Vol. 150, No. 14 — July 13, 2016

Registration

SOR/2016-203 June 23, 2016

PUBLIC SERVICE SUPERANNUATION ACT
FINANCIAL ADMINISTRATION ACT

Regulations Amending Certain Regulations Made Under the Public Service Superannuation Act

The Treasury Board, on the recommendation of the President of the Treasury Board, makes the annexed Regulations Amending Certain Regulations Made Under the Public Service Superannuation Act, pursuant to

(a) subsection 42(1) (see footnote a) and sections 42.1 (see footnote b) and 71 (see footnote c) of the Public Service Superannuation Act (see footnote d); and

(b) paragraph 7(2)(a) of the Financial Administration Act (see footnote e).

Regulations Amending Certain Regulations Made Under the Public Service Superannuation Act

Amendments

Public Service Superannuation Regulations

1 The long title of the Public Service Superannuation Regulations (see footnote 1) is replaced by the following:

Public Service Superannuation Regulations

2 Section 1 of the Regulations and the heading before it are repealed.

3 (1) The portion of subsection 4(1) of the Regulations before paragraph (a) is replaced by the following:

4 (1) The kind of superannuation or pension benefit referred to in subsection 5(5) of the Act is one that

(2) The portion of subsection 4(2) of the Regulations before paragraph (a) is replaced by the following:

(2) The kind of superannuation or pension benefit referred to in paragraph 8(2)(a) of the Act is one that

4 Subsections 6(6) and (7) of the Regulations are replaced by the following:

(6) If the person demonstrates that the monthly deductions referred to in paragraph (2)(b) would cause financial hardship to the person, lesser monthly deductions shall be made, commencing the month after the date of a notice from the Minister, but the deductions shall not be less than 5% of the gross monthly amount of the annuity or annual allowance, or $10, whichever is greater.

(7) Subsection (6), as it read before the day on which section 107 comes into force, continues to apply to persons whose annuity or annual allowance was, before that day, subject to monthly deductions calculated in accordance with that subsection.

5 Section 6.1 of the Regulations is repealed.

6 The portion of subsection 7.2(6) of the Regulations before paragraph (a) is replaced by the following:

(6) Despite subsections (1) to (5), if payment under one of those subsections would cause financial hardship to the contributor or any other recipient, they may choose to pay the amount payable

7 Section 8 of the Regulations is repealed.

8 Section 12 of the Regulations is repealed.

9 Paragraph 13.3(1)(b) of the Regulations is replaced by the following:

(b) owing to circumstances that were not foreseen by them at the time of the making of the election, the making of the payment required under section 13.2 would cause them financial hardship.

10 Section 14 of the Regulations is replaced by the following:

14 (1) Every election made under Part I of the Act shall be delivered or mailed to the Minister.

(2) The date of the election is the day on which it is delivered or, if it is mailed, the day on which it is mailed and the postmark is evidence of that day.

11 (1) The portion of subsection 18(1) of the Regulations before paragraph (a) is replaced by the following:

18 (1) A contributor who elected to pay for a period of service may revoke the election in whole or in part

(2) Paragraphs 18(1)(b) to (d) of the Regulations are replaced by the following:

(b) as to payments to be made for the period of service mentioned in the election if each payment is not less than 2% of their gross monthly salary and if, owing to circumstances beyond the control of and unforeseeable by them at the time they made the election, financial hardship would be caused to them if they were required to continue to pay for that service;
(c) as to payments to be made for the period of service mentioned in the election if, at the commencement date of their annuity or annual allowance, the monthly instalments that the contributor pays are greater than the increase, calculated in accordance with section 11 of the Act, in the monthly amount of the benefits payable that results from the election;
(d) after the contributor becomes entitled to an immediate annuity, as to payments to be made for the period of service mentioned in the election if the monthly instalments that the contributor pays are greater than the increase, calculated in accordance with section 11 of the Act, in the monthly amount of the benefits payable that would result from the election if the contributor were to begin to receive an immediate annuity;

(3) Paragraph 18(1)(f) of the Regulations is repealed.

(4) Paragraph 18(5)(a) of the Regulations is replaced by the following:

(a) if the contributor has revoked the election in whole under paragraph (1)(a) or (h), it shall be refunded to them;

12 (1) The portion of section 19 of the Regulations before paragraph (a) is replaced by the following:

19 A contributor who has received erroneous or misleading information may revoke an option that they have exercised under section 12, 12.1, 13 or 13.001 of the Act or are deemed to have exercised under paragraph 10(5)(a) or (b) of the Act, or an option that they have exercised in favour of the transfer value referred to in section 13.01 of the Act, and exercise a new option if

(2) Paragraph 19(b) of the Regulations is replaced by the following:

(b) the erroneous or misleading information was in respect of the amount, nature or type of any benefit provided under section 12, 12.1, 13, 13.001 or 13.01 of the Act, of the procedures required to be followed to constitute a valid exercise of an option or of an agreement referred to in subsection 40(2) or 40.2(2) of the Act.

13 Sections 19.1 and 20 of the Regulations are replaced by the following:

19.1 An option may only be revoked under section 19 and a new option exercised under section 12, 12.1, 13 or 13.001 of the Act, or a new option exercised in favour of the transfer value referred to in section 13.01 of the Act, if

(a) the contributor applies to the Minister to revoke the option and to exercise a new option within three months after the day on which they became aware that erroneous or misleading information was given;
(b) the contributor would have chosen a different benefit or would have exercised the option at an earlier time if no erroneous or misleading information had been given;
(c) in the case of a contributor who exercised an option under section 12, 12.1, 13 or 13.001 of the Act, any payment made to them as a result of the exercise of the option is, subject to section 20, repaid by them within three months after the date of a written notice advising them of the amount to be repaid, or in the case of a contributor who exercised an option in favour of the transfer value referred to in section 13.01 of the Act, any payment made as a result of the exercise of the option is repaid within six months after the date of the notice;
(d) any payment made to the contributor under the Retirement Compensation Arrangements Regulations, No. 1 as a result of the exercise of the option is repaid to the Retirement Compensation Arrangements Account established under the Special Retirement Arrangements Act within the same time limits as provided for the repayment of the benefit under paragraph (c); and
(e) in the case of a contributor who seeks to revoke an option in favour of the transfer value referred to in section 13.01 of the Act based on having received erroneous or misleading information in respect of the amount of any benefit under section 12, 12.1, 13, 13.001 or 13.01 of the Act, there is a difference of at least 5% between the actual amount of the benefit and the amount that the erroneous or misleading information had indicated would be payable.

