Vol. 136, No. 5 — February 27, 2002

Registration
SOR/2002-73 8 February, 2002

SPECIAL RETIREMENT ARRANGEMENTS ACT

Regulations Amending the Retirement Compensation Arrangements Regulations, No. 1

P.C. 2002-192 8 February, 2002

Her Excellency the Governor General in Council, on the recommendation of the President of the Treasury Board, pursuant to sections 10, 11, 13, 15 and 28 of the Special Retirement Arrangements Act (see footnote a) , hereby makes the annexed Regulations Amending the Retirement Compensation Arrangements Regulations, No. 1.

REGULATIONS AMENDING THE RETIREMENT COMPENSATION ARRANGEMENTS REGULATIONS, NO. 1

AMENDMENTS

1. (1) Paragraph (a) of the definition "Minister" in section 2 of the Retirement Compensation Arrangements Regulations, No. 1 (see footnote 1)  is replaced by the following:

(a) for the purposes of Parts I and II, the Minister of Public Works and Government Services,

(2) Section 2 of the Regulations is amended by adding the following in alphabetical order:

"Canadian Forces Pension Fund" has the same meaning as in subsection 2(1) of the Canadian Forces Superannuation Act; (Caisse de retraite des Forces canadiennes)

"Public Service Pension Fund" has the same meaning as in subsection 3(1) of the Public Service Superannuation Act; (Caisse de retraite de la fonction publique)

"Royal Canadian Mounted Police Pension Fund" has the same meaning as in subsection 3(1) of the Royal Canadian Mounted Police Superannuation Act; (Caisse de retraite de la Gendarmerie royale du Canada)

2. Paragraphs 4(b) and (c) of the Regulations are replaced by the following:

(b) on or after December 15, 1994 is required to contribute to the Canadian Forces Superannuation Account or the Canadian Forces Pension Fund;

(c) on or after December 15, 1994 is required to contribute to the Royal Canadian Mounted Police Superannuation Account or the Royal Canadian Mounted Police Pension Fund;

3. The headings before section 7 of the Regulations are replaced by the following:

Contributions and Benefits

4. Subsections 8(1) and (2) of the Regulations are replaced by the following:

8. (1) Subject to subsection (2), a participant referred to in paragraph 4(d) shall contribute to the Retirement Compensation Arrangements Account at a rate equal to twice the applicable rate set out in section 5 of the Public Service Superannuation Act, read without reference to paragraph 5(6)(b) of that Act.

(2) If the aggregate of the period of pensionable service of a participant — consisting of pensionable service under the Public Service Superannuation Act, other pensionable service as determined under subsection 5(5) of that Act and the period specified by the participant in an election under paragraph 11(1)(d) of the Act — exceeds 35 years, the participant shall contribute to the Retirement Compensation Arrangements Account, in respect of the portion of the aggregate period that exceeds 35 years, at a rate equal to twice the rate set out in subsection 5(3), (3.1) or (4) of the Public Service Superannuation Act, as the case may be, read without reference to paragraph 5(6)(b) of that Act.

5. Subsection 9(2) of the Regulations is replaced by the following:

(2) If the aggregate of the period of pensionable service of a participant — consisting of pensionable service under the Public Service Superannuation Act, other pensionable service as determined under subsection 5(5) of that Act and the period specified by the participant in an election under section 14 of that Act as that section read immediately before December 15, 1994 — exceeds 35 years, the participant shall contribute to the Retirement Compensation Arrangements Account, in respect of the portion of the aggregate period that exceeds 35 years, at a rate equal to the rate established in respect of the participant under that section as it read immediately before that date.

6. Subsection 13(3) of the Regulations is amended by striking out the word "and" at the end of paragraph (d) and by adding the following after paragraph (e):

(f) the day the participant exercises an option for a transfer value pursuant to section 13.01 of the Public Service Superannuation Act, and

(g) the day on which the participant dies.

7. The portion of subsection 14(2) of the Regulations before paragraph (a) is replaced by the following:

(2) If a participant is entitled under the Canadian Forces Superannuation Act, the Royal Canadian Mounted Police Superannuation Act or the Members of Parliament Retiring Allowances Act to a benefit, other than a return of contributions, in respect of a period of service,

8. (1) Subsection 15(1) (see footnote 2)  of the Regulations is replaced by the following:

15. (1) Subject to section 15.1, a participant who ceases to be required to contribute to the Retirement Compensation Arrangements Account under this Part may opt to receive a benefit of the type that the participant would otherwise be entitled to receive under section 13 of the Public Service Superannuation Act based on the participant's age at the time of ceasing to be required to contribute under this Part and on the aggregate of the pensionable service to the credit of the participant under that Act and the period of service in respect of which the participant was required to contribute under this Part.

(2) Subsection 15(3) of the Regulations is replaced by the following:

(3) Subject to subsection 17(1), the amount of any benefit to which a participant is entitled is an amount equal to

(a) the amount that would be payable to the participant under Part I of the Public Service Superannuation Act, as if

(i) the period of pensionable service to the credit of the participant is the total of the period in respect of which the participant was required to contribute under this Part and the period of pensionable service to the credit of the participant under that Act, not exceeding thirty-five years,
(ii) for the purpose of determining the average annual salary in subsection 11(1) of that Act, the salary of the participant while the participant was required to contribute under this Part is that referred to in subsection 8(3) or 9(1), and
(iii) the computation referred to in paragraph 11(1)(b) of that Act is made without reference to the annual rate of salary fixed or determined by the regulations referred to in subparagraph 11(1)(b)(iii) of that Act,

less

(b) the aggregate of the following amounts, namely,

(i) any annuity or annual allowance payable to the participant under the Public Service Superannuation Act in respect of the period of pensionable service to the credit of the participant,
(ii) any benefit payable under Part II to the participant in respect of the period of pensionable service to the credit of the participant under that Act, and
(iii) any supplementary benefits payable with respect to amounts referred to in subparagraphs (i) and (ii) accrued between the date the participant ceased to be employed in the Public Service and the date the participant ceased to be required to contribute under this Part.

