f):
- (g) the Department of Public Works and Government Services, for the administration or enforcement of any of the following Acts:
- (i) Public Service Superannuation Act,
- (ii) Canadian Forces Superannuation Act, and
- (iii) Royal Canadian Mounted Police Superannuation Act.
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.)
Public Service, Canadian Armed Forces and Royal Canadian Mounted Police (RCMP) pension plans are administered by the Department of Public Works and Government Services (PWGSC). These pension plans include provisions to require a reduction of a pension plan member’s annuity if the member is also in receipt of a Canada Pension Plan (CPP) disability pension and provide for a survivor pension following the death of a member. In order for PWGSC to act upon these pension provisions, PWGSC must be made aware of a member’s death or receipt of a CPP disability benefit. The current consent-based exchange of information between the PWGSC and the Department of Employment and Social Development (ESDC) is done on a quarterly basis. The current consent-based process is cumbersome, slow and has resulted in overpayments.
Currently, information is exchanged based on consent forms completed at the time of application for a superannuation pension with PWGSC. Pension plan members (pensioners) provide their consent for PWGSC to exchange their personal information with ESDC upon retirement by completing a “Pension Information Release” form when they are applying for superannuation. While consent provides authority for disclosure, it is inefficient as PWGSC must provide a copy of the signed consent form for each pensioner to ESDC. In addition, pensioners bear the burden and costs associated with the printing and mailing of the consent forms.
A consent-based electronic data exchange process between PWGSC and ESDC, specific to the CPP, has been in place since 2006, and a consent-based manual data exchange process has been in place since at least 1996. This exchange identifies pensioners in receipt of the Public Service Superannuation Act (PSSA) or the Canadian Forces Superannuation Act (CFSA) pension benefits who are also receiving a CPP disability pension. The Royal Canadian Mounted Police Superannuation Act (RCMPSA) pension benefits were administered by a private contracted company until July 2014, at which point the plan began being administered by PWGSC; hence, it was not initially included in the PWGSC data exchange process described above.
Because the information match is undertaken quarterly, the onus is on the pensioners to remember that it is their responsibility to advise their superannuation plan administrator when and if they become CPP disability pension beneficiaries. To qualify for a CPP disability pension, which is a taxable monthly benefit, individuals must have a severe and prolonged disability within the meaning of the CPP, be under the age of 65 and have made sufficient CPP contributions.
The superannuation pension plans for the Public Service, Canadian Armed Forces and RCMP include provisions that require a reduction of the annuity if the retiree is also in receipt of a CPP disability pension. Pensioners may omit or be unable to inform PWGSC of their CPP disability pension. This can result in overpayments of superannuation benefits, requiring PWGSC to then recover the monies from the pensioner, which may cause difficulties for the pensioner. Each year, on the basis of the data exchanged, PWGSC discovers an average of 700 pension accounts with disability-related overpayments totalling approximately $2.9 million. In addition, should the pensioner refuse to sign the consent form, or if it is not received on time, they are automatically assumed to be receiving a CPP disability pension and their retirement pension is reduced accordingly, which may result in underpayments.
A significant number of overpayments are also a result of PWGSC not being notified of deaths. PWGSC frequently learns about the death of a pensioner or their survivors many months after the fact and solely relies on notification of death by the family and/or estate. Conversely, ESDC often receives more timely notifications of death, as the CPP provides for a death benefit and survivor benefits. In addition, ESDC receives death notifications from various other sources to maintain program integrity and the Social Insurance Registry. However, ESDC does not currently share death notifications with PWGSC.
When a superannuation beneficiary dies, a family member may not immediately notify PWGSC to discontinue superannuation payments, which results in overpayments. Between 2004 and September 2013, PWGSC identified 1 563 PSSA cases as overpaid due to a delayed notification of death, and these overpayments totalled $16.3 million. These monies are not always recoverable which negatively impacts the superannuation pension plans that are funded through deductions from employees’ pay and from an employer share and must be covered through employee and employer contributions.
The intended objective of this amendment is a more timely, simplified and expedited information exchange to reduce or avoid overpayments, by relying on section 35 of the Department of Employment and Social Development Act (DESDA) and the Information Sharing Agreement (ISA).
Section 3.1 of the Department of Employment and Social Development Regulations (DESD Regulations) is amended to include PWGSC as a prescribed federal institution to which information that is obtained under the CPP, or prepared from information that is obtained under the CPP, may be made available for the administration or enforcement of the pension plans relating to the PSSA, the CFSA and the RCMPSA (together referred to as superannuation legislation). This superannuation legislation applies to employees of the core federal public service, certain Crown corporations, members of the Canadian Armed Forces, and employees of the RCMP.
The DESD Regulations are amended and the authority for the information exchange is provided. This permits implementation of the ISA with PWGSC, pursuant to subsection 35(1) of the DESDA.
The “One-for-One” Rule does not apply to these amendments, as there is no change in administrative costs to business.
Small business lens
The small business lens does not apply to these amendments, as there are no costs on small business.
PWGSC confirmed its support for these amendments and is working closely with ESDC to improve the sharing of information. The public was provided with a 30-day comment period following publication in the Canada Gazette, Part I, on March 5, 2016, and no comments were received. Also, the regulatory proposal and privacy impact assessment (PIA) were shared with the Office of the Privacy Commissioner and no comments were received.
An ISA between ESDC and PWGSC to permit simplification and streamlining of the exchange of information takes effect on the date the regulatory amendment comes into force. The need for a paper-based form providing client consent will be eliminated, and the ISA between the departments will specify the information-sharing parameters including privacy protection requirements of sharing only minimal information required by PWGSC, such as the social insurance number, name and CPP disability pension start and end dates. This amendment is intended to increase efficiency in the calculation of superannuation amounts for PWGSC. As well, the administrative burden associated with the consent forms will be eliminated. In 2013, the volume of forms totalled 12 000 for the PSSA, 1 350 for the RCMPSA, and 3 400 for the CFSA.
ESDC seeks to make business processes more efficient and effective, with the intent of ensuring that Canadian taxpayers receive maximum value for the use of public funds. Accordingly, economic business practices will be adopted to streamline or eliminate cumbersome, slow and unnecessary paper-based processes, by collaborating with partners and by adopting alternative approaches that are both more user-friendly and efficient. It is expected that monthly exchanges of pertinent data will be more timely and will increase efficiency through improved and automated processes.
ESDC has undertaken a PIA to identify privacy risks and associated mitigation related to the management and protection of personal information for the improved information exchange between ESDC and PWGSC.
Implementation, enforcement and service standards
The Regulations Amending the Department of Employment and Social Development Regulations took effect upon registration.
CPP Policy and Legislation
Seniors and Pensions Policy Secretariat
Employment and Social Development Canada
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