20 If a contributor who exercised an option under section 12, 12.1, 13 or 13.001 of the Act exercises a new option that results in the payment of an annuity or annual allowance and if the repayment by the contributor of the amount referred to in paragraph 19.1(c) within the specified period would cause financial hardship to the contributor, the repayment shall be made in equal monthly instalments that may not be less than $5, except the last one, withheld from the annuity or annual allowance commencing the month after the date of the notice referred to in that paragraph, but the instalments shall not be less than 10% of the gross monthly amount of the annuity or annual allowance.

14 (1) The portion of subsection 21(1) of the Regulations before paragraph (a) is replaced by the following:

21 (1) A person who ceased to be employed in the public service, who was employed by an eligible employer and who exercised an option under section 12, 12.1, 13 or 13.001 of the Act or is deemed to have exercised an option under paragraph 10(5)(a) or (b) of the Act, or who exercised an option in favour of the transfer value referred to in section 13.01 of the Act, may revoke the option and exercise a new option if they have not yet received a benefit under the Act and either of the following conditions is met:

(2) Subsection 21(2) of the Regulations is replaced by the following:

(2) A person who ceased to be employed in the public service before October 15, 2000, who attempted to transfer their pensionable service under an agreement of the type referred to in subsection 40(2) of the Act and who exercised an option under section 12 or 13 of the Act or is deemed to have exercised an option under paragraph 10(5)(a) or (b) of the Act, or who exercised an option in favour of the transfer value referred to in section 13.01 of the Act, may revoke the option and exercise a new option if they have not yet received a benefit under the Act and the transfer could not be validly completed.

(3) The portion of subsection 21(3) of the Regulations before paragraph (b) is replaced by the following:

(3) A person who ceased to be employed in the public service on or after September 1, 2000 but before October 15, 2000, who attempted to transfer their pensionable service under an agreement of the type referred to in subsection 40(2) of the Act and who exercised an option under section 12 or 13 of the Act or is deemed to have exercised an option under paragraph 10(5)(a) or (b) of the Act, or who exercised an option in favour of the transfer value referred to in section 13.01 of the Act, may revoke the option and exercise a new option if

(a) the prior option was exercised or was deemed to have been exercised before December 13, 2004;

15 Sections 21.1 and 22 of the Regulations are replaced by the following:

22 The new option referred to in section 19 or 21 is deemed to have been exercised,

(a) if the new option is in favour of a deferred annuity, on the day on which the initial option was exercised or was deemed to have been exercised;
(b) if the new option is in favour of an annual allowance, on the day after the day on which the contributor ceases to be employed in the public service; and
(c) if the new option is in favour of the transfer value referred to in section 13.01 of the Act, on the day on which the initial option was exercised or, if no option was exercised or was deemed to have been exercised, on the last day of the year that begins on the day after the day on which the contributor ceases to be employed in the public service.

16 Subsection 24(7) of the English version of the Regulations is replaced by the following:

(7) Service as a Commissioner appointed under Part I of the Inquiries Act is deemed continuous during the period commencing on the date specified in the instrument of his or her appointment as his or her commencement date as a Commissioner and ending on the date he or she ceases to act as that Commissioner.

17 (1) Subsection 27(14) of the Regulations is repealed.

(2) Subsection 27(16) of the Regulations is repealed.

18 Section 29 of the Regulations and the heading before it are repealed.

19 Subsection 30(6) of the Regulations is replaced by the following:

(6) For the purposes of subsections 13(4) and 13.001(4) of the Act, subsection (1) does not apply

(a) if the person ceased to be employed in the public service and the person did not become re-employed in the public service within three months after the day on which they ceased to be so employed;
(b) in respect of a period of service referred to in paragraph 13(5)(a) or 13.001(6)(a) of the Act, if the person did not become employed in the public service within three months after the day on which they ceased to be a member of the regular force or of the Force; or
(c) in respect of a period of service referred to in paragraph 13(5)(b) or 13.001(6)(b) of the Act, if the person did not become employed in the public service within the time required by the agreement, or within three months after the day on which they cease to be employed by the eligible employer, whichever is the shorter period.

20 The Regulations are amended by adding the following after section 30.3:

30.31 For the purposes of subsections 12(4) and 12.1(5) of the Act, if the pensionable service of a contributor includes any periods of part-time service, the amount of the basic allowance shall be adjusted, in respect of each of those periods, in the same manner as the amount of the contributor’s annuity is adjusted under paragraphs 30.3(1)(b) and (c).

21 Section 30.5 of the Regulations and the heading before it are repealed.

22 Subsections 30.6(1) and (2) of the Regulations are replaced by the following:

30.6 (1) The monthly amount payable to a survivor or child of a deceased contributor under section 12, 12.1, 13 or 13.001 of the Act in respect of a period of pensionable service occurring after December 31, 1991 shall be reduced so that the aggregate of that amount and the benefits payable under Part III of the Act in respect of that amount does not exceed the maximum monthly amount of retirement benefits that may be paid to the beneficiary of a member, determined under paragraphs 8503(2)(d) to (f) of the Income Tax Regulations, as those paragraphs read on January 15, 1992.

(2) The aggregate of all monthly amounts payable to the survivor and children of a deceased contributor under section 12, 12.1, 13 or 13.001 of the Act in respect of a period of pensionable service occurring after December 31, 1991 shall be reduced so that the total of those amounts and the benefits payable under Part III of the Act in respect of those amounts does not exceed the maximum aggregate monthly amount of retirement benefits that may be paid to the beneficiaries of a member, determined under paragraph 8503(2)(d) or (e) of the Income Tax Regulations as those paragraphs read on January 15, 1992.

