Vol. 146, No. 14 — July 4, 2012

Registration

SOR/2012-124 June 11, 2012

ROYAL CANADIAN MOUNTED POLICE SUPERANNUATION ACT
FINANCIAL ADMINISTRATION ACT

Regulations Amending the Royal Canadian Mounted Police Superannuation Regulations

T.B. 836561 June 7, 2012

The Treasury Board, on the recommendation of the Minister of Public Safety and Emergency Preparedness, pursuant to sections 26 (see footnote a), 26.1 (see footnote b) and 41 (see footnote c) of the Royal Canadian Mounted Police Superannuation Act (see footnote d) and paragraph 7(2)(d) of the Financial Administration Act (see footnote e), makes the annexed Regulations Amending the Royal Canadian Mounted Police Superannuation Regulations.

REGULATIONS AMENDING THE ROYAL CANADIAN MOUNTED POLICE SUPERANNUATION REGULATIONS

AMENDMENTS

1. (1) The portion of section 2 of the Royal Canadian Mounted Police Superannuation Regulations (see footnote 1) before the first definition is replaced by the following:

2. The following definitions apply in these Regulations.

(2) The definition “Act” in section 2 of the Regulations is replaced by the following:

“Act” means the Royal Canadian Mounted Police Superannuation Act. (Loi)

(3) The definition “Table a(f) Ultimate” et “Table a(f) et a(m) Ultimate” in section 2 of the French version of the Regulations is amended by replacing “signifie les” with “Les”.

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

“authorized advisor” means a member of the Force, a person employed in the public service or a person whose services were retained by the Minister for the purposes of the Act. (conseiller autorisé)

“Commissioner” has the same meaning as in subsection 2(1) of the Royal Canadian Mounted Police Act. (commissaire)

2. Section 3 of the Regulations is renumbered as subsection 3(1) and is amended by adding the following:

(2) For the purposes of paragraphs (b) to (d) of the definition “service in the Force” in subsection 3(1) of the Act, a “police officer” is any person who is considered to be a police officer for the purposes of paragraph (b) of the definition “public safety occupation” in subsection 8500(1) of the Income Tax Regulations.

3. Subsections 5(1) and (2) of the Regulations are repealed.

4. Section 9 of the Regulations and the heading before it are replaced by the following:

ELECTION TO PAY FOR A PERIOD OF SERVICE

ELECTION UNDER PARAGRAPH 6(B) OF THE ACT

Terms of Payment and Default

9. (1) A contributor who opts to pay by instalments for a period of service referred to in paragraph 6(b) of the Act shall pay by monthly instalments.

(2) The instalments shall be payable on the first day of each month after the day on which the contributor elects to pay for the period of service until the earlier of

  • (a) the end of the period that is chosen by the contributor, which must be no later than the later of 20 years and the participant’s 65th birthday, and

  • (b) the contributor’s death.

(3) The instalments shall be payable in equal amounts that shall not be less than $5.00, except the last one, and be calculated using the mortality rates used in the preparation of the actuarial valuation report that was most recently laid before Parliament, in accordance with section 30 of the Act, before the day on which the contributor elects to pay for the period of service 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, and shall bear interest, compounded annually, at a rate equal to the projected rate of return of the Royal Canadian Mounted Police Pension Fund that was used in the preparation of the report.

9.01 (1) A person may, at any time, do one or both of the following:

  • (a) prepay any amount that remains unpaid in respect of an election to pay for a period of service referred to in paragraph 6(b) of the Act;

  • (b) decrease the period of instalments by increasing the amount of the remaining instalments.

(2) A person who makes a partial prepayment may request that the period of instalments remain the same or be decreased.

(3) In all cases, the adjustment of the period of instalments and of the remaining instalments shall be made on the first day of the month after the day on which the request is made, in accordance with subsections 9(2) and (3), except that the actuarial valuation report is the one that was most recently laid before Parliament, in accordance with section 30 of the Act, before the day on which the request is made 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.

9.02 (1) A contributor who does not pay an instalment before or on the day on which it is due is in default of payment.

(2) Notice shall be sent to the contributor as soon as feasible after the default.

(3) However, if the contributor is on leave without pay or if the contributor has ceased to be a member of the Force and is entitled to an annual allowance or a deferred annuity that has not yet become payable, the notice shall be sent to the contributor as soon as feasible after the day on which the contributor returns to work or the payment of the allowance or annuity begins.

9.03 (1) The contributor shall, within 30 days after the day on which the notice of default is sent,

  • (a) pay the arrears, together with interest, in a lump sum; or

  • (b) opt to pay the arrears in monthly instalments over a period that corresponds to the period beginning on the day on which the contributor first defaults on the payment and ending on the day on which the notice is sent.

(2) Arrears that are paid in a lump sum shall bear interest, compounded annually, beginning on the day of the payment default and ending on the day on which the notice of default is sent, at a rate equal to the projected rate of return of the Royal Canadian Mounted Police Pension Fund that was used in the preparation of the actuarial valuation report that was most recently laid before Parliament, in accordance with section 30 of the Act, before the day on which the notice is sent 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.