(4) Where a participant is entitled to an annuity or annual allowance under the Public Service Superannuation Act and opts to receive a benefit in the form of an annuity or annual allowance under this Part, the benefit becomes payable on the same day as the participant's annuity or annual allowance becomes payable under that Act.

9. Sections 18 to 19 (see footnote 3)  of the Regulations are replaced by the following:

18. On the death of a participant, a benefit shall be paid to any survivor or child of the participant to whom an allowance is payable under the Public Service Superannuation Act, subject to the conditions set out in subsection 10(3) of that Act, in an amount equal to

(a) the allowance that would be payable to the survivor or child of the participant under Part I of that Act, calculated as if

(i) the period of pensionable service to the credit of the participant is the total of the period in respect of which the participant was required to contribute under this Part and the period of pensionable service to the credit of the participant under that Act, not exceeding 35 years,
(ii) for the purpose of determining the average annual salary referred to in subsection 11(1) of that Act, the salary of the participant while the participant was required to contribute under this Part is that referred to in subsection 8(3) or 9(1), and
(iii) the maximum monthly amount that may be paid to a survivor or child pursuant to subsections 30.6(1) and (2) of the Public Service Superannuation Regulations do not apply,

less

(b) the aggregate of the following amounts, namely,

(i) any allowance payable to the survivor, or to or on behalf of the child of a participant, under the Public Service Superannuation Act in respect of the period of pensionable service to the credit of the participant,
(ii) any benefit payable to the survivor, or to or on behalf of the child of a participant, under Part II in respect of the period of pensionable service to the credit of the participant under the Public Service Superannuation Act, and
(iii) any supplementary benefits payable with respect to amounts referred to in subparagraphs (i) and (ii) accrued between the date the participant ceased to be employed in the Public Service and the date the participant ceased to be required to contribute under this Part.

18.1 (1) The survivor or child of the participant described in subsection 15.1(1) who would otherwise be entitled to an allowance payable under the Public Service Superannuation Act but for the participant having exercised an option for a transfer value under section 13.01 of that Act is entitled to a benefit under this Part if the participant opted or is deemed to have opted to receive a deferred annuity under this Part.

(2) Subject to the conditions set out in subsection 10(3) of the Public Service Superannuation Act, the amount payable to the survivor or child is an amount equal to the allowance that would be payable to the survivor or child under Part I of that Act as if the period in respect of which the participant was required to contribute under this Part were a period of pensionable service to the participant's credit under that Act and the salary in respect of which contributions were made under this Part were the participant's salary for the purpose of that Act.

19. (1) A survivor of a participant who is not entitled to the benefit set out in section 18 or 18.1 due to the application of subsection 26(1) of the Public Service Superannuation Act shall be entitled to the benefit referred to in those sections if the survivor married the participant or began cohabiting in a relationship of a conjugal nature with the participant during the period in respect of which the participant was required to contribute under this Part.

(2) A person who is not entitled to the benefit set out in section 18 or 18.1 due to the application of subsection 26(2) of the Public Service Superannuation Act shall be entitled to the benefit referred to in those sections if the person became the child, within the meaning of "child" in subsection 3(1) of that Act, of the participant during the period in respect of which the participant was required to contribute under this Part.

(3) For the purpose of subsection (2), a child born posthumously to a participant is entitled to a benefit under section 18 or 18.1 if the child is born following a gestation period commencing before the date when the participant ceased to be required to contribute under this Part.

10. Section 22 (see footnote 4)  of the Regulations is replaced by the following:

22. (1) If a participant dies, leaving no survivor or child to whom a benefit may be paid under this Part or Part I of the Public Service Superannuation Act, or if the persons to whom such a benefit may be paid die or cease to be entitled to the benefit, a benefit of the type referred to in subsection 27(2) of that Act shall be paid to the beneficiary named by the participant under Part II of that Act or, if no beneficiary is named or the named beneficiary does not survive the participant, to the estate of the participant, subject to the same conditions as are specified in that Act for payment of such a benefit.

(2) Subject to subsection (3), if five times the aggregate of the benefits referred to in paragraphs (a), (b) and (c) is greater than the total of the participant's contributions under this Part and Part II and under Part I of the Public Service Superannuation Act together with interest thereon calculated at the rate and in the manner set out in subsection 10(9) of that Act, the amount of a benefit payable under subsection (1) shall be five times the aggregate of

(a) the annual amount of any benefit payable to the participant under this Part, determined in accordance with subsection 15(3) or section 15.4 not reduced on account of the age or period of pensionable service of the participant,

(b) the annual amount of any benefit payable to the participant under Part II, determined in accordance with subsection 35(2) or section 38.4 not reduced on account of the age or period of pensionable service of the participant, and

(c) the amount of any annuity payable to the participant under the Public Service Superannuation Act, determined in accordance with subsection 11(1) of that Act.

(3) The amount of the benefit referred to in subsection (2) shall be reduced by the following amounts paid to or in respect of the participant:

(a) any amount paid under this Part;

(b) any amount paid under Division I and II of Part II, excluding any amount paid under paragraph 38.1(1)(a) and section 41.5, but including any amount paid under section 39; and

(c) any amount paid under Part I of the Public Service Superannuation Act, excluding any amount paid under subsection 13.01(2) of that Act, but including any amount paid under section 27 of that Act.

