Contributors with Less than Two Years of Pensionable Service

28. (1) The portion of subsection 12(1) of the Act before paragraph (a) is replaced by the following:

Contributors with less than two years of pensionable service

12. (1) The following provisions are applicable in respect of any contributor described in subsection (2):

(2) Subsections 12(2) and (3) of the Act are replaced by the following:

Contributor

(2) For the purposes of subsection (1), a contributor described in this subsection is any contributor who

    (a) having been a contributor under Part I of the Superannuation Act immediately prior to January 1, 1954 and having been employed in the Public Service substantially without interruption thereafter, has to the contributor's credit less than two years of pensionable service;

    (b) having to the contributor's credit more than thirty-three years of service on which a superannuation or pension benefit of a kind described in paragraph 5(3)(b) is based, has to the contributor's credit less than two years of pensionable service;

    (c) having had to the contributor's credit more than two years of pensionable service, has, on ceasing to be employed in the Public Service in order to become employed by an approved employer, less than two years of pensionable service remaining to the contributor's credit for which no further contributions are required and that the contributor is unable to count as pensionable service for the purposes of the superannuation or pension fund or plan of that approved employer; or

    (d) having had to the contributor's credit more than two years of pensionable service, has, on ceasing to be employed in the Public Service in order to become a member of the regular force or of the Force, less than two years of pensionable service remaining to the contributor's credit that the contributor is unable to count as pensionable service for the purposes of the Canadian Forces Superannuation Act or the Royal Canadian Mounted Police Superannuation Act.

Other contributors

(3) A contributor, other than a contributor described in subsection (2), who has to the contributor's credit less than two years of pensionable service, is entitled, on ceasing to be employed in the Public Service, to a return of contributions.

(3) Subsection 12(8) of the Act is replaced by the following:

Lump sum payment to surviving spouse and children

(8) Subject to subsection (7), on the death of a contributor who, not having been a contributor under Part I of the Superannuation Act immediately before January 1, 1954, or, having been a contributor thereunder at that time but not having continued to be employed in the Public Service substantially without interruption thereafter, was employed in the Public Service at the time of the contributor's death, having to the contributor's credit less than two years of pensionable service, the surviving spouse and children of the contributor, in any case where the contributor died leaving a surviving spouse or a child less than eighteen years of age, are entitled, jointly, to a death benefit equal to a return of contributions.

(4) This section applies only to persons who cease to be employed in the Public Service, within the meaning of the Public Service Superannuation Act, on or after the coming into force of this section.

29. The heading before section 13 of the Act is replaced by the following:

Contributors with Two or More Years of Pensionable Service

30. (1) The portion of subsection 13(1) of the Act before paragraph (c) is replaced by the following:

Contributors with two or more years of pensionable service

13. (1) The following provisions are applicable in respect of any contributor who has to the contributor's credit two or more years of pensionable service:

    (a) if the contributor ceases to be employed in the Public Service, having reached sixty years of age, for any reason other than misconduct, the contributor is entitled to an immediate annuity;

    (b) if the contributor ceases to be employed in the Public Service, not having reached sixty years of age, by reason of having become disabled, the contributor is entitled to an immediate annuity;

(2) Subparagraph 13(1)(c)(ii) of the Act is amended by adding the word ``or'' at the end of clause (C), by striking out the word ``or'' at the end of clause (D) and by repealing clause (E).

(3) Subsections 13(3) to (5) of the Act are replaced by the following:

Allowance to surviving spouse and children

(3) On the death of a contributor who was employed in the Public Service at the time of the contributor's death, having to the contributor's credit two or more years of pensionable service, the surviving spouse and children of the contributor are entitled to the annual allowances to which they would have been entitled under subsection (2) had the contributor, immediately prior to the contributor's death, become entitled under subsection (1) to an immediate annuity or a deferred annuity or an annual allowance payable immediately or on reaching fifty years of age.

Voluntary retirement of contributor

(4) Notwithstanding anything in this section, a contributor who voluntarily retires from the Public Service, not having been employed therein substantially without interruption for a period of two years immediately before retirement from the Public Service, is entitled only to a return of contributions.

Exceptions

(4.1) Subsection (4) does not apply to a contributor described in paragraph 10(5)(c) or subsection 10(7) or a contributor who has made an election in respect of any period specified in clause 6(1)(b)(iii)(M) or under subsection 39(6) or under any regulations made pursuant to subsection 42(8).

Calculation of period of service

(5) For the purposes of subsection (4), in calculating the period during which a contributor has been employed in the Public Service, there shall be included any period of service of the contributor

    (a) as a member of the regular force or as a member of the Force, or

    (b) with an approved employer with whom the Minister has entered into an agreement pursuant to section 40 or an eligible employer with whom the Minister has entered into an agreement pursuant to section 40.2, that the contributor is, pursuant to the agreement, entitled to count as pensionable service for the purposes of this Part,

that is within a period of two years immediately before the contributor's retirement from the Public Service.