(3) Arrears that are paid in monthly instalments shall bear interest, compounded annually, beginning on the day of the payment default and ending on the day on which the payment is received by the Commissioner, at a rate equal to the projected rate of return of the Royal Canadian Mounted Police Pension Fund that was used in the preparation of the actuarial valuation report that was most recently laid before Parliament, in accordance with section 30 of the Act, before the day on which the contributor exercises the option 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.

(4) The instalments shall begin on the later of

  • (a) the first day of the month after the end of the period that was chosen under paragraph 9(2)(a), and

  • (b) the first day of the month after the day on which the contributor exercises the option.

9.04 A contributor who does not choose one of the options set out in subsection 9.03(1) within the time limit shall pay the arrears, together with interest calculated in accordance with subsection 9.03(2), in monthly instalments that shall be

  • (a) calculated using the mortality rates used in the preparation of the actuarial valuation report that was most recently laid before Parliament, in accordance with section 30 of the Act, before the day on which the notice of default is sent 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, and shall bear interest, compounded annually, at a rate equal to the projected rate of return of the Royal Canadian Mounted Police Pension Fund that was used in the preparation of the report; and
  • (b) payable on the first day of each month after the day on which the notice is sent, until the earlier of

    • (i) the end of the remainder of the period that was chosen under paragraph 9(2)(a), and

    • (ii) the contributor’s death.

Unpaid Instalments when a Contributor Ceases to be a Member of the Force

9.05 (1) The unpaid instalments referred to in subsection 8(6) of the Act shall be reserved

  • (a) if the contributor is entitled to a lump sum benefit, in a lump sum; or

  • (b) in any other case, in a lump sum or in monthly instalments equal to those that the contributor was paying before having ceased to be a member of the Force, at the contributor’s option.

(2) The reservations shall begin in the month in which the pension benefit begins.

Financial Hardship

9.06 (1) A contributor who establishes that undue financial hardship, which was unforeseen at the time the election was made, will be caused if the contributor is required to continue to pay the instalments may triple the length of the period that was chosen under paragraph 9(2)(a), up to a maximum of 15 years.

(2) The remaining instalments shall be adjusted, in accordance with subsection 9(3), on the first day of the month after the day on which the request is made, except that the actuarial valuation report is the one that was most recently laid before Parliament, in accordance with section 30 of the Act, before the day on which the request is made 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.

Interest Not Payable

9.07 An amount shall not bear interest if

  • (a) despite authorization, it was not reserved for administrative reasons;

  • (b) it is paid within 30 days after the day on which it became payable; or

  • (c) a notice of default has been sent in respect of the amount, together with interest, and it is paid within 30 days after the day on which the notice is sent.

Amount Payable by Reservation on Contributor’s Death

9.08 The unpaid amount referred to in subsection 8(7) of the Act shall be recovered, at the option of the recipient,

  • (a) by reservation of the total amount from the first monthly instalment of the allowance payable;

  • (b) by reservation from the monthly instalments of the allowance of an amount equal to the monthly instalment paid by the contributor, up to a maximum of 30% of the monthly instalment of the allowance; or

  • (c) if the recipient establishes that those terms of recovery will cause financial hardship, by reservation from the monthly instalments of the allowance of an amount not less than 15% of those monthly instalments.

ELECTION UNDER CLAUSE 6(B)(II)(L), (N), (O) OR (P) OF THE ACT

Amount to be Paid

9.09 (1) For the purposes of paragraph 7(1)(i) of the Act, the amount to be paid for a period of service referred to in clause 6(b)(ii)(L), (O) or (P) 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 30 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) For the purposes of subsection (1), “valuation day” means

  • (a) the day on which this subsection comes into force, if the contributor makes the election referred to in clause 6(b)(ii)(L), (O) or (P) of the Act within one year after that day;

  • (b) the day on which the contributor most recently became a contributor, if the contributor most recently became a contributor after the day on which this subsection comes into force and makes the election within one year after the day on which the contributor most recently became a contributor; or

  • (c) the day on which the contributor makes the election, in any other case.

Lump Sum Payment

9.091 A contributor who opts to pay for a period of service referred to in clause 6(b)(ii)(L), (N), (O) or (P) of the Act in a lump sum shall ensure that the amount to be paid, despite paragraph 8(5)(a) of the Act, is received by the Commissioner within 30 days after the day on which the Commissioner sends a notice to the contributor of the amount to be paid.

9.092 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 Royal Canadian Mounted Police Pension Fund that was used in the preparation of the actuarial valuation report that was most recently laid before Parliament, in accordance with section 30 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.

9.093 (1) If the amount to be paid is received by the Commissioner in full within the time limit set out in section 9.091, the period of service in respect of which the election was made shall be counted as pensionable service.

(2) If the amount to be paid is not received by the Commissioner in full within that time limit, the period of service in respect of which the election was made shall be counted as pensionable service, beginning with the part that is most recent in point of time, in the same proportion as the amount that is received by the Commissioner within that time limit bears to the amount to be paid.

(3) If the period of service in respect of which the election was made that is not counted in whole as pensionable service includes periods of full-time service and periods of part-time service, each of those periods shall be counted as pensionable service, beginning with the part that is most recent in point of time, in the same proportion as the amount that is received by the Commissioner bears to the amount to be paid.