(4) If the amount determined under subsection (2) is less than the total of the participant's contributions under this Part and Part II and under Part I of the Public Service Superannuation Act together with interest thereon, calculated at the rate and in the manner set out in subsection 10(9) of that Act, the benefit payable under subsection (1) shall be equal to the participant's contributions under this Part together with interest thereon calculated at the same rate and in the same manner, reduced by any amount paid to or in respect of the participant under this Part.

11. Section 29 of the Regulations is replaced by the following:

29. (1) Any person who, on or after December 15, 1994, is required to contribute to the Superannuation Account or the Public Service Pension Fund and whose annual rate of salary is greater than the annual rate of salary determined under section 5.1 of the Public Service Superannuation Regulations shall contribute to the Retirement Compensation Arrangements Account on the excess salary at the same rates and subject to the same conditions as are set out in section 5 of the Public Service Superannuation Act.

(2) Any person employed in operational service within the meaning of section 15 of the Public Service Superannuation Act who on or after December 15, 1994 is required to contribute to the Superannuation Account or Public Service Pension Fund and whose annual rate of salary is greater than the annual rate of salary determined under section 5.1 of the Public Service Superannuation Regulations shall contribute to the Retirement Compensation Arrangements Account on the excess salary an additional amount at the rate set out in section 19 of that Act.

(3) Any person employed in operational service within the meaning of section 53 of the Public Service Superannuation Regulations who on or after December 15, 1994 is required to contribute to the Superannuation Account or Public Service Pension Fund and whose annual rate of salary is greater than the annual rate of salary determined under section 5.1 of those Regulations shall contribute to the Retirement Compensation Arrangements Account an additional amount on the excess salary at the rate set out in subsection 55(1) of those Regulations.

(4) Any period during which a participant was required to contribute to the Retirement Compensation Arrangements Account under Part I is to be included in calculating years of pensionable service for the purposes of determining applicable contribution rates pursuant to subsections (1) to (3).

12. Section 34 of the Regulations is repealed.

13. Subsection 35(2) of the Regulations is replaced by the following:

(2) Subject to subsection 36(1), the benefit to which a participant is entitled shall be in an amount equal to

(a) the amount of the annuity or annual allowance that would be payable to the participant under Part I of the Public Service Superannuation Act if paragraph 11(1)(b) of that Act applied without reference to the annual rate of salary fixed by or determined in accordance with the regulations referred to in subparagraph 11(1)(b)(iii) of that Act,

less

(b) any annuity or annual allowance payable to the participant under the Public Service Superannuation Act in respect of the period of pensionable service to the credit of the participant.

14. Section 39 (see footnote 5)  of the Regulations is replaced by the following:

39. (1) If a participant dies, leaving no survivor or child to whom a benefit may be paid under this Part or Part I of the Public Service Superannuation Act, or if the persons to whom such a benefit may be paid die or cease to be entitled to the benefit, a benefit of the type referred to in subsection 27(2) of that Act shall be paid to the beneficiary named by the participant under Part II of that Act or, if no beneficiary is named or the named beneficiary does not survive the participant, to the estate of the participant, subject to the same conditions as are specified in that Act for payment of such a benefit.

(2) Subject to subsection (3), if five times the aggregate of the benefits referred to in paragraphs (a) and (b) is greater than the total of the participant's contributions under this Part and Part I of the Public Service Superannuation Act, together with interest thereon calculated at the rate and in the manner set out in subsection 10(9) of that Act, the amount of a benefit payable under subsection (1) shall be five times the aggregate of

(a) the annual amount of any benefit payable to the participant under this Division, determined in accordance with subsection 35(2) or section 38.4 not reduced on account of the age or period of pensionable service of the participant, and

(b) the amount of any annuity payable under the Public Service Superannuation Act, determined in accordance with subsection 11(1) of that Act.

(3) The amount of the benefit referred to in subsection (2) shall be reduced by the following amounts paid to or in respect of the participant:

(a) any amount paid under this Part, excluding any amount paid under section 41.5;

(b) any amount paid under Part I of the Public Service Superannuation Act, excluding any amount paid under subsection 13.01(2) of that Act, but including any amount paid under section 27 of that Act; and

(c) any amount paid under section 19 in respect of the pensionable service to the credit of the participant under Part I of the Public Service Superannuation Act.

(4) If the amount determined under subsection (2) is less than the total of the participant's contributions under this Part and Part I of the Public Service Superannuation Act together with interest thereon calculated at the rate and in the manner set out in subsection 10(9) of that Act, the benefit payable under subsection (1) shall be equal to the participant's contributions under this Part together with interest thereon calculated at the same rate and in the same manner reduced by any amount paid to or in respect of the participant under this Part, excluding any amount paid to the participant under section 41.5.

15. The portion of subsection 41.1(1) (see footnote 6)  of the Regulations before paragraph (a) is replaced by the following:

41.1 (1) Subject to subsection 36(1), a benefit shall be paid to a participant, to a survivor or child of a participant or to a beneficiary of an amount payable under subsection 27(2) of the Public Service Superannuation Act, as the case may be, in an amount equal to

16. Subsection 41.3(1) (see footnote 7)  of the Regulations is replaced by the following:

41.3 (1) On the death of any participant who opted to receive a deferred annuity under paragraph 38.1(1)(b) or is deemed to have opted to receive a deferred annuity under subsection 38.2(2), a benefit shall be paid to the survivor of the participant to whom an allowance would be payable under the Public Service Superannuation Act had the participant not exercised an option for a transfer value under section 13.01 of that Act, subject to the same terms and conditions that would apply if the survivor was the survivor of a contributor who was entitled to a deferred annuity under Part I of that Act, in the form of an immediate annual allowance in the amount of one half of the deferred annuity determined in accordance with section 38.4 after that deferred annuity has been increased in accordance with section 41.4.