23 Subsections 34(1) and (2) of the Regulations are replaced by the following:

34 (1) Subject to subsections (2) and (3), the annuity or annual allowance to which a contributor referred to in subparagraph 13(1)(d)(ii) or 13.001(1)(d)(ii), subsection 13(6) or 13.001(7) or section 23 or 24.6 of the Act is entitled shall be adjusted by deducting an amount determined by the formula

A × B

where

A is 5% of the amount of the annual allowance that they were receiving before becoming disabled or re-employed in the public service; and

B is the number of years, rounded to the nearest one-tenth, during which they received the annual allowance, other than those years, rounded to the nearest one-tenth, after the day on which they attained the age at which they could have retired and been entitled to an immediate annuity based on the period of pensionable service on which the annual allowance was calculated.

(2) The amount of the annuity or annual allowance to which a contributor referred to in subparagraph 13(1)(d)(ii) or 13.001(1)(d)(ii), subsection 13(6) or 13.001(7) or section 23 or 24.6 of the Act may become entitled under Part I of the Act shall not be less than the annual allowance that the contributor was receiving before their latest re-employment in the public service, plus any increase to which they would be entitled in respect of the period of pensionable service to their credit as a result of being re-employed.

24 Section 36.1 of the Regulations is repealed.

25 The heading before section 37 of the Regulations is replaced by the following:

Children’s Allowances

26 Sections 38 to 41 of the Regulations are replaced by the following:

38 (1) For the purposes of paragraphs 12(9)(b) and 12.1(9)(b) of the Act, full-time attendance at a school or university in respect of a child, means full-time attendance at a school, college, university or other educational institution that provides training or instruction of an educational, professional, vocational or technical nature.

(2) A child is deemed to be or to have been in full-time attendance at a school or university substantially without interruption during an absence by reason of a scholastic vacation

(a) if, after the vacation, they begin or resume full-time attendance at a school or university at the beginning of the next academic year; or
(b) if, because of any reasonable cause, they cannot begin or resume full-time attendance at a school or university at the beginning of that academic year but they do so begin or resume full-time attendance at a school or university during that academic year or in the next academic year.

(3) A child is deemed to be or to have been in full-time attendance at a school or university substantially without interruption

(a) during an absence occurring in an academic year because of any reasonable cause, if immediately after the absence they begin or resume full-time attendance at a school or university during that academic year;
(b) until the end of the academic year during which they are absent because of any reasonable cause if they begin or resume full-time attendance at a school or university in the next academic year;
(c) until they are 25 years of age
- (i) if, after an absence because of any reasonable cause occurring in an academic year, they begin or resume, immediately after the absence, full-time attendance at a school or university during that academic year or, if they cannot do so, they begin or resume full-time attendance at a school or university in the next academic year, or
- (ii) if, after a scholastic vacation, they begin or resume full-time attendance at a school or university at the beginning of the next academic year; and
(d) until their death, if they die during the academic year in which their absence commenced because of any reasonable cause, or until the end of the academic year in which their absence commenced, if their death occurred after that academic year.

39 A child who is in full-time attendance at a school or university shall submit to the Minister

(a) a declaration by a responsible officer of the relevant institution that the child is or was enrolled in a full-time course of study; and
(b) a declaration by the child that the child is or was pursuing a full-time course of study.

27 The portion of subsection 42.1(1) of the Regulations before paragraph (a) is replaced by the following:

42.1 (1) Despite sections 12 to 13.001 of the Act, a contributor shall be entitled to benefits under Part I of the Act by reason of being disabled only if they are suffering from a physical or mental impairment that

28 Subsections 43.1(1) and (2) of the Regulations are replaced by the following:

43.1 (1) The medical examination required by subsection 31(1) or (3) of the Act shall be performed within the period of six months before and one year after the day on which the election is made.

(2) If, for reasons beyond the control of the person, they are unable to undergo the medical examination before the end of that period, they shall undergo it within six months after the date of the written notice informing them that an examination is required.

29 Subsection 43.2(4) of the Regulations is replaced by the following:

(4) A contributor who refuses to undergo the medical examination required under subsection (3) is no longer considered to be disabled for the purposes of Part I of the Act.

30 Section 43.3 of the Regulations is repealed.

31 Section 44 of the Regulations and the heading before it are repealed.

32 Section 47 of the English version of the Regulations is amended by replacing “him” with “him or her”.

33 (1) The portion of subsection 72(1) of the Regulations before paragraph (a) is replaced by the following:

72 (1) For the purposes of sections 68 to 71, the following assumptions are to be used when determining actuarial present values:

(2) Subsection 72(1) of the Regulations is amended by striking out “and” at the end of paragraph (b), by adding “and” at the end of paragraph (a) and by repealing paragraph (c).

34 Section 80 of the Regulations is replaced by the following:

80 Despite clause 13(1)(c)(ii)(C) or 13.001(1)(c)(ii)(C) of the Act, the amount of the annual allowance payable under either of those clauses to a contributor who ceases to be employed after November 27, 1997 shall not exceed the amount determined by the formula set out in paragraph 8503(3)(c) of the Income Tax Regulations, as that paragraph read on January 15, 1992.

35 (1) The portion of subsection 83(1) of the Regulations before the definition new employer is replaced by the following:

(1) The following definitions apply in sections 84 to 99.

(2) The definition pensionable age in subsection 83(1) of the Regulations is replaced by the following:

pensionable age means, for Group 1 contributors, 60 years of age and for Group 2 contributors, 65 years of age. (âge ouvrant droit à pension)

(3) The definition transfer value service in subsection 83(1) of the Regulations is repealed.

(4) Subsection 83(2) of the Regulations is replaced by the following:

(2) For the purposes of sections 84 to 99, valuation day is the day on which the transfer value referred to in section 13.01 of the Act is transferred or, if a contributor exercised an option in favour of a transfer value on or after June 20, 1996 and before April 30, 1997, the valuation day is April 30, 1997.

