1st Session, 36th Parliament,
46 Elizabeth II, 1997

The House of Commons of Canada

BILL C-270

An Act to provide defined contribution pensions for the Public Service, the Canadian Forces and the Royal Canadian Mounted Police, to be managed and invested by a private sector manager, and to amend the Income Tax Act and certain other Acts in consequence thereof

      Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

Short title

1. This Act may be cited as the Federal Public Service Pension Act.

Definitions

2. The definitions in this section apply in this Act.

``contribu-
ting employee''
« contribu-
teur
»

``contributing employee'' means an individual who contributes to a pension account pursuant to section 4.

``federal public service''
« adminis-
tration publique fédérale
»

``federal public service'' means individuals serving in

      (a) the Public Service as defined in the Public Service Superannuation Act;

      (b) the regular force as defined in the Canadian Forces Superannuation Act; or

      (c) the Force as defined in the Royal Canadian Mounted Police Superannuation Act.

``former Act''
« loi antérieure »

``former Act'' means, with respect to one of the three branches of the federal public service mentioned in the definition of that phrase, the Act that applied to the superannuation of employees of the branch immediately before the coming into force of this Act.

``fund manager''
« gestion-
naire de fonds
»

``fund manager'' means a financial manager in the private sector who has been approved by the regulations to manage pension accounts of contributing employees under this Act.

``Minister''
« ministre »

``Minister'' means such member of the Queen's Privy Council for Canada as may be designated by order of the Governor in Council as the Minister for the purposes of this Act.

``pensiona-
ble service''
« emploi ouvrant droit à pension »

``pensionable service'' means employment in the federal public service after December 31, 1998 that is not exempted or excluded from the application of this Act by the regulations.

Application

3. This Act applies to employment in the federal public service after December 31, 1998.

Contributions by employee

4. (1) Every person employed in pensionable service in the federal public service on or after January 1, 1999 shall contribute, by deduction from salary or otherwise as provided by the regulations, the percentage of salary provided by section 5.

Pension account

(2) Every amount contributed by a contributing employee shall be paid into and held in a pension account established for that contributing employee.

Contribution from public funds

(3) Any amount appropriated by an Act of Parliament for the purpose of contributing to pensions under this Act shall be apportioned to the pension accounts of the employees to which this Act applies, in such proportions as is directed by the appropriating Act.

Amount of employee's contribution

5. An employee required or entitled to contribute by subsection 4(1)

    (a) shall contribute to the employee's pension account the percentage of the employee's salary specified as an employee's contribution in the former Act; and

    (b) may, by election in the manner provided in the regulations, contribute to the employee's pension account an additional amount up to the amount mentioned in paragraph (a).

Lump sum and annuity

6. (1) At any time after reaching the age of fifty-five years, or upon becoming permanently disabled, the contributing employee may, by election in the prescribed form, elect to receive as a lump sum the percentage of the value of the account specified in the regulations, in cash or in the securities in which it is held, and to receive an annuity from the balance of the account in one of the forms of annuity prescribed by the regulations.

Family rights

(2) The rights of the spouse and children of a contributing employee respecting the pension account are as provided by the regulations.

Fund management

7. (1) The funds in a pension account mentioned in section 4 shall be managed and invested by a fund manager designated in the prescribed manner by the Designating Committee established pursuant to subsection (2).

Designating Committee

(2) There is hereby established a committee to be known as the Designating Committee consisting of those members appointed by the Minister from persons nominated to represent the parts of the federal public service in accordance with the regulations.

Account held in trust

(3) The fund manager shall hold in trust every pension account assigned to the manager's management and report on the pension accounts to the Designating Committee and to every contributing employee in the manner and at the times specified by the regulations.

Collective management

(4) The fund manager shall manage the investment of the assets of the pension accounts collectively, and not individually, and in such a manner that the investment performance of each account over a specific period of time is the same.

Investment

8. (1) The funds in a pension account may be invested only in the manner and in the securities prescribed in the regulations.

Matters prescribed

(2) Regulations under subsection (1) may, without limiting the generality of subsection (1), prescribe

    (a) the nature of the securities in which the pension accounts may be invested; and

    (b) the proportions of the pension accounts that may be held in different types of security at one time.

Existing benefits

9. Benefits that have become payable under the Public Service Superannuation Act, the Canadian Forces Superannuation Act or the Royal Canadian Mounted Police Superannuation Act prior to January 1, 1999 are not affected by this Act.

Future benefits under former Acts

10. Benefits that become payable on or after January 1, 1999 under the Public Service Superannuation Act, the Canadian Forces Superannuation Act or the Royal Canadian Mounted Police Superannuation Act in respect of pensionable service on or before December 31, 1998 shall be paid in the amounts and at the times provided for in the regulations.

Employee leaving service

11. An employee who leaves the federal public service is entitled to

    (a) receive a benefit,

    (b) transfer the amount standing to the credit of the employee's pension account into a registered retirement pension plan as defined in the Income Tax Act, or

    (c) transfer the amount standing to the credit of the employee's pension account into a registered retirement savings plan as defined in the Income Tax Act

in the manner determined by the regulations.

Regulations

12. The Governor in Council may make regulations

    (a) for any purpose that by this Act is to be provided for by regulation or prescribed; and

    (b) establishing a code of conduct for managers in their handling of funds under this Act.

R.S., c. 1 (5th Supp.)

INCOME TAX ACT

13. The Income Tax Act is amended by adding the following after paragraph 8(1)(m.2):

    (m.3) an amount contributed by the taxpayer in the year, in respect of the employment of the taxpayer, to a pension account under the Federal Public Service Pension Act.

CONSEQUENTIAL AMENDMENTS

R.S., c. P-36

14. The Public Service Superannuation Act is amended by adding the following after section 4:

4.1 This Act does not apply to pensionable employment after December 31, 1998.

R.S., c. C-17

15. The Canadian Forces Superannuation Act is amended by adding the following after section 3:

3.1 This Act does not apply to pensionable service after December 31, 1998.

R.S., c. R-11

16. The Royal Canadian Mounted Police Superannuation Act is amended by adding the following after section 3:

3.1 This Act does not apply to pensionable service after December 31, 1998.

COMING INTO FORCE

Coming into force

17. This Act comes into force on January 1, 1999.