17. The Regulations are amended by adding the following after section 41.6:

DIVISION III

TRANSFERS OF FUNDS TO RETIREMENT COMPENSATION ARRANGEMENTS ESTABLISHED BY CERTAIN CORPORATIONS

General

41.7 Every person who has accrued benefits under this Part that become payable under a retirement compensation arrangement of a corporation to which a transfer of funds is effected under this Division ceases to be entitled to any benefit under this Part in respect of those accrued benefits.

Canada Post Corporation

Interpretation

41.8 The following definitions apply in this section and sections 41.81 to 41.84.

"Canada Post" means the Canada Post Corporation established by the Canada Post Corporation Act. (Postes Canada)

"Canada Post Supplementary Retirement Arrangement" means a supplementary pension plan that has been established by Canada Post under paragraph 46.3(1)(b) of the Public Service Superannuation Act and that has been approved by the Treasury Board under subsection 46.3(2) of that Act. (régime supplémentaire de retraite de Postes Canada)

Application

41.81 This Division applies in respect of the benefits accrued under this Part to persons who, by virtue of the coming into force of section 227 of the Public Sector Pension Investment Board Act, ceased to be employed in the Public Service for the purposes of the Public Service Superannuation Act on October 1, 2000 and

(a) were employed by Canada Post and were contributors under the Public Service Superannuation Act on September 30, 2000, and

(b) remains employed by Canada Post for at least one day following September 30, 2000.

Valuation

41.82 (1) Subject to subsections (2) and (3), the actuarial present value of the benefits accrued under this Part to the credit of the persons referred to in section 41.81 is calculated as of September 30, 2000 using the actuarial methods and assumptions contained in the Actuarial Report of March 31, 1996 on the Pension Plan for the Public Service of Canada, tabled in Parliament on March 18, 1998 by the President of the Treasury Board.

(2) The actuarial assumptions contained in the Actuarial Report referred to in subsection (1) are varied as follows:

(a) the rate of interest for the period beginning on October 1, 2000 and ending on September 30, 2015 is equal to 1.95% per annum plus one-half of the rates of increase in the consumer price index for that period as set out in the Actuarial Report;

(b) the rate of interest for the period after September 30, 2015 is equal to 3.25% per annum;

(c) the rate of increase in salaries and the yearly maximum pensionable earnings is 3.9% per annum for the period beginning on October 1, 2000 and ending on September 30, 2001 and 4% per annum after that;

(d) the retirement rates are the rates set out in Schedule 1, multiplied by the percentage set out in Schedule 3, based on the projected number of salary level increases after October 1, 2000 set out in column 1 of Schedule 3 and the number of completed years of service after October 1, 2000 set out in column 2 of that Schedule;

(e) the termination rates are the rates set out in Schedule 2, multiplied by the percentage set out in Schedule 3, based on the projected number of salary level increases after October 1, 2000 set out in column 1 of Schedule 3 and the number of completed years of service after October 1, 2000 set out in column 2 of that Schedule;

(f) transfer values on termination of employment shall be calculated at twice the interest rates specified in paragraphs (a) and (b); and

(g) the Assumed Seniority and Promotional Salary Increase scale set out in Table 2A of the Actuarial Report is replaced by the probability distribution of rank at termination of employment set out in Schedule 4.

(3) The amount calculated in accordance with subsection (1) shall be net of the present value of any instalment payments in respect of periods of service where such payments would have been due and payable into the Retirement Compensation Arrangements Account after September 30, 2000 by persons referred to in section 41.81 had those persons remained employed in the Public Service for the purposes of the Public Service Superannuation Act.

(4) For the purpose of subsection (3), any instalment payment that is attributable to a period of leave of absence without pay is calculated as if it were due and payable on October 1, 2000.

(5) For the purpose of subsection (3), the present value is calculated using an interest rate of 3.45% per annum.

Transfer of Funds

41.83 (1) The amount calculated in accordance with section 41.82, together with interest calculated in accordance with subsection (2), shall be paid by the President of the Treasury Board over a period not exceeding two years beginning on October 1, 2000.

(2) Interest on each payment made by the President of the Treasury Board shall be calculated at a rate of 7.25% per annum from October 1, 2000 to the end of the day preceding each payment.

41.84 The amount calculated in accordance with section 41.82 together with interest calculated in accordance with subsection 41.83(2) shall be paid to the Supplementary Fund established under the Canada Post Supplementary Retirement Arrangement out of the Retirement Compensation Arrangements Account.

18. The heading of Part III of the Regulations is replaced by the following:

PARTICIPATION UNDER THE CANADIAN FORCES SUPERANNUATION ACT

19. Section 43 of the Regulations is replaced by the following:

DIVISION I

ADDITIONAL PENSIONABLE EARNINGS

43. Any person who, on or after December 15, 1994, is required to contribute to the Canadian Forces Superannuation Account or the Canadian Forces Pension Fund and whose annual rate of pay is greater than the annual rate of pay determined under section 12.1 of the Canadian Forces Superannuation Regulations shall contribute to the Retirement Compensation Arrangements Account on the excess pay at the same rates and subject to the same conditions as are set out in section 5 of the Canadian Forces Superannuation Act.

20. Subsection 48(2) of the Regulations is replaced by the following:

(2) Subject to subsection 49(1), the benefit to which a participant is entitled shall be in an amount equal to

(a) the amount of the annuity that would be payable to the participant under Part I of the Canadian Forces Superannuation Act if paragraph 15(1)(b) of that Act applied without reference to the annual rate of pay fixed by or determined in accordance with the regulations referred to in subparagraph 15(1)(b)(iii) of that Act,

less

(b) any annuity payable to the participant under the Canadian Forces Superannuation Act in respect of the period of pensionable service to the credit of the participant.