36 Section 90 of the Regulations is replaced by the following:

90 The transfer value to which a contributor is entitled is equal to the greater of

(a) the actuarial present value on valuation day of the accrued pension benefits that would be payable to or in respect of the contributor had the contributor become entitled to a deferred annuity under section 13 or 13.001 of the Act on ceasing to be employed in the public service, and
(b) the amount of a return of contributions that would be payable on valuation day if the contributor were eligible to receive a return of contributions.

37 (1) Subsection 92(1) of the Regulations is amended by adding “and” at the end of paragraph (d) and by replacing paragraphs (e) and (f) with the following:

(e) the probability that a contributor will have a survivor shall be based on the rates regarding the average age and eligibility status of survivors on the date of the death of a contributor used in the preparation of the most recent actuarial valuation report.

(2) Subsection 92(2) of the Regulations is replaced by the following:

(2) The actuarial valuation report referred to in paragraphs (1)(a) and (c) to (e) is the actuarial valuation report most recently laid before Parliament in accordance with section 45 of the Act before valuation day or, if that report was laid before Parliament in the month in which valuation day occurs or in the preceding month, the report that was laid before Parliament immediately before that report.

38 Section 93 of the Regulations is repealed.

39 Section 95 of the Regulations is replaced by the following:

95 If a division of a contributor’s pension benefits is effected under section 8 of the Pension Benefits Division Act before the day on which payment of a transfer value is effected, the transfer value referred to in section 90 shall be reduced to take into account the adjustment to the contributor’s pension benefits made in accordance with section 21 of the Pension Benefits Division Regulations.

40 The heading before section 100 and sections 100 to 104 of the Regulations are replaced by the following:

Election for Transfer Value Service or Pension Transfer Agreement Service

100 (1) The following definitions apply in sections 101 to 107.

pension transfer agreement service means any period of service in respect of which a payment has been made in respect of a contributor in accordance with an agreement entered into under subsection 40.2(2) of the Act. (période de service visée par un accord de transfert)

transfer value service means any period of service in respect of which payment of a transfer value or a commuted value has been effected in accordance with subsection 13.01(2) of the Act, subsection 22(2) of the Canadian Forces Superannuation Act or subsection 12.1(2) of the Royal Canadian Mounted Police Superannuation Act. (période de service relative à une valeur de transfert)

(2) For the purposes of sections 103 and 107, valuation day is the day on which

(a) the contributor most recently became a contributor; or
(b) section 107 comes into force, if the contributor most recently became a contributor before that day and if
- (i) the contributor has, under clause 6(1)(b)(iii)(M) of the Act, elected, within the period referred to in paragraph 101(3)(b), to count as pensionable service a period of service in respect of which payment of a transfer value or a commuted value has been effected in accordance with subsection 22(2) of the Canadian Forces Superannuation Act or subsection 12.1(2) of the Royal Canadian Mounted Police Superannuation Act, or
- (ii) the contributor has, under clause 6(1)(b)(iii)(N) of the Act, elected, within the period referred to in paragraph 101(3)(b), to count as pensionable service a period of pension transfer agreement service.

101 (1) A contributor may elect, while employed in the public service and once only under each of clauses 6(1)(b)(iii)(M) and (N) of the Act, to pay for a period of transfer value service or pension transfer agreement service for which they had not previously had an opportunity to elect to pay.

(2) The election shall be in writing and dated and signed by the contributor.

(3) The election shall be made,

(a) in respect of a period of service for which payment of a transfer value was effected in accordance with subsection 13.01(2) of the Act and if the elector became a contributor most recently before the coming into force of this paragraph, no later than the first anniversary of the date of the written notice sent informing the contributor that they have become a contributor; or
(b) in any other case, no later than the first anniversary of the day on which this paragraph comes into force or the date of the written notice informing the contributor that they have become a contributor, if it is after this day.

(4) The date of the election is the day on which it is delivered to the Minister or, if it is mailed, the day on which it is mailed and the postmark is evidence of that day.

(5) Subject to subsection (6), a contributor who elects to pay for only a portion of transfer value service or pension transfer agreement service may be credited with only the period that is most recent in point of time.

(6) If a contributor elects to pay for only a portion of transfer value service or pension transfer agreement service that consists of periods of full-time service and part-time service, the portion elected shall consist of full-time service and part-time service in the same proportions as those used in the determination of the transfer value or the payment made under a pension transfer agreement, based on those periods of service that are most recent in point of time.

102 (1) For the purposes of subparagraph 11(1)(a)(i) of the Act, any part of a period of service referred to in clause 6(1)(b)(iii)(M) or (N) of the Act during which the contributor worked part-time is credited to the contributor in the proportion determined by the formula

A / B

where

A is the number of hours of work per week for which the contributor was engaged during the part; and

B is the number of hours of work per week for which the contributor would have been engaged during the part if the contributor had worked full-time.

(2) If the pension benefits that have accrued in respect of a period of service referred to in clause 6(1)(b)(iii)(M) of the Act were subject to a division under the Pension Benefits Division Act, only the part of the period of service that corresponds to the portion of the benefits that remain accrued to the contributor is credited to the contributor.

(3) If the pension benefits that have accrued in respect of a period of service referred to in clause 6(1)(b)(iii)(N) of the Act were subject to a division under a pension plan that was subject to the Pension Benefits Standards Act, 1985 or an equivalent provincial law, only the part of the period of service that corresponds to the portion of the benefits that remain accrued to the contributor is, after confirmation of the division by the employer, credited to the contributor.

(4) The total period of service shall be taken into account in determining eligibility for a benefit.

103 (1) For the purposes of paragraph 7(1)(k) of the Act, the amount to be paid for a period of service referred to in clause 6(1)(b)(iii)(M) or (N) of the Act is the actuarial present value of the pension benefits that have accrued under the Act in respect of the period of service, that value being determined on valuation day on a going-concern basis and in accordance with the methods and assumptions used in the preparation of the actuarial valuation report that was most recently laid before Parliament in accordance with section 45 of the Act before valuation day or, if that report was laid before Parliament in the month in which valuation day occurs or in the preceding month, of the report that was laid before Parliament immediately before that report.