9.094 A contributor’s election to pay for a period of service referred to in clause 6(b)(ii)(L), (N), (O) or (P) of the Act is void if the contributor opts to pay in a lump sum and does not pay into the Retirement Compensation Arrangements Account established under the Special Retirement Arrangements Act, within the time limit set out in section 9.091, any amount required to be paid under section 57 or 58 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.

Annual Rate of Pay

9.095 For the purposes of paragraph 10(4)(b) of the Act, the annual rate of pay that the contributor is deemed to have received during a period of service referred to in clause 6(b)(ii)(L), (O) or (P) of the Act is

  • (a) if the contributor was a full-time member on valuation day, within the meaning of subsection 9.09(2), the pay authorized to be paid to the contributor on that day; or

  • (b) if the contributor was then a part-time member, the pay that would have been authorized to be paid to the contributor if the contributor had been a full-time member on that day or, if the contributor was then engaged to work concurrently in more than one position, the total of the amounts determined for each position by the formula

A × B⁄C

where

A is the pay that would have been authorized to be paid to the contributor if the contributor had been a full-time member on that day,

B is the weekly average of the hours of work for which the contributor was engaged, and

C is the total of the weekly averages of the hours of work for which the contributor was engaged in all positions.

Transitional

9.096 Section 9 as it read before the day on which sections 9 to 9.095 came into force shall continue to apply to elections made under paragraph 6(b) of the Act before that day.

5. The portion of subsection 10.7(2) of the Regulations before paragraph (a) is replaced by the following:

(2) A contributor may revoke an election made under subsection 6.1(1) of the Act if the contributor received, from an authorized advisor who normally gives information about these matters, erroneous or misleading information regarding

6. Section 11.1 of the Regulations is amended by adding the following after subsection (3):

(4) Despite clause 6(a)(ii)(C) of the Act, a contributor shall not count as pensionable service any period of service after December 31, 1989 in relation to which an agreement was entered into by the Minister under subsection 24.1(2) of the Act unless a certification referred to in subsection (1) has been issued.

7. Section 11.2 of the Regulations is replaced by the following:

11.2 For the purposes of clause 6(b)(ii)(L) of the Act, the periods of service are those in respect of which pension benefits have accrued under a pension plan registered under the Income Tax Act.

11.3 An election referred to in clause 6(b)(ii)(O) of the Act for a period of service in respect of which there was a payment of a transfer value in accordance with section 22 of the Canadian Forces Superannuation Act or section 13.01 of the Public Service Superannuation Act may be made only if the contributor had not previously had an opportunity to elect for that period of service under either of those Acts.

11.4 A contributor shall make the election referred to in clause 6(b)(ii)(L), (O) or (P) of the Act no later than the day on which the contributor ceases to be a member of the Force.

11.5 Despite subsection 8(1) of the Act, a contributor who is no longer a member of the Force who received, from an authorized advisor who normally gives information about these matters, erroneous or misleading information in respect of any election referred to in clauses 6(b)(ii)(L) to (P) of the Act and who did not make the election while a member, may make the election within one year after the day on which the advisor sent the contributor the corrected information or, if it is later, within one year after the day on which this section comes into force.

11.6 (1) Any part of a period of service referred to in clause 6(b)(ii)(L) 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 the period of service were subject to a division under a pension plan that was subject to the Pension Benefits Standards Act, 1985 or an equivalent provincial Act, 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.

(3) In either case, the total period of service is taken into account in determining eligibility for a benefit.

11.7 (1) If the pension benefits that have accrued in respect of a period of service referred to in clause 6(b)(ii)(O) or (P) 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, after confirmation of the division by the employer, credited to the contributor.

(2) The total period of service is taken into account in determining eligibility for a benefit.

11.8 Paragraph 8(2)(c) of the Act does not apply to the election made under any of clauses 6(b)(ii)(L) to (P) of the Act.

11.9 (1) An election referred to in clause 6(b)(ii)(L), (O) or (P) of the Act shall be made on the Form set out in Schedule IV, and that election need not be witnessed.

(2) The election is made on the day on which the form is signed.

(3) Despite subsection 8(1) of the Act, a contributor who makes the election referred to in clause 6(b)(ii)(L), (O) or (P) within one year after the day on which subsection 9.09(2) comes into force or, if the contributor most recently became a contributor after that day, within one year after the day on which the contributor most recently became a contributor shall send the election to the Commissioner within one month after the day on which the form is signed.

(4) The day on which the election is sent is the day on which it is delivered or, if it is sent by mail, the day on which it is mailed, with the date of the postmark being evidence of that day.

