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First
Session, 48th General Assembly 65
Elizabeth II, 2016 |
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AN ACT TO AMEND THE
PENSIONS FUNDING ACT AND THE TEACHERS' PENSIONS ACT |
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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
CATHY BENNETT Minister of Finance and President of Treasury Board |
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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 Pensions Funding Act and the Teachers' Pensions Act to reflect the Teachers' Pension Plan Reform Agreement. The Pensions Funding Act would be amended to exempt the teachers' pension plan under the Teachers' Pensions Act from the Act, and, in particular, from the deficiency guarantee under the Act. The Bill would also transfer the value of the assets contained in the pooled fund under the Pensions Funding Act respecting the teachers' pension plan to the pension fund established under the Teachers' Pensions Act. The Teachers' Pensions Act would be amended to · establish the Teachers' Pension Plan Corporation, which would act as administrator of the pension plan and trustee of the fund; · transfer the assets relating to the pension plan under the Act from the pooled fund under the Pensions Funding Act into the Teachers' Pension Plan Fund; · revise a provision requiring a promissory note further to a joint sponsorship agreement to clarify that the amount required to be amortized is to be valued at September 1, 2015; and · make those other amendments as are necessary to reflect the reform agreement, and to provide for the future administration of the plan and management of the fund by the corporation. |
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A BILL AN ACT TO AMEND THE PENSIONS FUNDING ACT AND THE TEACHERS' PENSIONS ACT Analysis PENSIONS FUNDING ACT 1. S.3 Amdt. 2. S.5.1 Amdt. 3. S.9 Amdt. TEACHERS' PENSIONS ACT 4.
S.2 R&S 5.
S.4 Amdt. 6.
S.5.1 Added 7.
S.6 Amdt. 8.
S.7 Amdt. 9.
S.8 Amdt. 10. S.8.1 Amdt. 11.
S.8.2 Added 12.
S.9 Amdt. 13.
S.11 Amdt. 14.
S.12.1Amdt. 15.
S.13 Amdt. 16.
S.16 Amdt. 17.
S.19 R&S 18.
S.20 Amdt. 19.
S.21 Amdt. 20.
S.24 Amdt. 21.
S.26 R&S 22.
S.27 Amdt. 23.
S.29 Amdt. 24.
S.30 Amdt. 25.
S.31 R&S 26. S.33 Amdt. 27.
S.34 Amdt. 28.
S.35 Rep. 29.
S.38 Amdt. 30.
S.39 Amdt. 31.
Ss.39.1 to 39.8 Added 32.
S.40 Amdt. 33.
S.42 R&S 34.
S.43 Amdt. 35. Commencement Be it enacted by the Lieutenant-Governor and House of Assembly in Legislative Session convened, as follows: PENSIONS FUNDING ACT RSNL1990 cP-6 1. Paragraph 3(b) of the Pensions Funding Act is repealed. 2. Section 5.1 of the Act is amended by renumbering it as subsection 5.1(1) and by adding immediately after that subsection the following: (2) The assets in the fund relating to the plan under the Teachers' Pensions Act are transferred to the Teachers' Pension Plan Fund established under section 5.1 of that Act. 3. Section 9 of the Act is amended by adding immediately after subsection (2) the following: (3) Subsection (1) does not apply to the plan
established by the Teachers' Pensions Act.