21. Section 52 of the Regulations is replaced by the following:

52. (1) If a participant dies, leaving no survivor or child to whom a benefit may be paid under this Part or Part I of the Canadian Forces Superannuation Act, or if the persons to whom such a benefit may be paid die or cease to be entitled to the benefit, a benefit of the type referred to in section 39 of that Act shall be paid to the beneficiary named by the participant under Part II of that Act or, if no beneficiary is named or the named beneficiary does not survive the participant, to the estate of the participant, subject to the same conditions as are specified in that Act for payment of such a benefit.

(2) Subject to subsection (3), if five times the aggregate of the benefits referred to in paragraphs (a) and (b) is greater than the total of the participant's contributions under this Part and Part I of the Canadian Forces Superannuation Act together with interest thereon calculated at the rate and in the manner set out in section 13 of that Act, the amount of a benefit payable under subsection (1) shall be five times the aggregate of

(a) the annual amount of any benefit payable to the participant under this Division, determined in accordance with subsection 48(2) not reduced on account of the age or period of pensionable service of the participant, and

(b) the amount of any annuity payable to the participant under the Canadian Forces Superannuation Act, determined in accordance with subsection 15(1) of that Act.

(3) The amount of the benefit referred to in subsection (2) shall be reduced by the following amounts paid to or in respect of the participant:

(a) any amount paid under this Part; and

(b) any amount paid under Part I of the Canadian Forces Superannuation Act, including any amount paid under section 39 of that Act.

(4) If the amount determined under subsection (2) is less than the total of the participant's contributions under this Part and Part I of the Canadian Forces Superannuation Act together with interest thereon calculated at the rate and in the manner set out in section 13 of that Act, the benefit payable under subsection (1) shall be equal to the participant's contributions under this Part together with interest thereon calculated at the same rate and in the same manner reduced by any amount paid to or in respect of the participant under this Part.

22. The Regulations are amended by adding the following after section 54:

DIVISION II

ADDITIONAL BENEFITS

54.1 (1) A benefit shall be paid to a survivor or child of a participant equal to the amount by which an allowance payable to that person under the Canadian Forces Superannuation Act is reduced as a result of the operation of the limits set out in subsections 19.2(1) to (5) of the Canadian Forces Superannuation Regulations, which limits apply, as provided in subsection 19.2(6) of those Regulations, to amounts payable in respect of a contributor who dies after the coming into force of this section.

(2) The benefit referred to in subsection (1) is payable in the same manner and subject to the same terms and conditions as apply to the payment of the allowance before the reduction.

23. The heading of Part IV of the Regulations is replaced by the following:

PARTICIPATION UNDER THE ROYAL CANADIAN MOUNTED POLICE SUPERANNUATION ACT

24. Section 56 of the Regulations is replaced by the following:

DIVISION I

ADDITIONAL PENSIONABLE EARNINGS

56. Any person who, on or after December 15, 1994, is required to contribute to the Royal Canadian Mounted Police Superannuation Account or the Royal Canadian Mounted Police Pension Fund and whose annual rate of pay is greater than the annual rate of pay determined under section 8.1 of the Royal Canadian Mounted Police Superannuation Regulations shall contribute to the Retirement Compensation Arrangements Account on the excess pay at the same rates and subject to the same conditions as are set out in section 5 of the Royal Canadian Mounted Police Superannuation Act.

25. Section 60 of the Regulations is replaced by the following:

60. A participant ceases to be required to contribute to the Retirement Compensation Arrangements Account under this Part on the day on which the participant ceases to be required to contribute under Part I of the Royal Canadian Mounted Police Superannuation Act.

26. Subsection 61(2) of the Regulations is replaced by the following:

(2) Subject to subsection 62(1), the benefit to which a participant is entitled shall be in an amount equal to

(a) the amount of the annuity or annual allowance that would be payable to the participant under Part I of the Royal Canadian Mounted Police Superannuation Act if paragraph 10(1)(b) of that Act applied without reference to the annual rate of pay fixed by or determined in accordance with the regulations referred to in subparagraph 10(1)(b)(iii) of that Act,

less

(b) any annuity or annual allowance payable to the participant under the Royal Canadian Mounted Police Superannuation Act in respect of the period of pensionable service to the credit of the participant.

27. Section 65 of the Regulations is replaced by the following:

65. (1) If a participant dies, leaving no survivor or child to whom a benefit may be paid under this Part or Part I of the Royal Canadian Mounted Police Superannuation Act, or if the persons to whom such a benefit may be paid die or cease to be entitled to the benefit, a benefit of the type referred to in section 22 of that Act shall be paid to the beneficiary named by the participant under section 31 of that Act or, if no beneficiary is named or the named beneficiary does not survive the participant, to the estate of the participant, subject to the same conditions as are specified in that Act for payment of such a benefit.

(2) Subject to subsection (3), if five times the aggregate of the benefits referred to in paragraphs (a) and (b) is greater than the total of the participant's contributions under this Part and under Part I of the Royal Canadian Mounted Police Superannuation Act, together with interest thereon calculated at the rate and in the manner set out in subsection 9(6) of that Act, the amount of a benefit payable under subsection (1) shall be five times the aggregate of

(a) the annual amount of any benefit payable to the participant under this Division, determined in accordance with subsection 61(2), not reduced on account of the age or period of pensionable service of the participant, and

(b) the amount of any annuity payable to the participant under the Royal Canadian Mounted Police Superannuation Act, determined in accordance with paragraph 10(1)(a) of that Act.