(2) The amount to be paid shall bear interest, compounded annually, beginning on the first day of the month after the day on which the election is made and ending on the last day of the month that precedes the day on which the payment is received, at a rate equal to the projected rate of return of the Public Service Pension Fund that was used in the preparation of the actuarial valuation report that was most recently laid before Parliament in accordance with section 45 of the Act before the day on which the payment is received or, if that report was laid before Parliament in the month in which that day falls or in the preceding month, of the report that was laid before Parliament immediately before that report.

104 (1) The amount to be paid for a period of service referred to in clause 6(1)(b)(iii)(M) or (N) of the Act shall be paid to the Public Service Pension Fund in a lump sum.

(2) The election is void unless the amount is received by the Minister no later than the 90th day after the date of the written notice from the Minister informing the contributor that the past service pension adjustment, within the meaning of subsection 8303(1) of the Income Tax Regulations, certification has been issued by the Canada Revenue Agency.

(3) The period of service in respect of which the election was made shall be counted as pensionable service, in the same proportion as the amount that is received by the Minister within the time limit set out in subsection (2) bears to the total amount to be paid, beginning with the part that is most recent in point of time.

105 The election is void if the contributor does not pay into the Retirement Compensation Arrangements Account established under the Special Retirement Arrangements Act, within the time limit set out in subsection 104(2), any amount required to be paid under section 38.3 of the Retirement Compensation Arrangements Regulations, No. 1 for the part of the period of service in respect of which the election was made that is counted as pensionable service.

106 If a contributor’s election is void for the reasons set out in subsection 104(2) or in section 105, the contributor is not entitled to make another election in respect of any period of service to which the election applies.

107 In respect of a contributor making the election referred to in clause 6(1)(b)(iii)(M) or (N) of the Act, paragraph 11(7)(c.1) of the Act is adapted as follows:

(c.1) a person who has to their credit a period of service described in clause 6(1)(b)(iii)(M) or (N) is deemed to have received during that period
- (i) if they were a full-time employee on valuation day, as determined under subsection 100(2) of the Public Service Superannuation Regulations, the salary that was authorized as payable to them on that day, or
- (ii) if they were then a part-time employee, the salary that would have been authorized as payable to them if they had been a full-time employee on that day or, if they were then engaged to work concurrently in two or more positions, the total of the salary determined for each position by the formula

A × B / C

where

A is the salary that would have been authorized as payable to them if they had been a full-time employee on that day,

B is the weekly average of the hours of work for which they were engaged, and

C is the aggregate of the weekly averages of the hours of work for which they were engaged in all positions.

41 The Regulations are amended by replacing “surviving spouse” and “surviving spouses” with “survivor” and “survivors”, respectively, in the following provisions:

(a) subsection 7.2(5);
(b) paragraph 33(1)(b);
(c) paragraph 72(1)(b); and
(d) paragraph 92(1)(a).

42 The English version of the Regulations is amended by replacing “his” and “his or her” with “their”, except in subsection 49(4).

43 The English version of the Regulations is amended by replacing “he” and “he or she” with “they”, with any necessary modifications, except in the following provisions:

(a) subsection 35(4);
(b) section 47; and
(c) paragraph 48(6)(a).

44 The English version of the Regulations is amended by replacing “he” with “he or she” in the following provisions:

(a) subsection 35(4);
(b) section 47; and
(c) paragraph 48(6)(a).

45 The English version of the Regulations is amended by replacing “him” and “him or her” with “them”, except in section 47.

46 The English version of the Regulations is amended by replacing “Public Service” with “public service”, except in the expressions “Public Service Employment Act”, “Public Service Superannuation Act”, “Public Service Superannuation Regulations”, “Public Service Pension Fund” and “Public Service Commission” and in the heading before section 27.

NAV CANADA Divestiture Regulations

47 The NAV CANADA Divestiture Regulations (see footnote 2) are amended by adding the following after section 13:

14 A contributor to whom these Regulations apply is considered to be a Group 1 contributor.

48 The English version of the Regulations is amended by replacing “Public Service” with “public service” in the following provisions:

(a) the definition NAV CANADA divestiture in section 1;
(b) subsection 2(1);
(c) paragraph 3(3)(a);
(d) section 6;
(e) section 9;
(f) paragraph 10(b);
(g) subsection 11(1); and
(h) section 12.

Airport Transfer Regulations

49 The Airport Transfer Regulations (see footnote 3) are amended by adding the following after section 11:

11.1 A contributor to whom these Regulations apply is considered to be a Group 1 contributor.

50 The English version of the Regulations is amended by replacing “Public Service” with “public service” in the following provisions:

(a) subsection 2(1);
(b) subparagraph 3(2)(b)(ii), paragraph 3(3)(a), subparagraph 3(3)(b)(i), and the portion of subsection 3(4) before subparagraph (a)(ii);
(c) section 6; and
(d) sections 8 to 11.

Canada Communication Group Divestiture Regulations

51 The Canada Communication Group Divestiture Regulations (see footnote 4) are amended by adding the following after section 9:

9.1 A contributor to whom these Regulations apply is considered to be a Group 1 contributor.

52 The English version of the Regulations is amended by replacing “Public Service” with “public service” in the following provisions:

(a) the definition transfer date in section 1;
(b) subsection 2(1);
(c) subsection 3(2);
(d) section 6; and
(e) section 9.

Administration of Labour Market Development Services Divestiture Regulations

53 Sections 3 to 5 of the Administration of Labour Market Development Services Divestiture Regulations (see footnote 5) are replaced by the following:

3 (1) Sections 12 to 13.01 of the Act only apply to a person on and after the day on which they cease to be employed by the new employer.

(2) However, if on or after April 1, 1998, were it not for these Regulations, a person would be entitled to a return of contributions under subsection 12(3) or 12.1(4) of the Act, they may request, in writing, the return of contributions within one year after the day on which they cease to be employed in the public service and become employed by the new employer, and if, in the same circumstances, a person would be entitled to exercise an option in favour of the transfer value referred to in section 13.01 of the Act, they may exercise the option within the same period.