8. The heading before section 13 of the French version of the Regulations is replaced by the following:

ANNULATION D’UN CHOIX

9. (1) Subsections 13(1) and (2) of the Regulations are replaced by the following:

13. (1) A contributor who elected to pay for a period of service under Part Ⅰ of the Act may revoke the election

  • (a) as to payments made and to be made for any period of service, or any part of a period of service, in respect of which the election was made,

    • (i) if the contributor received, from an authorized advisor who normally gives information about these matters, erroneous or misleading information about the amount to be paid or the consequences of the election on the contributor’s benefits and, in making the election, acted on that information, or

    • (ii) if, after having made the election, the contributor became entitled to count the period of service in the calculation of pension benefits other than those provided for under the Act;

  • (b) as to payments to be made for any period of service, or any part of a period of service, in respect of which the election was made,

    • (i) if undue financial hardship that was unforeseen at the time the election was made will be caused if the contributor is required to continue to make the payments,

    • (ii) if, at the commencement date of the contributor’s annuity, the monthly instalments that the contributor pays are greater than the increase, calculated in accordance with section 10 of the Act, in the monthly amount of the benefits payable that results from the election, or

    • (iii) after the contributor has attained 60 years of age, if the monthly instalments that the contributor pays are greater than the increase, calculated in accordance with section 10 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 annuity;

  • (c) as to payments made for any period of service in respect of which the election was made, or those to be made, or both, at the contributor’s option, if that period of service was mentioned by the contributor inadvertently;

  • (d) if the contributor received, from an authorized advisor who normally gives information about these matters, erroneous or misleading information in respect of any election referred to in subparagraph 6(b)(ii) of the Act, failed to make the election and then made the election after having received the corrected information from such an advisor and while a member of the Force; or

  • (e) if the contributor received, from an authorized advisor who normally gives information about these matters, erroneous or misleading information in respect of any election referred to in clauses 6(b)(ii)(L) to (P) of the Act, failed to make the election while a member of the Force and then made the election after having received the corrected information from such an advisor and having ceased to be a member.

(1.1) A contributor who wholly revokes an election in the circumstance set out in paragraph (1)(c) may elect to pay for the period of service for which the contributor intended to pay in the initial election.

(1.2) The contributor shall make the election within six months after the day on which the contributor revoked the initial election, and it is deemed to have been made on the day on which the initial election was made.

(1.3) A contributor who revokes an election in the circumstances set out in paragraph (1)(d) or (e) is deemed to have made the same election on the day after the day on which the contributor received the erroneous or misleading information.

(2) A contributor who revokes an election in the circumstances set out in subparagraph (1)(a)(ii) or paragraph (1)(b) shall pay an amount equal to the mortality charges that relate to the benefits that have accrued as a result of the election before it was revoked, that amount being calculated using the mortality rates used in the preparation of the actuarial valuation report that was most recently laid before Parliament, in accordance with section 30 of the Act, before the day on which the election was revoked 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, and bearing interest, compounded annually, at a rate equal to the projected rate of return of the Royal Canadian Mounted Police Pension Fund that was used in the preparation of the report.

(2) Subsection 13(4) of the Regulations is replaced by the following:

(4) Any amount paid by a contributor who revokes an election is applied in payment of the amount referred to in subsection (2) and the remainder is applied in payment of any part of the period of service that remains credited to the contributor, the amount to be paid being calculated in accordance with the provisions of the Act under which the election was made and the remainder, if any, being refunded to the contributor.

10. The heading before section 14 of the French version of the Regulations is replaced by the following:

RÉVOCATION D’UN CHOIX

11. Sections 14 to 17 of the Regulations are replaced by the following:

14. (1) The circumstances referred to in subsection 9(5) of the Act under which a contributor may revoke an option that the contributor has exercised under paragraph 11(3)(b) or (9)(b) of the Act, or is deemed under subsection 9(4) of the Act to have exercised, and exercise a new option exist if

  • (a) the contributor received erroneous or misleading information from an authorized advisor who normally gives information about the benefits in respect of which a contributor may exercise an option on ceasing to be a member of the Force; and

  • (b) that information was in respect of the amount, nature or type of the benefits in respect of which the contributor could have exercised an option, the procedures required to be followed to constitute a valid exercise of an option or an agreement referred to in subsection 24.1(2) of the Act.

(2) A contributor who has received erroneous or misleading information may, in the circumstances set out in paragraphs (1)(a) and (b), revoke an option that the contributor has exercised under subsection 12(2) of the Act and exercise a new option; a contributor may also, in the same circumstances, revoke an option that the contributor has exercised under subsection 12.1(1) of the Act.

15. An option shall not be revoked under subsection 9(5) of the Act or subsection 14(2) and a new option shall not be exercised unless

  • (a) the contributor exercised or failed to exercise the option on the basis of the erroneous or misleading information referred to in section 14 but would have made a different choice of benefit or would have exercised the option at an earlier time had there been no erroneous or misleading information given;

  • (b) the contributor repays the benefits that resulted from the option and that were paid to the contributor

    • (i) subject to section 17, within 30 days after the day on which the notice that advises the contributor of the amount to be repaid is sent, if the contributor exercised the option under paragraph 11(3)(b) or (9)(b) or subsection 12(2) of the Act or was deemed under subsection 9(4) of the Act to have exercised the option, or

    • (ii) within three months after that day, if the contributor exercised the option under subsection 12.1(1) of the Act;

  • (c) any benefits that resulted from the option and that were paid to the contributor under the Retirement Compensation Arrangements Regulations, No. 1 are repaid by the contributor 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 benefits under paragraph (b);

  • (d) in the case of a contributor who revokes an option for a benefit under subsection 12.1(1) of the Act based on having received erroneous or misleading information in respect of the amount of any benefit under section 11, 12 or 12.1 of the Act, the information about the amount of a benefit to which the contributor was entitled was at least 5% different from the actual amount of that benefit; and

  • (e) the option is revoked and the new option is exercised within

    • (i) in the case of an option exercised under paragraph 11(3)(b) or (9)(b) or subsection 12(2) of the Act or an option that was deemed under subsection 9(4) of the Act to have been exercised, three months after the day on which the contributor became aware that the information that the contributor had received was erroneous or misleading, or

    • (ii) in the case of an option exercised under subsection 12.1(1) of the Act, the later of three months after the day on which the contributor became aware that the information that the contributor had received was erroneous or misleading and six months after the day on which this subparagraph comes into force.