(3) The amount of the benefit referred to in subsection (2) shall be reduced by the following amounts paid to or in respect of the participant:

(a) any amount paid under this Part; and

(b) any amount paid under Part I of the Royal Canadian Mounted Police Superannuation Act, including any amount paid under section 22 of that Act.

(4) If the amount determined under subsection (2) is less than the total of the participant's contributions under this Part and Part I of the Royal Canadian Mounted Police Superannuation Act together with interest thereon calculated at the rate and in the manner set out in subsection 9(6) of that Act, the benefit payable under subsection (1) shall be equal to the participant's contributions under this Part together with interest thereon calculated at the same rate and in the same manner reduced by any amount paid to or in respect of the participant under this Part.

28. The Regulations are amended by adding the following after section 67:

DIVISION II

ADDITIONAL BENEFITS

67.1 (1) A benefit shall be paid to a survivor or child of a participant equal to the amount by which an allowance payable to that person under the Royal Canadian Mounted Police Superannuation Act is reduced as a result of the operation of the limits set out in subsections 20.2(1) to (5) of the Royal Canadian Mounted Police Superannuation Regulations, which limits apply, as provided in subsection 20.2(6) of those Regulations, to amounts payable in respect of a contributor who dies after the coming into force of this section.

(2) A benefit shall be paid to a participant equal to the amount by which an annual allowance payable to that person under the Royal Canadian Mounted Police Superannuation Act is reduced as a result of the operation of the limit set out in subsection 52(1) of the Royal Canadian Mounted Police Superannuation Regulations, which limit applies, as provided in subsection 52(2) of those Regulations, to an annual allowance payable in respect of a contributor who ceases to be employed after the coming into force of this section.

(3) The benefit referred to in subsection (1) or (2) is payable in the same manner and subject to the same terms and conditions as apply to the payment of the allowance or annual allowance referred to in that subsection, as the case may be, before the reduction.

29. Section 68 of the Regulations is replaced by the following:

68. (1) Subject to subsection (2), supplementary benefits shall be paid in respect of periodic payments payable under any of Parts I to IV at the same rates and in the same manner as are specified under the Supplementary Retirement Benefits Act for the payment of supplementary payments.

(2) Supplementary benefits in respect of benefits payable under Part I shall be calculated in reference to the date on which the participant ceases to be required to contribute to the Retirement Compensation Arrangement Account under that Part.

30. (1) Clause 70(2)(b)(i)(B) of the Regulations is replaced by the following:

(B) the rate used in estimating an amount under paragraph 18(1)(a) of the Act in respect of that month less the applicable rate set out in section 5 of the Public Service Superannuation Act, divided by 2, and

(2) Clause 70(2)(b)(ii)(B) of the Regulations is replaced by the following:

(B) the rate used in estimating an amount under paragraph 18(1)(a) of the Act in respect of that month.

31. The Regulations are amended by adding the following after section 71:

SCHEDULE 1
(Paragraph 41.82(2)(d))

RETIREMENT RATES
(Age Last Basis)

MALE

Age	Completed Years of Service
	1 to 3	4 to 23	24 to 28	29	30 to 33	34	35+
49	0.04	0.02	0.03	0.06	0.08	0.14	0.12
50	0.04	0.02	0.03	0.05	0.08	0.16	0.12
51	0.04	0.02	0.05	0.07	0.10	0.16	0.16
52	0.04	0.02	0.06	0.08	0.17	0.21	0.20
53	0.04	0.02	0.07	0.09	0.14	0.22	0.25
54	0.04	0.07	0.12	0.29	0.46	0.71	0.67
55	0.04	0.05	0.08	0.28	0.35	0.61	0.55
56	0.04	0.05	0.09	0.30	0.36	0.59	0.44
57	0.04	0.07	0.12	0.31	0.29	0.56	0.46
58	0.04	0.08	0.13	0.30	0.29	0.54	0.52
59	0.04	0.23	0.51	0.51	0.51	0.62	0.56
60	0.04	0.20	0.37	0.40	0.48	0.56	0.48
61	0.04	0.18	0.30	0.35	0.40	0.57	0.44
62	0.04	0.20	0.31	0.39	0.42	0.57	0.42
63	0.04	0.22	0.31	0.43	0.42	0.68	0.54
64	0.04	0.67	0.70	0.73	0.72	0.79	0.64
65	0.04	0.42	0.52	0.57	0.61	0.74	0.54
66	0.04	0.39	0.50	0.57	0.57	0.74	0.54
67	0.04	0.39	0.45	0.57	0.57	0.74	0.54
68	0.04	0.40	0.45	0.57	0.57	0.74	0.54
69	1.00	0.45	0.45	0.57	0.57	0.74	0.54
70	1.00	1.00	1.00	1.00	1.00	1.00	1.00

FEMALE

Age	Completed Years of Service
	1 to 3	4 to 23	24 to 28	29	30 to 33	34	35+
49	0.05	0.03	0.04	0.06	0.10	0.15	0.12
50	0.05	0.02	0.04	0.08	0.08	0.16	0.13
51	0.05	0.03	0.04	0.08	0.09	0.17	0.14
52	0.05	0.03	0.05	0.08	0.09	0.17	0.14
53	0.05	0.03	0.05	0.10	0.10	0.21	0.17
54	0.05	0.04	0.08	0.14	0.14	0.27	0.19
55	0.05	0.05	0.10	0.12	0.12	0.23	0.18
56	0.05	0.06	0.09	0.12	0.12	0.23	0.18
57	0.05	0.06	0.11	0.12	0.12	0.23	0.18
58	0.05	0.07	0.10	0.14	0.13	0.23	0.16
59	0.05	0.14	0.26	0.35	0.32	0.62	0.42
60	0.05	0.12	0.25	0.32	0.32	0.56	0.32
61	0.05	0.13	0.25	0.32	0.31	0.56	0.34
62	0.05	0.14	0.27	0.32	0.32	0.56	0.31
63	0.05	0.15	0.27	0.32	0.30	0.56	0.34
64	0.05	0.51	0.56	0.56	0.52	0.68	0.49
65	0.05	0.30	0.44	0.46	0.46	0.58	0.46
66	0.05	0.27	0.34	0.34	0.38	0.58	0.39
67	0.05	0.26	0.34	0.34	0.38	0.58	0.39
68	0.05	0.27	0.34	0.34	0.38	0.58	0.39
69	1.00	0.29	0.34	0.34	0.38	0.58	0.39
70	1.00	1.00	1.00	1.00	1.00	1.00	1.00