Survivor and Children

4 The survivor and children of a person who dies while employed by the new employer are entitled to one of the following benefits to which they would have been entitled if the person had been employed in the public service:

(a) the death benefit under subsection 12(8) or 12.1(8) of the Act; or
(b) the allowances referred to in subsection 13(3) or 13.001(3) of the Act.

54 The heading before section 8 and sections 8 and 9 of the Regulations are replaced by the following:

Adaptation of Sections 12 to 13.01 of the Act

8 For the purposes of sections 12 to 13.01 of the Act, pensionable service includes the period of service with the new employer that begins on the day on which the person ceases to be employed in the public service and that ends on the day on which they cease to be employed by the new employer.

9 For the purposes of sections 12 to 13.01 of the Act, the age of the person when they cease to be employed in the public service is their age on the day on which they cease to be employed by the new employer.

55 The English version of the Regulations is amended by replacing “Public Service” with “public service” in the following provisions:

(a) subsection 2(1); and
(b) section 6.

Portions of the Department of National Defence Divestiture Regulations

56 Sections 3 to 5 of the Portions of the Department of National Defence Divestiture Regulations (see footnote 6) are replaced by the following:

3 (1) Sections 12 to 13.01 of the Act only apply to a person on and after the day on which they cease to be employed by the new employer.

Survivor and Children

(a) the death benefit under subsection 12(8) or 12.1(8) of the Act; or
(b) the allowances referred to in subsection 13(3) or 13.001(3) of the Act.

57 The heading before section 8 and sections 8 and 9 of the Regulations are replaced by the following:

Adaptation of Sections 12 to 13.01 of the Act

58 The English version of the Regulations is amended by replacing “Public Service” with “public service” in the following provisions:

(a) subsection 2(1); and
(b) section 6.

Portions of the Department of Public Works and Government Services Divestiture Regulations

59 Sections 3 to 5 of the Portions of the Department of Public Works and Government Services Divestiture Regulations (see footnote 7) are replaced by the following:

3 (1) Sections 12 to 13.01 of the Act only apply to a person on and after the day on which they cease to be employed by the new employer.

Survivor and Children

(a) the death benefit under subsection 12(8) or 12.1(8) of the Act; or
(b) the allowances referred to in subsection 13(3) or 13.001(3) of the Act.

60 The heading before section 8 and sections 8 and 9 of the Regulations are replaced by the following:

Adaptation of Sections 12 to 13.01 of the Act

61 The English version of the Regulations is amended by replacing “Public Service” with “public service” in the following provisions:

(a) subsection 2(1); and
(b) section 6.

Pension Plan Transfer Agreements Regulations

62 The definition employee in section 1 of the English version of the Pension Plan Transfer Agreements Regulations (see footnote 8) is amended by replacing “Public Service” with “public service”.

Portions of the Department of Citizenship and Immigration Divestiture Regulations

63 Sections 3 to 5 of the Portions of the Department of Citizenship and Immigration Divestiture Regulations (see footnote 9) are replaced by the following:

3 (1) Sections 12 to 13.01 of the Act only apply to a person on and after the day on which they cease to be employed by the new employer.

Survivor and Children

(a) the death benefit under subsection 12(8) or 12.1(8) of the Act; or
(b) the allowances referred to in subsection 13(3) or 13.001(3) of the Act.

64 The heading before section 8 and sections 8 and 9 of the Regulations are replaced by the following:

Adaptation of Sections 12 to 13.01 of the Act

65 The English version of the Regulations is amended by replacing “Public Service” with “public service” in the following provisions:

(a) subsection 2(1); and
(b) section 6.

Blainville Motor Vehicle Test Centre Benefit Eligibility Protection Regulations

66 The Blainville Motor Vehicle Test Centre Benefit Eligibility Protection Regulations (see footnote 10) are amended by adding the following after section 10:

10.1 A contributor to whom these Regulations apply is considered to be a Group 1 contributor.

67 The English version of the Regulations is amended by replacing “Public Service” with “public service” in the following provisions:

(a) section 2;
(b) the portion of section 3 before paragraph (b);
(c) sections 6 and 7; and
(d) sections 9 and 10.

St. Lawrence Seaway Authority Divestiture Regulations

68 The St. Lawrence Seaway Authority Divestiture Regulations (see footnote 11) is amended by adding the following after section 9:

9.1 A contributor to whom these Regulations apply is considered to be a Group 1 contributor.

69 The English version of the Regulations is amended by replacing “Public Service” with “public service”, except in the expression “Public Service Superannuation Act”, in the following provisions:

(a) subsection 2(1);
(b) subsection 3(2);
(c) section 6; and
(d) sections 8 and 9.

Portions of the Royal Canadian Mounted Police Divestiture Regulations

70 Sections 3 to 5 of the Portions of the Royal Canadian Mounted Police Divestiture Regulations (see footnote 12) are replaced by the following:

3 (1) Sections 12 to 13.01 of the Act only apply to a person on and after the day on which they cease to be employed by the new employer.

Survivor and Children

(a) the death benefit under subsection 12(8) or 12.1(8) of the Act; or
(b) the allowances referred to in subsection 13(3) or 13.001(3) of the Act.

71 The heading before section 8 and sections 8 and 9 of the Regulations are replaced by the following:

Adaptation of Sections 12 to 13.01 of the Act

72 The English version of the Regulations is amended by replacing “Public Service” with “public service” in the following provisions:

(a) subsection 2(1); and
(b) section 6.

Certain Canada Port Authorities Divestiture Regulations

73 The Certain Canada Port Authorities Divestiture Regulations (see footnote 13) are amended by adding the following after section 9:

9.1 A contributor to whom these Regulations apply is considered to be a Group 1 contributor.

74 The English version of the Regulations is amended by replacing “Public Service” with “public service” in the following provisions:

(a) subsection 2(1);
(b) subsection 3(2);
(c) section 6; and
(d) sections 8 and 9.

Portions of the Canada Ports Corporation Divestiture Regulations

75 The Portions of the Canada Ports Corporation Divestiture Regulations (see footnote 14) are amended by adding the following after section 9:

9.1 A contributor to whom these Regulations apply is considered to be a Group 1 contributor.

76 The English version of the Regulations is amended by replacing “Public Service” with “public service” in the following provisions:

(a) subsection 2(1);
(b) subsectiond 3(2);
(c) section 6; and
(d) sections 8 and 9.