16. (1) The circumstances referred to in subsection 9(5) of the Act under which a contributor who ceased to be a member of the Force and was employed by an eligible employer may revoke an option that the contributor exercised under paragraph 11(3)(b) or (9)(b) of the Act, or is deemed under subsection 9(4) of the Act to have exercised, and exercise a new option exist if

  • (a) the contributor has not yet received a benefit under the Act; and

  • (b) the contributor, on ceasing to be a member of the Force,

    • (i) reasonably expected that an agreement referred to in subsection 24.1(2) of the Act would be entered into and

      • (A) no such agreement had been entered into at the time the contributor applied to revoke the option, or

      • (B) the agreement was entered into after the contributor ceased to be a member of the Force but the contributor’s pensionable service could not be transferred under the agreement, or
    • (ii) took all necessary actions to transfer the contributor’s pensionable service to the eligible employer but, through no fault on the part of the contributor, the transfer could not be validly completed.

(2) A contributor who ceased to be a member of the Force and was employed by an eligible employer may, in the circumstances set out in paragraphs (1)(a) and (b), revoke an option that the contributor has exercised under subsection 12(2) of the Act and exercise a new option; a contributor may also, in the same circumstances, revoke an option that the contributor has exercised under subsection 12.1(1) of the Act.

(3) The contributor shall exercise the new option within three months after the day on which the notice, which advises the contributor that the transfer of the contributor’s pensionable service to the eligible employer was not possible, is sent.

(4) The new option shall be effective on the day on which the contributor exercised, or was deemed to have exercised, the previous option.

17. A contributor who, as a result of the exercise of a new option under subsection 9(5) of the Act or subsection 14(2) or 16(2), is entitled to an annuity, and to whom undue financial hardship that was unforeseen at the time the option was exercised will be caused if the contributor is required to make the repayment referred to in subparagraph 15(b)(i), may make the repayment in approximately equal monthly instalments, by reservation from the annuity, of an amount not less than 10% of the gross monthly amount of the annuity and any supplementary benefit that relates to it.

12. Subsection 20(2) of the Regulations is repealed.

13. The Regulations are amended by adding the following before section 27:

ELECTION UNDER CLAUSE 6(B)(II)(L), (N), (O) OR (P) OF THE ACT

26.1 (1) A contributor who makes an election referred to in clause 6(b)(ii)(L) of the Act shall undergo a medical examination referred to in paragraph 8(2)(b) of the Act only if the contributor makes the election more than one year after the day on which subsection 9.09(2) comes into force or the day on which the contributor most recently became a contributor, if the contributor most recently became a contributor after the day on which that subsection comes into force, and the contributor opts to pay by instalments.

(2) A contributor who makes an election referred to in clause 6(b)(ii)(N) of the Act under clause 6(b)(ii)(J) of the Act shall undergo a medical examination referred to in paragraph 8(2)(b) of the Act only if the contributor opts to pay by instalments.

(3) A contributor who makes an election referred to in clause 6(b)(ii)(O) or (P) of the Act more than one year after the day on which subsection 9.09(2) comes into force or the day on which the contributor most recently became a contributor, if the contributor most recently became a contributor after the day on which that subsection comes into force, and who opts to pay by instalments shall undergo a medical examination.

26.2 (1) A contributor shall undergo the medical examination referred to in paragraph 8(2)(b) of the Act or in subsection 26.1(3) within six months before or after the day on which the election is made.

(2) If, through no fault on the part of the contributor, the contributor is unable to undergo the medical examination before the end of that period, the period shall be extended by six months.

(3) The medical examination shall be performed by any physician who is authorized to practise medicine in the jurisdiction in which the examination is performed.

(4) The contributor shall have passed the medical examination if the physician certifies in writing that the contributor has a life expectancy of at least five years.

(5) A contributor to whom subsection 26.1(1), (2) or (3) applies who does not pass the medical examination shall pay the amount to be paid for the period of service in respect of which the election was made within 30 days after the day on which the notice that advises the contributor of the amount is sent.

(6) If the contributor pays the amount to be paid in full within that time limit, the period of service in respect of which the election was made shall be counted as pensionable service.

(7) If the contributor does not pay the amount to be paid in full within that time limit, the period of service in respect of which the election was made shall be counted as pensionable service, beginning with the part that is most recent in point of time, in the same proportion as the amount paid bears to the amount to be paid.