SCHEDULE 2
(Paragraph 41.82(2)(e))

RATES OF TERMINATION (FOR REASONS OTHER THAN
DISABILITY OR DEATH) PRIOR TO AGE 50
WITH RIGHT TO A PENSION

Completed years of service	Male	Female
1	0.043	0.052
2	0.037	0.046
3	0.031	0.040
4	0.026	0.035
5	0.024	0.031
6	0.021	0.029
7	0.020	0.028
8	0.019	0.026
9	0.018	0.026
10	0.018	0.025
11	0.017	0.024
12	0.016	0.021
13	0.014	0.019
14	0.012	0.017
15	0.010	0.015
16	0.008	0.013
17	0.008	0.012
18	0.008	0.011
19	0.007	0.010
20	0.006	0.009
21	0.005	0.009
22 +	0.005	0.009

RATES OF TERMINATION WITHOUT
RIGHT TO A PENSION

Completed years of service	Male	Female
0	0.049	0.058

SCHEDULE 3
(Paragraphs 41.82(2)(d) and (e))

MODIFICATION OF RETIREMENT RATES AND
TERMINATION RATES

Column 1 Projected Number of Salary level increases after October 1, 2000	Column 2 Completed Years of Service after October 1, 2000
amount	0-2	3-6	7-10	11-14	15 +
none	150.0%	112.5%	103.8%	101.3%	100.0%
one	0.0%	112.5%	103.8%	101.3%	100.0%
two	0.0%	0.0%	103.8%	101.3%	100.0%
three	0.0%	0.0%	0.0%	101.3%	100.0%
four or more	0.0%	0.0%	0.0%	0.0%	100.0%

SCHEDULE 4
(Paragraph 41.82(2)(g))

PROBABILITY DISTRIBUTION OF RANK AT TERMINATION OF EMPLOYMENT

Current Rank	Salary Range as of October 1, 2000	Projected Exit Rank	Completed Years of Service as of October 1, 2000
			0-3	4-7	8-11	12-15
1	$53,148 to 63,776	1	60.5%	60.5%	61.1%	61.1%
		2	13.6%	13.6%	13.7%	13.7%
		3	12.8%	12.8%	13.0%	13.0%
		4	6.2%	6.2%	6.2%	6.2%
		5	3.9%	3.9%	4.0%	4.0%
		6	2.0%	2.0%	2.0%	2.0%
		7	1.1%	1.1%	0.0%	0.0%
		Total	100.0%	100.0%	100.0%	100.0%
2	$63,777 to 74,406	2	34.3%	34.3%	34.3%	35.2%
		3	32.4%	32.4%	32.4%	33.3%
		4	15.6%	15.6%	15.6%	16.0%
		5	9.9%	9.9%	9.9%	10.2%
		6	5.1%	5.1%	5.1%	5.2%
		7	2.7%	2.7%	2.7%	0.0%
		Total	100.0%	100.0%	100.0%	100.0%
3	$74,407 to 85,036	3	49.3%	49.3%	49.3%	49.3%
		4	23.7%	23.7%	23.7%	23.7%
		5	15.1%	15.1%	15.1%	15.1%
		6	7.7%	7.7%	7.7%	7.7%
		7	4.1%	4.1%	4.1%	4.1%
		Total	100.0%	100.0%	100.0%	100.0%
4	$85,037 to 106,295	4	46.8%	46.8%	46.8%	46.8%
		5	29.7%	29.7%	29.7%	29.7%
		6	15.3%	15.3%	15.3%	15.3%
		7	8.2%	8.2%	8.2%	8.2%
		Total	100.0%	100.0%	100.0%	100.0%
5	$106,296 to 127,554	5	55.9%	55.9%	55.9%	55.9%
		6	28.7%	28.7%	28.7%	28.7%
		7	15.3%	15.3%	15.3%	15.3%
		Total	100.0%	100.0%	100.0%	100.0%
6	$127,555 to 180,702	6	65.2%	65.2%	65.2%	65.2%
		7	34.8%	34.8%	34.8%	34.8%
		Total	100.0%	100.0%	100.0%	100.0%
7	$180,703 +	7	100.0%	100.0%	100.0%	100.0%

