Royal Canadian Mounted Police (Dependants) Pension Fund Increase in Benefits Order: SOR/2024-119

Canada Gazette, Part II, Volume 158, Number 13

Registration
SOR/2024-119 May 31, 2024

ROYAL CANADIAN MOUNTED POLICE PENSION CONTINUATION ACT

P.C. 2024-630 May 31, 2024

Whereas it appears from a report made under section 56 of the Royal Canadian Mounted Police Pension Continuation Act footnote a that the Royal Canadian Mounted Police (Dependants) Pension Fund is substantially in excess of the amount required to make adequate provision for the prospective payments to be made out of it;

Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of Public Safety and Emergency Preparedness, makes the annexed Royal Canadian Mounted Police (Dependants) Pension Fund Increase in Benefits Order under subsection 57(1) of the Royal Canadian Mounted Police Pension Continuation Act footnote a.

Royal Canadian Mounted Police (Dependants) Pension Fund Increase in Benefits Order

1 The following pension benefits, as provided in Part IV of the Royal Canadian Mounted Police Pension Continuation Act, are to be increased in the following manner:

2 This Order comes into force on the day on which it is registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Order.)

Issues

The benefit plan (the Plan), financed through the Royal Canadian Mounted Police (Dependants) Pension Fund (the Fund), is entirely funded by contributions of former members of the Royal Canadian Mounted Police (RCMP), plus interest. As required under the Royal Canadian Mounted Police Pension Continuation Act (the Act), the Office of the Chief Actuary prepares an Actuarial Report of the Plan on a triannual basis.

The latest report, the Actuarial Report on the RCMP (Dependants) Pension Fund (the “Report”), reconciled the assets and liabilities of the Plan as at March 31, 2022. The Report revealed that the Plan is in excess (by $494,000) of the amount required to cover future pension payments. If the surplus were to continue to exist, the last remaining recipient would be entitled to a disproportionate benefit.

In accordance with subsection 57(1) of the Act, when such a surplus exists, benefits to recipients may be increased by Order of the Governor in Council. Doing so would ensure the equitable distribution of the surplus to the remaining eligible widows and prospective survivors, as opposed to the last remaining recipient receiving the entirety of the surplus.

Background

The Plan was established in 1934 and is administered in accordance with Part IV of the Act. The Plan provides a lifetime pension to widows of former non-commissioned officers (e.g. Constables) of the RCMP, hired between 1934 and March 1, 1949. While commissioned officers (e.g. Inspectors) had automatic coverage for a widow’s pension, non-commissioned officers did not. Contributions to purchase such a benefit were optional for every non-commissioned officer on active duty on October 1, 1934, and mandatory for every non-commissioned officer appointed to the RCMP after October 1, 1934. Such contributions averaged approximately $5.30 per month.

Survivor benefits became automatic for non-commissioned officers hired on or after March 1, 1949; consequently, there were no new contributors to the Fund on or after that day. In 1959, the Royal Canadian Mounted Police Superannuation Act came into force. RCMP members hired since then are subject to the pension arrangements, including automatic survivor benefits, provided under this Act. Those hired after March 1, 1949, also became contributors under this Act when it was enacted.

In many cases, the widow’s benefit under the Plan is approximately equal to 1.5% of the member’s final pay multiplied by his years of service, and is payable for life. If the widow dies before receiving payments at least equal to the member’s contributions, then a residual amount, equal to the difference between the member’s contributions and the total benefit received by the widow, is paid to their relatives or estate.

As at March 31, 2022, there were 11 living former RCMP members who made contributions to the Fund. The last member retired in 1987. All of the remaining former members are male with an average age of 97.2 years and all of the survivors are widows. As of March 31, 2022, there were 55 widows with an average age of 92.2 years.

Under section 56 of the Act, a valuation of the assets and liabilities of the Fund must be made at least every five years. In accordance with generally accepted actuarial practices, the valuations are performed every three years. Pursuant to the Act, the Report is prepared at the direction of the Minister of Finance who subsequently tables it in Parliament. The Report was presented to the Minister of Finance on April 3, 2023, and was tabled in Parliament on October 27, 2023.

Objective

The Report demonstrated that the Fund had a surplus of $494,000 and recommended that an annual benefit increase of 5% be applied effective April 1, 2023, followed by annual rate increases of 1.2% on April 1, 2024, and April 1, 2025. The next actuarial report will be prepared as at March 31, 2025, to reassess the Plan’s financial position and adjust the onward benefit increases, as required.

The objective of the Order is to make the recommended benefit increases. The application of the Order is limited to the recipients of benefits under the Fund, which totalled 55 widows and the future prospective widows and/or estates of the 11 members as at March 31, 2022. In the event that a death that has since occurred to a widow or to a member without a surviving spouse, the increased benefit under this Order would go to the estate of the deceased widow or deceased member without a surviving spouse.

Description

This Order provides the following benefit improvements:

Regulatory development

Consultation

Consultation took place with the Office of the Chief Actuary that, in accordance with the requirements of the Act, recommended the distribution of the Fund’s surplus in the form of increased benefits to recipients. This Order is beneficial to the widows it would impact; therefore, no consultation with them has occurred. However, once the Order is in place, the widows will be individually notified of the increase in their benefits via a letter from the Government of Canada Pension Centre.

Prepublication in the Canada Gazette, Part I

This Order was not subject to a prepublication comment period in the Canada Gazette, Part I, because its application is limited to the dependants (all widows) already in receipt of benefits from the Royal Canadian Mounted Police (Dependants) Pension Fund. This Order is beneficial to the widows impacted by it (55 as at March 31, 2022) and does not affect the general public. The Government of Canada Pension Centre will proactively inform the widows of the benefit increase.

Modern treaty obligations and Indigenous engagement and consultation

This Order is not expected to have an impact on Indigenous Peoples nor on Canada’s modern treaty obligations.

Instrument choice

An Order is the only way to increase the benefits to dependants under the Act.

Regulatory analysis

Benefits and costs

As a result of this Order, eligible beneficiaries will see an immediate increase in benefits of 5% effective April 1, 2023, and 1.2% effective April 1, 2024, and April 1, 2025. The Government of Canada will incur some minor costs related to informing affected beneficiaries of the change and calculating what the increase will be for the beneficiaries.

Small business lens

Analysis under the small business lens concluded that this Order would not impact Canadian small businesses.

One-for-one rule

The one-for-one rule does not apply, as there is no impact on businesses.

Regulatory cooperation and alignment

Given that this Order relates to a specific pension plan, there are no regulatory cooperation and alignment opportunities.

Strategic environmental assessment

No environmental impacts are expected as a result of this Order. In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required.

Gender-based analysis plus

This Order will have a beneficial impact on a small number of senior citizens whom are women by increasing their annual pension entitlement income, which averaged $23,014 as at March 31, 2022. No other gender-based analysis plus (GBA+) impacts have been identified.

Implementation, compliance and enforcement, and service standards

The Order comes into force on the day on which it is registered. The Fund consists of all contributions made by members of the plan, plus interest. The source of funds for the benefit increases that will be implemented through this Order is the Fund’s $494,000 surplus. The Government of Canada Pension Centre will send a letter to each widow to inform them of the benefit increase.

Contact

Joanne Rigon
Executive Director
National Compensation Services
RCMP Executive Liaison Officer to Veterans Affairs Canada
Royal Canadian Mounted Police
73 Leikin Drive
Ottawa, Ontario
K1A 0R2
Telephone: 613‑843‑6433
Email: Joanne.Rigon@rcmp-grc.gc.ca