(8) If the period of service in respect of which the election was made that is not counted in whole as pensionable service includes periods of full-time service and periods of part-time service, each of those periods shall be counted as pensionable service, beginning with the part that is most recent in point of time, in the same proportion as the amount paid bears to the amount to be paid.

DISABILITY

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

15. Section 32 of the Regulations is replaced by the following:

32. The capitalized value of an annuity or annual allowance referred to in Part Ⅰ of the Act shall be calculated using the mortality rates used in the preparation of the actuarial valuation report that was most recently laid before Parliament, in accordance with section 30 of the Act, before the day on which the contributor ceases to be a member of the Force 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 and shall bear interest, compounded annually, at a rate equal to the projected rate of return of the Royal Canadian Mounted Police Pension Fund that was used in the preparation of the report.

16. The portion of subsection 35(1) of the Regulations before paragraph (a) is replaced by the following:

35. (1) Despite section 34, a contributor may make an election after the end of the period set out in that section if the contributor received, from an authorized advisor who normally gives information about these matters,

17. Section 45 of the Regulations is replaced by the following:

45. For the purposes of the determinations referred to in sections 42 and 43, the rates of interest determined in accordance with the section entitled “Pension Commuted Values” of the Standards of Practice — Practice-Specific Standards for Pension Plans, published by the Canadian Institute of Actuaries, as amended from time to time, are the rates for fully indexed pensions.

18. Paragraph 46(1)(a) of the Regulations is replaced by the following:

  • (a) the contributor, before making the election, received, from an authorized advisor who normally gives information about these matters, materially erroneous or misleading information regarding the amount of the reduction of the contributor’s annuity or annual allowance or the amount of the immediate annual allowance to which the spouse would be entitled; or

19. Subsection 53(1) of the Regulations is replaced by the following:

53. (1) For the purposes of paragraphs 11(1)(a), (2)(a), (3)(a), (5)(a), (7)(a) and (8)(a), subsections 11(11), 12.1(1) and 13(3) and section 14 of the Act, the prescribed period is two years.

20. The heading “COMMUTED VALUE” before section 55 of the Regulations is replaced by the following:

TRANSFER VALUE

21. The heading before section 60 of the Regulations is replaced by the following:

VOID OPTION

22. Subsection 60(1) of the Regulations is repealed.

23. Paragraph 63(1)(b) of the Regulations is replaced by the following:

  • (b) the interest rates are the interest rates for fully indexed pensions — adjusted by the interest rates for unindexed pensions to take into account Part Ⅲ of the Act — determined in accordance with the section entitled “Pension Commuted Values” of the Standards of Practice — Practice-Specific Standards for Pension Plans, published by the Canadian Institute of Actuaries, as amended from time to time;

24. Subsection 64(2) of the Regulations is amended by replacing “12.1(2)” with “12.1(3)”.

25. Section 66 of the Regulations is amended by replacing “12.1(1)(b)” with “12.1(2)(b)”.

26. Section 67 of the Regulations is amended by replacing “12.1(1)( c )” with “12.1(2)( c )”.

27. The heading before section 68 of the Regulations is amended by replacing “12.1(1)” with “12.1(2)”.

28. Sections 68 and 69 of the Regulations are amended by replacing “12.1(1)” with “12.1(2)”.

29. The Regulations are amended by adding the following after section 69:

TRANSFER AGREEMENTS

70. For the purposes of subsection 24.1(1) of the Act, a pension plan is a pension plan registered under section 147.1 of the Income Tax Act with at least 10 active participants on the day that the eligible employer enters into an agreement under subsection 24.1(2) of the Act.

71. For the purposes of clause 6(a)(ii)(C) of the Act, an employee may count a period of service as pensionable service to the following extent and subject to the following terms and conditions:

  • (a) any part of a period of service during which the contributor worked part-time is counted in the proportion determined by the formula set out in subsection 11.6(1), and the total period of service is taken into account in determining eligibility for a benefit;

  • (b) any period of service in respect of which the amount referred to in a demand for funds, made to an eligible employer in respect of an employee in accordance with an agreement referred to in subsection 24.1(2) of the Act, has not been paid in total by an employer, is

    • (i) if the period includes only full-time service, counted, beginning with the part that is most recent in point of time, in the same proportion as the amount paid by the employer bears to the amount referred to in the demand for funds, or

    • (ii) if the period includes both full-time service and part-time service, converted to full-time service and costed as a period of full-time service, with the counted part being the most recent in point of time; and
  • (c) if the pension benefits that have accrued in respect of the period of service were subject to a division under a pension plan that was subject to the Pension Benefits Standards Act, 1985 or an equivalent provincial Act, only the part of the period of service that corresponds to the portion of the benefits that remain accrued to the employee is, after confirmation of the division by the eligible employer, counted and the total period of service is taken into account in determining eligibility for a benefit.

72. For the purposes of paragraph 10(4)(b) of the Act, the annual rate of pay that the contributor is deemed to have received during a period of service that is counted as a period of pensionable service under clause 6(a)(ii)(C) of the Act is determined in accordance with section 9.095, except that the valuation day is the one that is set out in the agreement referred to in subsection 24.1(2) of the Act.