(4) Section 13 of the Act is amended by adding the following after subsection (6):

Transitional

(7) Where a contributor who has to the contributor's credit two or more years of pensionable service, having been a contributor on the day immediately before the coming into force of this subsection and having been a contributor continuously after that day, other than a contributor in respect of whom a payment is made into the Superannuation Account pursuant to an agreement entered into under section 40 or 40.2, ceases to be employed in the Public Service during the period ending two years after the coming into force of this subsection, the contributor is entitled, at the option of the contributor, to

    (a) a return of contributions, unless when the contributor ceases to be employed in the Public Service the contributor has reached forty-five years of age and has to the contributor's credit not less than ten years of pensionable service or is a contributor referred to in paragraph 13(1)(a);

    (b) a cash termination allowance, if the contributor ceases to be employed in the Public Service, not having reached sixty years of age, by reason of having become disabled, unless when the contributor ceases to be employed in the Public Service the contributor has reached forty-five years of age and has to the contributor's credit not less than ten years of pensionable service; or

    (c) any other benefit to which the contributor would otherwise be entitled under this section.

(5) This section applies only to persons who cease to be employed in the Public Service, within the meaning of the Public Service Superannuation Act, on or after the coming into force of this section.

31. The Act is amended by adding the following after section 13:

Transfer value

13.01 (1) Notwithstanding any other provision of this Act, except subsections 40(7) and 40.2(6), but subject to the terms and conditions set out in the regulations, a contributor who has ceased to be employed in the Public Service and is not entitled to an immediate annuity and has to the contributor's credit two or more years of pensionable service is entitled, in the place of any other benefit under this Act to which the contributor would otherwise be entitled in respect of that period of pensionable service, to a transfer value that is payable to the contributor in accordance with subsection (2).

Where transferred

(2) The payment of a transfer value to which a contributor may be entitled pursuant to subsection (1) is effected by transferring it to, at the direction of the contributor,

    (a) a pension plan selected by the contributor that is registered under the Income Tax Act, if that pension plan so permits;

    (b) a retirement savings plan or fund for the contributor that is of the prescribed kind; or

    (c) a financial institution authorized to sell immediate or deferred life annuities of the prescribed kind, for the purchase from that financial institution of such an annuity for the contributor.

Election to pay by instalments

(3) Where a contributor who is entitled to a transfer value has elected to pay for a period of pensionable service by means of instalments, the transfer value to which that contributor may become entitled under subsection (1) shall be determined in accordance with the regulations and by reference to the portion of the period of pensionable service that the contributor has paid for at the time the transfer value becomes payable.

Return of contributions where previous transfer value

13.02 Where a contributor is entitled to a return of contributions in respect of a period of service described in clause 6(1)(b)(iii)(M) for which the contributor has made an election, the return of contributions in respect of that service shall be paid in accordance with subsection 13.01(2).

Return of contributions where payment by previous employer

13.03 (1) Where a contributor is entitled to a return of contributions and the pensionable service to the contributor's credit includes a period in respect of which

    (a) a payment has been made into the Superannuation Account pursuant to an agreement entered into under section 40 or 40.2, and

    (b) at the time the payment was made, the Pension Benefits Standards Act, 1985 or a provincial law within the meaning of subsection 40(10) required the locking-in of contributions,

the return of contributions in respect of that period shall be paid in accordance with subsection 13.01(2).

Deemed inclusion

(2) For the purposes of this section, paragraph (c) of the definition ``return of contributions'' in subsection 10(1) is deemed to include a reference to the total payment made pursuant to an agreement entered into under section 40 or 40.2.

1992, c. 46, s. 19(2)

32. Subsections 40(6) and (7) of the Act are replaced by the following:

Non-
applicability of subsection 10(10)

(6) Subsection 10(10) does not apply in respect of a payment made pursuant to subsection (3) or (4).

No benefit payable in respect of transferred contributions

(7) Subject to any regulations made under paragraph 42.1(1)(u), where, pursuant to subsection (3) or paragraph (4)(a), the Minister makes a payment to an approved employer in respect of an employee, that employee ceases to be entitled to any benefit under this Part or Part III in respect of the period of pensionable service to which that payment relates.

1992, c. 46, s. 20

33. Section 40.1 of the Act is replaced by the following:

Divestiture of service

40.1 (1) Where Her Majesty in right of Canada transfers or otherwise divests Herself of the administration of a service to any person or body, this Act and the regulations made under this Act apply, in the manner and to the extent provided in any regulations made under paragraph 42.1(1)(u), to any contributor who, as a result of that transfer or divestiture, ceases to be employed in the Public Service and who, on or after that transfer or divestiture, becomes employed by the person or body to whom the service is transferred or divested.