Current Rank	Salary Range as of October 1, 2000	Projected Exit Rank	Completed Years of Service as of October 1, 2000
			16-19	20-22	23-25	26-28	29+
1	$53,148 to 63,776	1	62.4%	65.0%	69.6%	81.7%	100.0%
		2	14.0%	14.6%	15.6%	18.3%	0.0%
		3	13.2%	13.8%	14.8%	0.0%	0.0%
		4	6.4%	6.6%	0.0%	0.0%	0.0%
		5	4.0%	0.0%	0.0%	0.0%	0.0%
		6	0.0%	0.0%	0.0%	0.0%	0.0%
		7	0.0%	0.0%	0.0%	0.0%	0.0%
		Total	100.0%	100.0%	100.0%	100.0%	100.0%
2	$63,777 to 74,406	2	35.2%	37.2%	41.6%	51.4%	100.0%
		3	33.3%	35.2%	39.4%	48.6%	0.0%
		4	16.0%	16.9%	19.0%	0.0%	0.0%
		5	10.2%	10.7%	0.0%	0.0%	0.0%
		6	5.2%	0.0%	0.0%	0.0%	0.0%
		7	0.0%	0.0%	0.0%	0.0%	0.0%
		Total	100.0%	100.0%	100.0%	100.0%	100.0%
3	$74,407 to 85,036	3	51.5%	51.5%	56.0%	67.5%	100.0%
		4	24.8%	24.8%	26.9%	32.5%	0.0%
		5	15.7%	15.7%	17.1%	0.0%	0.0%
		6	8.1%	8.1%	0.0%	0.0%	0.0%
		7	0.0%	0.0%	0.0%	0.0%	0.0%
		Total	100.0%	100.0%	100.0%	100.0%	100.0%
4	$85,037 to 106,295	4	46.8%	51.0%	51.0%	61.2%	100.0%
		5	29.7%	32.4%	32.4%	38.8%	0.0%
		6	15.3%	16.6%	16.6%	0.0%	0.0%
		7	8.2%	0.0%	0.0%	0.0%	0.0%
		Total	100.0%	100.0%	100.0%	100.0%	100.0%
5	$106,296 to 127,554	5	55.9%	55.9%	66.1%	66.1%	100.0%
		6	28.7%	28.7%	33.9%	33.9%	0.0%
		7	15.3%	15.3%	0.0%	0.0%	0.0%
		Total	100.0%	100.0%	100.0%	100.0%	100.0%
6	$127,555 to 180,702	6	65.2%	65.2%	65.2%	65.2%	100.0%
		7	34.8%	34.8%	34.8%	34.8%	0.0%
		Total	100.0%	100.0%	100.0%	100.0%	100.0%
7	$180,703 +	7	100.0%	100.0%	100.0%	100.0%	100.0%

32. The Regulations are amended by replacing the word "Division" with the word "Part" wherever it occurs in the following provisions:

(a) subsection 14(1);

(b) paragraphs 14(2)(a) and (b);

(c) subsection 15.3(1);

(d) subsection 20(1); and

(e) section 21.

33. The Regulations are amended by replacing the words "Superannuation Account" with the words "Superannuation Account or Public Service Pension Fund" wherever they occur in the following provisions:

(a) paragraph 4(a); and

(b) paragraph 13(3)(c).

COMING INTO FORCE

34. (1) Subject to subsection (2), these Regulations come into force on the day on which they are registered.

(2) Sections 17 and 31 of these Regulations are deemed to have come into force on October 1, 2000.

REGULATORY IMPACT
ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Description

In order to receive special tax treatment, an employer-sponsored pension plan must limit benefits in accordance with the provisions of the Income Tax Act and regulations. The Income Tax Act allows for benefits in excess of these limits to be provided for under a retirement compensation arrangement, but the tax treatment of these arrangements is not as favourable as that extended to pension plans. The Retirement Compensation Arrangements Regulations, No. 1, were introduced in 1994 to provide for the payment of benefits in excess of the Income Tax Act limits. These amendments:

1. ensure that survivor benefits comply with requirements of the Income Tax Act and regulations;
2. make consequential amendments to the regulations to reflect changes to the Public Service Superannuation Act, the Canadian Forces Superannuation Act and the Royal Canadian Mounted Police Superannuation Act that were enacted by the Public Sector Pension Investment Board Act, S.C. 1999, c. 34;
3. provide the terms and conditions for calculating the funds to be transferred to the Supplementary Retirement Arrangement established by the Canada Post Corporation in respect of the actuarial value of the benefits accumulated in the Retirement Compensation Arrangements Account by Canada Post employees who transferred from the Public Service Superannuation Act (PSSA) to the Canada Post pension plans on October 1, 2000; and
4. amend certain provisions to provide for greater clarity.

Alternatives

As the registered pension plans for federal employees are contained in statute, there is no alternative but to amend the regulations.

Benefits and Costs

The impact of these regulatory amendments will be seamless to those individuals affected. The amount of an individual's benefit entitlement remains the same; only the vehicle under which it is provided is altered.

The regulations dealing with the calculation of the actuarial value of benefits to be transferred to the Canada Post Supplementary Retirement Arrangement have no impact on those Canada Post employees now covered under the Corporation's pension plans. Benefits at least equivalent to those that would have been available to those employees under the PSSA and the Retirement Compensation Arrangements Regulations, No. 1 are already provided for under the Corporation's registered pension plan and supplementary retirement arrangement.

Consultation

During the development of these Regulations, there has been consultation with Canada Post Corporation and its consultants, the Office of the Superintendent of Financial Institutions, the Departments of Finance, National Defence, Public Works and Government Services Canada and the Royal Canadian Mounted Police.

These Regulations were pre-published in the Canada Gazette, Part I, on October 13, 2001. No comments were received.

Compliance and Enforcement

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

Contact

Joan M. Arnold
Director
Pension Legislation Development
Pensions Division
Treasury Board Secretariat
Ottawa, Ontario
K1A 0R5
Telephone: (613) 952-3119

Footnote a 

S.C. 1992, c. 46, Sch. I

Footnote 1 

SOR/94-785

Footnote 2 

SOR/97-252

Footnote 3 

SOR/97-252

Footnote 4 

SOR/97-520

Footnote 5 

SOR/97-520

Footnote 6 

SOR/97-520

Footnote 7 

SOR/97-520

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