30. The Regulations are amended by replacing “December 15, 1994” with “December 14, 1994” in the following provisions:

  • (a) section 17.2, in the description of B in the adapted version of subsection 10(1) of the Act; and

  • (b) section 17.5, in the description of B in subsection (1.1) of the adapted version of section 13 of the Act.

31. The Regulations are amended by replacing “commuted value” with “transfer value” in the following provisions:

  • (a) the definition “valuation day” in section 2;

  • (b) subsections 55(1) to (3);

  • (c) section 56;

  • (d) the portion of subsection 57(1) before paragraph (a), paragraph 57(1)(b) and subsection 57(3);

  • (e) section 58;

  • (f) subsection 59(1);

  • (g) subsection 60(2);

  • (h) the heading before section 61;

  • (i) subsections 61(1) and (2); and

  • (j) sections 68 and 69.

32. The English version of the Regulations is amended by replacing “commuted value” with “transfer value” in the following provisions:

  • (a) subsection 57(2); and

  • (b) subsection 59(2).

33. (1) The portion of Schedule III to the Regulations after the heading “Royal Canadian Mounted Police Superannuation Act” and before the heading “ELECTION TO PAY FOR PRIOR PENSIONABLE SERVICE” is repealed.

(2) Paragraph 2(b) of Part Ⅰ set out under the heading “ELECTION TO PAY FOR PRIOR PENSIONABLE SERVICE” of Schedule III to the Regulations is replaced by the following:

  • (b) in monthly instalments, to be paid beginning the first day of the month after the day on which the election was made, until full payment has been made.

34. The Regulations are amended by adding, after Schedule III, the Schedule IV set out in the schedule to these Regulations.

COMING INTO FORCE

35. These Regulations come into force on September 1, 2012, but if they are registered after that day, they come into force on the day on which they are registered.

SCHEDULE
(Section 34)

SCHEDULE IV
(Subsection 11.9(1))

Election referred to in clause 6(b)(ii)(L), (O) or (P) of the Act

SERVICE BUYBACK FORM

Royal Canadian Mounted Police (RCMP) Pension Plan

Complete this form to purchase the following types of service:

Service with another Canadian pension plan registered under the Income Tax Act (other than federal public sector pension plans).

Service for which you received a transfer value or a commuted value under the Royal Canadian Mounted Police Superannuation Act (RCMPSA), the Canadian Forces Superannuation Act (CFSA) or the Public Service Superannuation Act (PSSA).

RCMP service previously transferred out under a pension transfer agreement that is no longer to your credit under the plan to which it was transferred.

This information is being collected for the purpose of the administration of the RCMPSA. Failure to provide the required information will result in the pension administrator being unable to process this form. Personal information provided on this form is protected under the provisions of the Privacy Act and will be included in Personal Information Banks RCMP PPE 802 and 806.

Contributor’s Personal Information

Surname

Regimental No.

Given Names

Date of Birth (YYYY-MM-DD)

Sex

Preferred Language (√)

English

French

Preferred Telephone No.

Home Address

City

Province

Postal Code

Country

Carefully read the instructions before completing the following part of this form.

I choose to pay for the following service for pension purposes.

Service with another Canadian pension plan registered under the Income Tax Act (other than federal public sector pension plans):

Employer (Name and Address)

From

(YYYY-MM-DD

To

(YYYY-MM-DD)

Service for which I received a transfer value or a commuted value under the Royal Canadian Mounted Police Superannuation Act (RCMPSA), the Canadian Forces Superannuation Act (CFSA) or the Public Service Superannuation Act (PSSA):

Date of Discharge
(YYYY-MM-DD)

From
(YYYY-MM-DD)

To
(YYYY-MM-DD)

RCMP
CF
PS

      

RCMP service previously transferred out under a pension transfer agreement that is no longer to my credit under the plan to which it was transferred :

Date of Discharge

(YYYY-MM-DD)

From

(YYYY-MM-DD)

To

(YYYY-MM-DD)

METHOD OF PAYMENT

Payment may be made in a lump sum or by monthly instalments, or both :

OPTION 1

I elect to pay a lump sum of $ _____________.

Cheque

□

Bank Draft

□

Money Order

□

Cheques, bank drafts and money orders shall be made payable to the Receiver General.

Transfer from a Registered Retirement Savings Plan (RRSP)

□

Transfer from a Registered Pension Plan (RPP)

□

OPTION 2

I elect to pay by monthly instalments of $ _____________.

□

Minimum Monthly Deduction

OR

Monthly Deduction of $_________

□

ACKNOWLEDGEMENT

I have read and fully understand the above and the attached instructions. I understand that in most circumstances an election for prior service is a binding and irrevocable agreement. I understand that the original form must be sent to the address provided in the instructions within one month after the day on which it is signed.

Signature of Contributor

Date (YYYY-MM-DD)

Retain a copy of this form for your records.

Conservez une copie du présent formulaire dans vos dossiers.

REGULATORY IMPACT
ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issue and objectives

These Regulations expand existing election for prior service opportunities for members of the Royal Canadian Mounted Police Pension Plan, make other related changes and technical updates, and support the introduction of pension transfer agreements. The changes modernize the Royal Canadian Mounted Police Pension Plan and introduce pension choices currently available under the federal Public Service Pension Plan and many other Canadian pension plans.