TEACHERS' PENSIONS ACT SNL1991 c17 4. Section 2 of the Teachers' Pensions Act is repealed and the following substituted: Interpretation 2. (1) In this Act (a) "actuarially reduced pension" means a pension that has been reduced by an amount determined by an actuary that reflects the fact that the pension is being paid from a date that is earlier than the date the teacher, based on his or her service, would be eligible for an unreduced pension; (b) "board" means the board of directors of the corporation; (c) "Canada Pension Plan" means the Canada Pension Plan, Chapter C-8 of the Revised Statutes of Canada, 1985; (d) "child" includes a natural child, a stepchild or an adopted child; (e) "cohabiting partner " means (i) in relation to a teacher, pensioner or deferred pensioner who has a spouse, means a person who is not the spouse who has cohabited continuously with the teacher, pensioner or deferred pensioner in a conjugal relationship for not less than 3 years, (ii) in relation to a teacher, pensioner or deferred pensioner who does not have a spouse, means a person who has cohabited continuously with the teacher, pensioner or deferred pensioner, in a conjugal relationship for not less than one year, and is cohabiting or has cohabited with the teacher, pensioner or deferred pensioner within the preceding year; (f) "commuted value" means commuted value as defined in the Pension Benefits Act, 1997; (g) "consumer price index" with respect
to a year, means the average for each month of that year of the Consumer Price
Index for (h) "corporation" means the Teachers' Pension Plan Corporation established under section 39.1; (i) "deferred pensioner" means a person who, under section 9.1, has elected or is considered to have elected to receive a deferred pension; (j) "former Act" means The Education (Teachers' Pensions) Act; (k) "fund" means the Teachers' Pension Plan Fund established under section 5.1; (l) "funding policy" means the funding policy attached as Appendix A to the joint sponsorship agreement; (m) "government" means the government of the province; (n) "joint sponsorship agreement" means the agreement relating to the joint sponsorship of the pension plan between government, on the one part, and the Newfoundland and Labrador Teachers' Association on the other part, dated March 15, 2016 and includes the appendices to the agreement; (o) "life income fund" means the life income fund as defined in the Pension Benefits Act Regulations; (p) "locked in retirement fund" means locked in retirement account as defined in the Pension Benefits Act Regulations; (q) "minister" means the minister appointed under the Executive Council Act to administer this Act; (r) "normal retirement age" means the end of the month in which a teacher reaches the age of 60 years, but not later than the end of the teaching year in which the teacher reaches the age of 60 years; (s) "pension" means an annual pension payable to a former teacher in accordance with the pension plan; (t) "pension plan" means the Teachers' Pension Plan referred to in this Act; (u) "pensionable service" means service credited under the pension plan for the purpose of determining whether a teacher has qualified for a pension and the amount of the pension; (v) "pensioner" means a person in receipt of a pension under this Act; (w) "prescribed" means, except as otherwise indicated, prescribed by the corporation; (x) "principal beneficiary" means the spouse of a teacher, pensioner or deferred pensioner, or where the teacher, pensioner or deferred pensioner has a cohabiting partner, his or her cohabiting partner; (y) "salary" means the normal remuneration paid to a teacher for the normal working period or other remuneration that may be prescribed; (z) "sponsor body" means the body appointed in accordance with section 4 of the joint sponsorship agreement; (aa) "spouse" means a person who (i) is married to the teacher, pensioner or deferred pensioner, (ii) is married to the teacher, pensioner or deferred pensioner by a marriage that is voidable and has not been voided by a judgment of nullity, or (iii) has gone through a form of a marriage with the teacher, pensioner or deferred pensioner, in good faith, that is void and is cohabiting or has cohabited with the teacher, pensioner or deferred pensioner within the preceding year; (bb) "supplementary
account" means the Teachers' Supplementary Plan Account established under
subsection 5(2); (cc) "survivor benefit" means a benefit payable to the principal beneficiary of a deceased teacher, pensioner or deferred pensioner; (dd) "teacher" means a person holding a valid and subsisting certificate or grade or licence not lower than the emergency supply licence issued under the Teacher Training Act, who is, subject to the Schools Act, 1997 appointed or employed by a board of directors or a school board to give instruction or to administer or supervise instructional services in a college or a school and includes (i) a director, an associate director or an assistant director, except the assistant director of finance and administration appointed under section 79 of the Schools Act, 1997, and (ii) every person who is considered a teacher under section 3; (ee) "teaching service" means the total period during which a person who holds a valid certificate or grade or a licence is employed as a teacher in the province; (ff) "teaching year" means the 12 calendar months beginning on July 1; (gg) "terminating teacher" means a teacher who terminates his or her employment or whose employment is terminated for reasons other than disability and who is not retired or entitled to receive a pension under subsection 20(1) or (3); (hh) "year of pensionable service" means 190 days of teaching service unless otherwise prescribed; and (ii) "YMPE" means the year's maximum pensionable earnings as defined under the Canada Pension Plan. (2) Words and expressions used in paragraph (1)(dd) and section 3 and defined by the Schools Act, 1997 have the meaning assigned to them by that Act. 5. Paragraph 4(b) of the Act is repealed and the following substituted: (b) is excluded from this Act by a directive of the corporation. 6. The Act is amended by adding immediately after section 5 the following: Fund established 5.1 (1) There is established a fund to be known as the Teachers' Pension Plan Fund. (2) The fund shall be held in trust by the corporation and may be invested on the terms and conditions that the corporation considers advisable in the securities and investments that conform to the investment requirements of the regulations made under section 37 of the Pensions Benefits Act, 1997. (3) The assets relating to the pension plan