Transitional coverage

(2) Notwithstanding the definition ``Public Service'' in subsection 3(1), the Treasury Board may, subject to such terms and conditions as may be prescribed by the regulations made under paragraph 42.1(1)(v.5), including the requirement of the person or body referred to in subsection (1) to pay into the Superannuation Account the amount determined in accordance with those regulations,

    (a) direct that the person or body forms part of the Public Service during such period, not exceeding the period prescribed by the regulations, as is determined by the Treasury Board; and

    (b) determine those classes of persons employed by the person or body who are not required to contribute under section 5.

Transfer Agreements

Definition of ``eligible employer''

40.2 (1) In this section, ``eligible employer'' means an employer for the benefit of whose employees there is a pension plan or retirement savings plan of a class prescribed by regulations made under paragraph 42.1(1)(v.6), and includes the administrator of any such pension plan or retirement savings plan.

Authority to enter into agreement

(2) The Minister may, on terms approved by the Treasury Board, enter into an agreement with any eligible employer that

    (a) requires the Minister to pay to that employer, for the purpose of any plan referred to in subsection (1), an amount determined in accordance with subsection (3) in respect of any contributor who has ceased or ceases to be employed in the Public Service and is or becomes employed by that employer; and

    (b) may provide that any eligible employer pay into the Superannuation Account an amount determined in accordance with the agreement in respect of any person who has ceased or ceases to be employed by that employer and is or becomes employed in the Public Service.

Authority to transfer contributions

(3) Where a contributor ceases to be employed in the Public Service and is or becomes employed by any eligible employer with whom the Minister has entered into an agreement pursuant to subsection (2), the Minister may, subject to such terms and conditions as the agreement provides and if the agreement so provides, pay to that employer out of the Superannuation Account

    (a) amounts equal in the aggregate to

      (i) an amount not exceeding the value, actuarially calculated in accordance with the agreement, of all benefits accrued under this Part and Part III in respect of the pensionable service of the contributor, and

      (ii) such amount representing interest on the amount determined in accordance with subparagraph (i) as of the date of payment to the eligible employer as the Minister determines; or

    (b) the benefits payable under this Part and Part III to or in respect of the contributor, as they become payable.

Consent of contributor

(4) No payment shall be made pursuant to subsection (3) except with the consent in writing of the contributor.

Non-
applicability of subsection 10(10)

(5) Subsection 10(10) does not apply in respect of a payment made pursuant to subsection (3).

No benefit payable in respect of transferred contributions

(6) Subject to any regulations made under paragraph 42.1(1)(u), where, pursuant to paragraph (3)(a), the Minister makes a payment to an eligible employer in respect of an employee, that employee ceases to be entitled to any benefit under this Part or Part III in respect of the period of pensionable service to which that payment relates.

Payment of difference to employee who was vested

(7) Subject to subsection (8), where the amount paid by the Minister to an eligible employer pursuant to subsection (3) in respect of an employee is less than the transfer value that would be calculated in respect of that employee in accordance with section 13.01, whether or not the employee would otherwise be entitled to the transfer value, the Minister shall pay an amount equal to the amount of the difference to the employee in accordance with subsection 13.01(2).

Payment of difference to employee who was not vested

(8) Where the amount paid by the Minister to an eligible employer pursuant to subsection (3) in respect of an employee is less than the return of contributions to which that employee would otherwise be entitled under section 12 or 13, the Minister shall pay to the employee an amount equal to the amount of the difference.

Service countable by employee entering Public Service

(9) Where an employee of any eligible employer with whom the Minister has entered into an agreement pursuant to subsection (2) has ceased to be employed by that employer and is or becomes employed in the Public Service, any service of that employee that, at the time of leaving that employment, the employee was entitled to count for the purpose of any plan referred to in subsection (1) established for the benefit of employees of that employer may, if the agreement so provides, be counted by the employee as pensionable service for the purposes of subsection 6(1), to the extent and subject to the terms and conditions provided in the regulations, if the employer pays into the Superannuation Account such amount as is required under the agreement to be so paid by that employer in respect of the employee.

Transitional

40.3 (1) No agreement may be entered into under subsection 40(2) on or after the day on which this subsection comes into force.

Deemed termination of certain agreements

(2) Any agreement entered into under subsection 40(2) before the day on which subsection (1) comes into force, other than an agreement prescribed by the regulations made under subsection (3), that has not been terminated within the three year period after that day is deemed to be terminated on the expiration of that period.

Regulations

(3) The Governor in Council may make regulations prescribing the agreements made under subsection 40(2) that are to be excluded from the application of subsection (2).

1992, c. 46, s. 21(8)

34. Subsections 42(3) and (4) of the Act are replaced by the following:

Additions to Schedule I

(3) The Governor in Council may, by order, amend Schedule I by adding to Part I, III or IV thereof any board, commission or corporation or portion thereof that is or was an agent or servant of Her Majesty in right of Canada.

Deletions from Schedule I

(4) The Governor in Council may, by order, amend Schedule I by deleting therefrom any board, commission or corporation or portion thereof.