Withdrawal of Entities Regulations

77 The Withdrawal of Entities Regulations (see footnote 15) are amended by adding the following after section 9:

9.1 A contributor to whom these Regulations apply is considered to be a Group 1 contributor.

78 The English version of the Regulations is amended by replacing “Public Service” with “public service” in the following provisions:

(a) paragraph 2(1)(a);
(b) section 6; and
(c) sections 8 and 9.

Portions of the Department of Health Divestiture Regulations

79 Subsections 3(2) to (4) of the Portions of the Department of Health Divestiture Regulations (see footnote 16) are replaced by the following:

(2) A person who does not exercise an option in favour of the transfer value referred to in section 13.01 of the Act is deemed to be employed by a new employer within the meaning of subsection 83(1) of the Public Service Superannuation Regulations.

(3) However, if on or after September 1, 2002, were it not for these Regulations, a person would be entitled to a return of contributions under subsection 12(3) or 12.1(4) of the Act, they may request, in writing, the return of contributions within one year after the day on which they cease to be employed in the public service and become employed by the new employer, and if, in the same circumstances, a person would be entitled to exercise an option in favour of the transfer value referred to in section 13.01 of the Act, they may exercise the option within the same period.

80 Sections 4 and 5 of the Regulations are replaced by the following:

(a) the death benefit under subsection 12(8) or 12.1(8) of the Act; or
(b) the allowances referred to in subsection 13(3) or 13.001(3) of the Act.

81 Section 9 of the Regulations is replaced by the following:

82 The English version of the Regulations is amended by replacing “Public Service” with “public service” in the following provisions:

(a) subsection 2(1);
(b) section 6; and
(c) section 8.

Canadian Tourism Commission Divestiture Regulations

83 The Canadian Tourism Commission Divestiture Regulations (see footnote 17) are amended by adding the following after section 9:

9.1 A contributor to whom these Regulations apply is considered to be a Group 1 contributor.

84 The English version of the Regulations is amended by replacing “Public Service” with “public service” in the following provisions:

(a) subsection 2(1);
(b) section 6; and
(c) section 9.

The Micronutrient Initiative Divestiture Regulations

85 The Micronutrient Initiative Divestiture Regulations (see footnote 18) are amended by adding the following after section 7:

Group 1 contributor

7.1 A contributor to whom these Regulations apply is considered to be a Group 1 contributor.

Watson Lake Hospital Divestiture Regulations

86 The Watson Lake Hospital Divestiture Regulations (see footnote 19) are amended by adding the following after section 8:

Group 1 contributor

8.1 A contributor to whom these Regulations apply is considered to be a Group 1 contributor.

Portions of the Department of Agriculture and Agri-Food Divestiture Regulations

87 Subsection 3(2) of the Portions of the Department of Agriculture and Agri-Food Divestiture Regulations (see footnote 20) is replaced by the following:

Exceptions

(2) However, if on or after January 1, 2010, were it not for these Regulations, a person would be entitled to a return of contributions under subsections 12(3) or 12.1(4) of the Act, they may request, in writing, the return of contributions within one year after the day on which they cease to be employed in the public service and become employed by the new employer, and if in the same circumstances, a person would be entitled to exercise an option in favour of the transfer value referred to in section 13.01 of the Act, they may exercise the option within the same period.

88 Paragraphs 4(a) and (b) of the Regulations are replaced by the following:

(a) the death benefit under subsection 12(8) or 12.1(8) of the Act; or
(b) the allowances referred to in subsection 13(3) or 13.001(3) of the Act.

89 Section 8 of the Regulations is replaced by the following:

Sections 12 to 13.01 of Act

8 For the purposes of sections 12 to 13.01 of the Act, the age of the person when they cease to be employed in the public service is their age on the day on which they cease to be employed by the new employer.

Transitional Provision

90 The amount to be paid for a period of service referred to in clause 6(1)(b)(iii)(M) of the Public Service Superannuation Act, in the case where the conditions set out below are satisfied, is the lesser of the amount calculated in accordance with section 101 of the Public Service Superannuation Regulations, as they read before the day on which this section came into force, and the amount calculated in accordance with section 103 of those Regulations, as it read on that day:

(a) the payment of the transfer value to which the contributor was entitled was effected under section 13.01 of that Act before January 1, 2013; and
(b) the contributor again became a contributor after that date and before the day on which this section comes into force.

Coming into Force

91 (1) These Regulations, except sections 20 and 47 to 89, come into force on the day on which they are registered.

(2) Section 20 is deemed to have come into force on July 4, 1994.

(3) Sections 47 to 89 are deemed to have come into force on January 1, 2013.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

The Public Service Superannuation Act was amended by the Jobs and Growth Act, 2012, to increase contribution rates for all plan members and increase the normal retirement age from 60 to 65 for new public service pension plan members hired on or after January 1, 2013. These new legislative provisions are designed to ensure that the public service pension plan continues to provide appropriate benefits to plan members at a fair cost, shared between plan members and Canadian taxpayers.

However, regulations made under the Public Service Superannuation Act have not been correspondingly amended to incorporate the 2012 amendments to the Public Service Superannuation Act. As a result, certain pension benefits cannot be administered correctly for plan members hired on or after January 1, 2013. In addition, the method for calculating the cost to reinstate certain types of pensionable service does not account for the difference in the cost of benefits for plan members hired before and after January 1, 2013. The current cost methodology may cause inequitable treatment between plan members.

Background

In 2012, the Public Service Superannuation Act was amended by the Jobs and Growth Act, 2012, increasing the age of retirement for public service employees who began participating in the public service pension plan as of January 1, 2013. This amendment created a new group of pension plan members:

“Group 1” plan members are those plan members who were participating in the pension plan before January 1, 2013, and are eligible for an unreduced pension benefit at age 60, or at age 55 if they have at least 30 years of pensionable service.
“Group 2” plan members are those plan members who began participating in the plan as of January 1, 2013, and are eligible for an unreduced pension benefit at age 65, or at age 60 if they have at least 30 years of pensionable service.