contained in the (4) In addition to subsection (3), there shall be deposited into the fund (a) contributions made by teachers and government under this Act; (b) the income of the fund; and (c) any other income arising from the operation of the pension plan. (5) Where government does not make a contribution or deposit to the pension plan in the manner required by this Act, a penalty shall be assessed and levied upon the amount of that contribution or deposit in a manner directed by the corporation. (6) There shall be paid out of the fund (a) pensions, refunds and payments as they fall due under the pension plan; (b) the operating costs of the fund; and (c) other expenditures arising from the operation of the pension plan. (7) The assets of the fund may be pooled with the assets of other pension plans, including government pension plans, for investment purposes as directed by the corporation. 7. Subsections 6(2) and (3) of the Act are repealed and the following substituted: (2) There shall be deducted from the salary of every teacher to whom the pension plan applies 11.35% of that salary. (2.1) Notwithstanding subsection (2), the sponsor body may prescribe different amounts to be deducted from the salary of every teacher to whom the pension plan applies. (3) Where the amount of contributions made under subsection (2) or (2.1) exceeds the amount of the annual deductible contributions to a registered plan permitted under the Income Tax Act (Canada), the amount of the excess, as determined at the end of the calendar year in which the contributions are made, shall be paid from the fund to the supplementary account no later than the last day of February in the immediately following calendar year. 8. Section 7 of the Act is amended by deleting the word "pension". 9. (1) Subsections 8(1) and (1.1) of the Act are repealed and the following substituted: Government contributions 8. (1) The government of the province shall pay out of the Consolidated Revenue Fund and pay into the fund (a) an amount equal to the contributions of teachers under this Act unless otherwise directed by this Act or a directive of the sponsor body; and (b) an additional amount that may be prescribed by the sponsor body. (1.1) Where the amount of government contributions under subsection (1) exceeds the amount of the annual deductible contributions to a registered plan permitted under the Income Tax Act (Canada), the amount of the excess, as determined at the end of the calendar year in which the contributions are made, shall be paid from the fund to the supplementary account no later than the last day of February of the immediately following calendar year. (2) Subsection 8(4) of the Act is repealed and the following substituted: (4) Where the contribution of the government of
the province is reduced under this Act, a teacher or a former teacher may elect
to contribute an amount, in addition to the amount which he or she is or was
required to contribute under section 6, to be calculated in accordance with the
terms and conditions which may be prescribed, which would place the teacher or former
teacher in the position he or she would have been in respecting an award of
pension if the government of the province had not reduced its contribution. 10. Subsection 8.1(2) of the Act is repealed and the following substituted: (2) The promissory note shall amortize $1,862,000,000, valued at September 1, 2015, over 30 years in equal annual payments of $135,272,273 beginning on August 31, 2016. 11. The Act is amended by adding immediately after section 8.1 the following: Termination and plan wind-up 8.2 (1) Where the fund is to be terminated and wound up in accordance with the joint sponsorship agreement, the assets of the fund shall be used to meet the accrued benefit entitlements of teachers, pensioners, deferred pensioners and any other persons entitled to a benefit under the pension plan before any other distribution may be made. (2) Where the assets of the fund are insufficient to secure the benefit entitlements referred to in subsection (1), the assets of the fund shall be allocated to teachers, pensioners, deferred pensioners and any other persons entitled to a benefit under the pension plan on a pro-rated basis, based on the actuarial present value of the accrued benefits of those persons as of the date of the wind-up, and distributed in the manner determined by the corporation. (3) The government or a teacher is not required to pay any additional amount to the pension plan in respect of a shortfall in the fund upon the wind-up of the pension plan. (4) Nothing in subsection (3) affects in any way
government's obligation to continue to make payments under subsection 8.1(2) in
the manner contemplated in that subsection. 12. Subsections 9(3) and (4) of the Act are amended
by deleting the word "minister" wherever it occurs and substituting