The recognition of prior service with other Canadian pension plans is expected to enhance the ability of the Royal Canadian Mounted Police to attract and retain qualified personnel. Although a pension plan member may choose to leave pension credits under a former plan, the opportunity to include prior service under the current plan may be more beneficial. The member may improve the value of the prior service by having the future pension benefit calculated based on higher earnings, obtain or improve ancillary benefits (e.g. survivor benefits), or qualify for retirement at an earlier age.

Description and rationale

The new election for prior service provisions allow eligible pension plan members to elect for

(1) prior service under other Canadian pension plans (this in addition to existing provisions that allow elections for prior service under federal government plans);

(2) prior service in respect of which a commuted value or transfer value was received under the Royal Canadian Mounted Police Pension Plan, the Canadian Forces Pension Plan, or the Public Service Pension Plan; and

(3) Royal Canadian Mounted Police service previously transferred out under a pension transfer agreement. The election is necessary if the funds are no longer available for transfer back into the Royal Canadian Mounted Police Pension Plan under the agreement. This would occur where the member received a lump sum benefit from the other pension plan.

A new form is introduced in the Regulations for the purpose of making these new types of elections.

The cost of the elections is determined on an actuarial basis. The member is responsible for funding the full cost of the election — either by transfer from a previous pension plan, a registered retirement savings plan, a cash payment, or through monthly instalments deducted from payroll. No additional contributions are required from the Government.

The existing maximum payment period for prior service elections is updated from a lifetime payment period to the later of 20 years from date of election and the plan member’s 65th birthday. The mortality rates used to calculate the life-insured monthly instalment payments are modernized from 1941 Statistics Canada Life Tables rates to those set out in the most recent actuarial valuation report on the Royal Canadian Mounted Police Pension Plan. The interest added to the monthly instalment is updated from 4% to the projected rate of return of the Royal Canadian Mounted Police Pension Fund, as noted in the economic assumptions of that same actuarial valuation report.

Additional circumstances are introduced where a plan member may revoke a prior service election or a pension benefit option to include opportunities currently available to members of the Public Service Pension Plan.

Another amendment changes the name of the lump sum pension benefit “commuted value” to “transfer value” for consistency with the terminology used in the Canadian Forces Superannuation Regulations and the Public Service Superannuation Regulations.

A technical amendment updates the actuarial standard used to determine the interest rates for the calculation of (1) a lump sum transfer value pension benefit; and (2) the reduction applied to a plan member’s annuity when he or she marries after retirement and after the age of 60 and chooses to provide an optional survivor benefit to his or her partner. The existing reference to the 1993 standard is updated to the Standards of Practice — Practice-Specific Standards for Pension Plans, published by the Canadian Institute of Actuaries, as amended from time to time.

In addition to minor housekeeping amendments, such as modernization of language and repeal of an outdated form, these changes address gaps in the existing Regulations by providing criteria and procedures for medical examinations required to be undergone, in certain cases, by plan members who elect for prior service.

The introduction of pension transfer agreements allows the Minister of Public Safety to enter into formal arrangements with other Canadian employers to permit the transfer of pension credits into and out of the Royal Canadian Mounted Police Pension Plan. The Regulations provide that agreements may be entered into with employers that have a registered pension plan with at least 10 active participants. The Regulations also describe the manner in which the prior service is credited under the Royal Canadian Mounted Police Pension Plan.

The recognition of prior service with other Canadian pension plans is expected to enhance the ability of the Royal Canadian Mounted Police to attract and retain qualified personnel. The new pension portability provisions also bring the Royal Canadian Mounted Police Pension Plan into line with the Public Service Pension Plan and other Canadian pension plans. Information received from the Office of the Superintendent of Financial Institutions indicates there is no increase in the actuarial liability of the Royal Canadian Mounted Police Pension Plan, no additional employer costs, and no change in the current service cost as a result of these amendments.

The Royal Canadian Mounted Police Superannuation Act provides that details relating to the pension arrangements for members of the Royal Canadian Mounted Police Pension Plan are set in accordance with the Regulations; therefore, there is no alternative but to amend the Regulations.

Consultation

The Royal Canadian Mounted Police Pension Advisory Committee was consulted and supports the proposed amendments. This committee has a statutory mandate to review matters respecting the administration, design and funding of the Royal Canadian Mounted Police Superannuation Act and to make recommendations to the Minister of Public Safety about those matters. Consultations also took place with the Office of the Superintendent of Financial Institutions, the Department of Justice Canada, the Treasury Board Secretariat, the Department of National Defence, and the Canada Revenue Agency.

Contact

Chantal Pethick
Acting Director General
National Compensation Services
Royal Canadian Mounted Police
Ottawa, Ontario
K1A 0R2
Telephone: 613-843-6045
Email: chantal.pethick@rcmp-grc.gc.ca

Footnote a
S.C. 2009, c. 13, s. 7

Footnote b
S.C. 2009, c. 13, s. 8

Footnote c
S.C. 1999, c. 34, s. 206

Footnote d
R.S., c. R-11

Footnote e
R.S., c. F-11

Footnote 1
C.R.C., c. 1393