Group 2 members pay lower contribution rates than Group 1 members because they receive a benefit that has a lower overall cost.

Regulations made under the Public Service Superannuation Act (the Act) provide direction on how to apply provisions of the Act, such as the application of pension deductions, benefits, transfer values and survivor benefits. However, as a result of the 2012 changes to the Act, the Public Service Superannuation Regulations, the Withdrawal of Entities Regulations and the set of 18 divestiture regulations are no longer aligned with the Act. These regulations do not reference Group 2 plan members and their later age of eligibility for pension benefits. As a result, certain pension benefit entitlements cannot be applied correctly to Group 2 plan members. For example, without the amended regulations, a Group 2 plan member cannot revoke a benefit option or receive a disability pension. A Group 2 plan member between the ages of 50 and 55 is ineligible to opt for a transfer value payment, which is a lump sum pension amount representing the present value of a plan member’s accrued pension entitlement that is payable in the future. Finally, in the event of a Group 2 member’s death, eligible dependent children are ineligible to receive a children’s allowance.

Under the public service pension plan, if a member received a transfer value when they left the public service, and became re-employed and resumed their contributions to the public service pension plan, they may be able to reinstate all or part of the pensionable service for which they received a transfer value. Pensionable service transferred out of the public service pension plan by a Pension Transfer Agreement can also be reinstated if a plan member becomes re-employed in the public service. However, the method of determining the cost to reinstate the pensionable service may result in inequitable treatment between public service pension plan members who choose to reinstate certain types of prior pensionable service. The current regulations for determining the cost to reinstate certain types of pensionable service are based on the amount previously paid out to the plan member, plus interest. However, this costing method does not take into account that the retirement age that applies to the plan member as a Group 2 member when they reinstate the pensionable service may be five years later than the retirement age that applied when the pensionable service was paid out. As a result, the plan member might be overpaying for the pensionable service they are reinstating because Group 2 benefits have an overall lower cost than Group 1 benefits.

Objectives

The objective of the Regulations Amending Certain Regulations Made Under the Public Service Superannuation Act is to ensure that the Public Service Superannuation Regulations, the Withdrawal of Entities Regulations and the set of 18 regulations pertaining to divestitures are aligned with the 2012 amendments made to the Public Service Superannuation Act.

Description

The amendments

incorporate the distinction between Group 1 (retirement age 60) and Group 2 (retirement age 65) public service pension plan members, as they are defined in the Public Service Superannuation Act;
allow for the payment of pension benefits out of the public service pension plan to individuals who are entitled to pension;
require the payment of prior pensionable service election contributions into the Public Service Pension Fund for members of the public service pension plan who choose to purchase a period of prior pensionable service; and
consist of minor housekeeping amendments which include simplifying the language, repealing outdated provisions, ensuring administrative flexibility and efficiencies, and correcting references to specific provisions of the Public Service Superannuation Act.

“One-for-One” Rule

The “One-for-One” Rule does not apply to this proposal, as there is no change in administrative costs to business. This proposal does not apply to business.

Small business lens

The small business lens does not apply to this proposal, as there is no impact on small business. This proposal does not apply to business.

Consultation

Consultations took place with the Office of the Chief Actuary, the Department of Public Services and Procurement and the Department of Justice.

The Public Service Pension Advisory Committee, whose membership includes representatives of employees, was advised of the 2012 amendments made to the Public Service Superannuation Act and its accompanying regulations. This Committee has a statutory mandate to review matters respecting the administration, design and funding of the Public Service Superannuation Act and make recommendations to the President of the Treasury Board.

The regulatory amendments simply operationalize the amendments to the Public Service Superannuation Act and do not make any policy changes. Since 2012, plan members, stakeholders and Canadians have been informed through newsletters, information notices and web content posted to the Canada.ca/pension-benefits Web site about the differing retiring ages between Group 1 and Group 2 members, and the annual increases for plan member contribution rates.

Rationale

The amendments are internal to the operations of Government and are intended to support the full implementation of the legislative amendments made to the Public Service Superannuation Act by the Jobs and Growth Act, 2012. The amendments ensure that applicable regulations made pursuant to the Public Service Superannuation Act, which include the Public Service Superannuation Regulations, the Withdrawal of Entities Regulations, and the existing set of divestiture regulations, recognize the distinctions between the two groups of plan members as defined in the Act and take into account the difference between the overall cost of Group 1 and Group 2 benefits.

These amendments ensure that public service pension plan provisions are applied correctly to take into account the later age of retirement of Group 2 members. In addition, the amendment to the methodology to cost the reinstatement of pensionable service ensures that the administration of the plan is equitable and clear in the treatment of benefits between Group 1 and Group 2 public service pension plan members.

No additional financial or human resources are required to implement or administer the regulations.

Contact

Deborah Elder
Director
Pensions and Benefits Sector
Treasury Board Secretariat
Ottawa, Ontario
K1A 0R5
Telephone: 613-952-3121

Footnote a
S.C. 2012, c. 31, s. 498
Footnote b
S.C. 2012, c. 31, s. 499
Footnote c
S.C. 1999, c. 34, s. 113
Footnote d
R.S., c. P-36
Footnote e
R.S., c. F-11
Footnote 1
C.R.C., c. 1358; SOR/93-450, s.11
Footnote 2
SOR/96-479
Footnote 3
SOR/96-518
Footnote 4
SOR/97-127
Footnote 5
SOR/97-165
Footnote 6
SOR/98-230
Footnote 7
SOR/98-231
Footnote 8
SOR/98-445
Footnote 9
SOR/99-3
Footnote 10
SOR/99-4
Footnote 11
SOR/99-144
Footnote 12
SOR/99-247
Footnote 13
SOR/2000-1
Footnote 14
SOR/2000-60
Footnote 15
SOR/2000-143
Footnote 16
SOR/2003-286
Footnote 17
SOR/2004-15
Footnote 18
SOR/2009-204
Footnote 19
SOR/2010-290
Footnote 20
SOR/2010-291