the word "corporation". 13. Subsection 11(1) of the Act is amended by deleting the word "minister" and substituting the word "corporation". 14. Subsection 12.1(4) of the Act is amended by deleting the words "by the minister". 15. Subsection 13(4) of the Act is amended by deleting the word "minister" and substituting the word "corporation". 16. Subsection 16(2) of the Act is repealed and the following substituted: (2) The corporation may enter into a reciprocal agreement with a government, company, corporation, institution or legal entity referred to in subsection (1) to give effect to the purposes set out in that subsection and to provide for payments to be made into and out of the fund under that agreement. 17. Section 19 of the Act is repealed and the following substituted: Disability retirement 19. (1) Every teacher shall be retired under the pension plan where he or she is suffering from a physical or mental impairment that prevents the teacher from performing the duties of the employment in which he or she was engaged before the commencement of the impairment provided that the impairment is medically certified to the satisfaction of the corporation as likely to be permanent. (2) The corporation may, by notice in writing, require a pensioner who has retired under subsection (1) or who is receiving a pension under subsection 21(3.1) and who has not attained normal retirement age to be available for a medical examination that may be prescribed. (3) Where a pensioner referred to in subsection (2) (a) fails to be present for a medical examination in accordance with that subsection, his or her pension shall be discontinued during the period in which he or she fails to comply with the request contained in the notice; or (b) who, upon the medical examination referred to in that subsection, is found to be in good health, his or her pension shall be discontinued immediately. 18. Section 20 of the Act is amended by adding immediately after subsection (1) the following: (1.1) A teacher who has reached early retirement age and has been credited with not less than 5 years of pensionable service may elect to retire and receive an actuarially reduced pension. 19. (1) Subsection 21(1) of the Act is repealed and the following substituted: Deferred pension 21. (1) Effective September 1, 2016, a teacher who terminated employment, or whose employment was terminated for a reason other than disability, and who has been credited with not less than 5 years but less than 24.5 years of pensionable service may elect to receive a deferred pension calculated in accordance with section 22 and 22.1 and paid from age 62 or, if he or she so qualifies, paid in accordance with section 20 and the other provisions of this Act. (2) Subsection 21(3.1) of the Act is amended by deleting the word "minister" and substituting the word "corporation". (3) Paragraph 21(4)(b) of the Act is amended by deleting the word "minister" and substituting the word "corporation". 20. Subsection 24(2) of the Act is repealed. 21. Section 26 of the Act is repealed and the following substituted: Survivor benefits 26. (1) A surviving principal beneficiary of (a) a pensioner; (b) a deferred pensioner; or (c) a teacher with at least 5 years of pensionable service is entitled, upon the death of the pensioner, deferred pensioner or teacher to a survivor benefit equal to 60% of the pension entitlement of the pensioner, deferred pensioner or teacher. (2) Where the pension entitlement of the pensioner, deferred pensioner or teacher on his or her death includes the bridge benefit determined under subsections 22(3) and 22.1(3), the bridge benefit shall continue until the last day of the month in which the deceased pensioner, deferred pensioner or teacher would have reached 65 years and the survivor benefit shall be adjusted accordingly. (3) The survivor benefit shall be paid to the surviving principal beneficiary for life and shall commence on the first day of the month following the month in which the pensioner or teacher dies. (4) Where a surviving principal beneficiary dies while in receipt of a survivor benefit, the survivor benefit shall be paid to or for the benefit of any surviving children of the teacher, pensioner or deferred pensioner, while they are under the age of 18 years, or under the age of 24 years while they are in full-time attendance at a recognized school or post-secondary institution. (5) Where a pensioner referred to in paragraph (1)(a) dies leaving no surviving principal beneficiary, the survivor benefit shall be paid to or for the benefit of his or her surviving children, while they are under the age of 18 years, or under the age of 24 years while they are in full-time attendance at a recognized school or post-secondary institution. (6) Subsection (2) is considered to have come into force on September 1, 1998. 22. Subsection 27(2) of the Act is amended by deleting the word "minister" and substituting the word "corporation". 23. Subsection 29(1) of the Act is amended by deleting the word "minister" and substituting the word "corporation". 24. (1) Paragraph 30(1)(a) of the Act is repealed and the following substituted: (a) a pension calculated under sections 22 and 22.1, not exceeding the maximum annual allowable registered pension permitted under the Income Tax Act (Canada), shall be paid from the fund; and (2) Subsection 30(2) of the Act is repealed and the following substituted: (2) Benefits payable under sections 26, 27, 27.1 and 28 and a return of contributions, commuted value or other lump sum payment in respect of an entitlement under this Act shall be paid from the fund and the supplementary account on the same basis and in the same proportions as a pension payment under subsection (1). 25. Section 31 of the Act is repealed and the following substituted: Attachment 31. A
pension payable under the plan shall not be assigned, charged, attached,
anticipated or given as security and is exempt from execution, seizure or
attachment, and a transaction purporting to assign, charge, attach, anticipate
or give as security that pension is void, except where this section is
overridden by another Act, subject to the provisions of the Pensions Benefits Act, 1997. 26. Section 33 of the Act is amended by deleting the word "minister" wherever it occurs and by substituting the word "corporation". 27. Section 34 of the Act is amended by deleting the word "minister" and substituting the word "corporation". 28. Section 35 of the Act is repealed. 29. (1) Subsection 38(1) of the Act is amended by deleting the words "minister or of the Lieutenant-Governor in Council" and substituting the word "corporation". (2) Subsection 38(2) of the Act is repealed and the following substituted: (2) Where a teacher or other person proposes to appeal under subsection (1), he or she shall, within 60 days after he or she has received the decision of the corporation, serve on the corporation a written notice of his or her intention to appeal to a judge of the Trial Division. 30. Section 39 of the Act is amended by deleting the word "minister" wherever it occurs and substituting the word "corporation". 31. The Act is amended by adding immediately after section 39 the following: Corporation established 39.1 (1) There is established a corporation without share capital to be known as the Teachers' Pension Plan Corporation. (2) The head office of the corporation shall be at
(3) The corporation is not an agent of the Crown. (4) The provisions of this section and sections 39.2 to section 39.7 constitute the articles of the corporation. (5) A director or a person employed by the corporation does not become, by reason of that office or employment only, an officer or employee of the Crown. Application of
Acts 39.2 (1) The Corporations Act, except section 27, paragraphs 31(a), (d) and (e), sections 32, 167, 172, 190, 191, 198, 199, 200, 201, 204, 277, 278, 378, and subsection 422(1), does not apply to the corporation. (2) The Lieutenant-Governor in Council, on the recommendation of the sponsor body, may make regulations directing that additional provisions of the Corporations Act apply to the corporation, provided that those regulations do not conflict with this Act. (3) Where there is a conflict between a provision referred to in subsection (1) and this Act, this Act prevails. Objects of corporation
39.3 The objects of the corporation are (a) to act as trustee of the fund; and (b) to act as administrator of the pension plan, and to exercise those other powers and perform those other duties as may be expressly conferred upon the corporation under the joint sponsorship agreement. Board 39.4 (1) For the exercise and discharge of the powers and duties of the corporation, there shall be a board of directors comprised of not less than 6 and not more than 16 persons. (2) A director of the corporation, in exercising his or her powers and discharging his or her duties, shall (a) act honestly and in good faith with a view to the best interests of the pension plan and for the benefit of all teachers, pensioners and deferred pensioners; and (b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. (3) The board, by resolution, may make, amend or repeal by-laws that regulate the business or affairs of the corporation. (4) By-laws made by the board shall not conflict with the joint sponsorship agreement. Corporation and
board bound 39.5 The corporation and the board are bound by and shall act in accordance with the joint sponsorship agreement as provided for in that agreement. Funded status of
plan 39.6 Actuarial surpluses and deficits relating to the pension plan shall be shared in accordance with the funding policy as follows: (a) 50% shall be shared with and borne by government; and (b) 50% shall be shared with and borne by the members of the pension plan. No liability 39.7 The corporation is not liable for loss or damage suffered by another person because of anything done or omitted to be done under or in the exercise or supposed exercise of the powers conferred by this Act, where those powers have been exercised in accordance with subsection 39.4(2). Binding effect 39.8 (1) The sponsor body's decisions, rules, policies and procedures made or established in accordance with the joint sponsorship agreement, the pension plan or the fund shall be binding on the corporation, government, teachers, pensioners and deferred pensioners and their respective beneficiaries, dependents, estates, heirs, executors, administrators, successors and assigns. (2) The corporation's decisions, rules, policies and procedures shall be binding on the sponsor body, government, teachers, pensioners and deferred pensioners and their respective beneficiaries, dependents, estates, heirs, executors, administrators, successors and assigns. 32. Subsection 40(2) of the Act is repealed and the following substituted: (2) Unless otherwise specified, the Pensions Benefits Act, 1997 does not apply to this Act. 33. Section 42 of the Act repealed and the following substituted: Directives 42. (1) The corporation or the sponsor body, as applicable, may issue directives for the purpose of this Act. (2) Where, before the coming into force of this section, the minister issued a directive to give effect to the purpose of this Act, that directive shall continue in force for one year after the coming into force of this subsection as if it had been made by the corporation or sponsor body, as appropriate, unless it has been superseded by a directive of the corporation or the sponsor body under the authority of subsection (1). (3) A directive which has not been superseded under subsection (2) shall expire at the end of the period referred to in that subsection. 34. Paragraph 43(c) of the Act is amended by deleting the word "minister" and substituting the word "corporation". Commencement 35. A section, subsection, paragraph, subparagraph or clause of this Act comes into force on a day or days to be proclaimed by the Lieutenant-Governor in Council. ©Queen's Printer |