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This enactment replaces the present superannuation scheme for the
Public Service, the Canadian Forces and the R.C.M.P. The present
superannuation Acts for these federal public servants provide
prescribed benefit pensions funded by contributions by the employee
to which a future government contribution is committed to ensure the
payment of specified future benefits. This will not apply from January
1, 2001, but existing and accrued benefits under the present Act at that
time are protected.
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The new scheme, commencing January 1, 2001, is one that is funded
by the employee's contributions at the same rate as before, and the
employee may elect to contribute more. To this may be added any
amount appropriated by Parliament. The funds are held in a pension
account for each employee. The accounts will be managed by an
approved private sector fund manager selected by a committee
representing the employees.
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On retirement, the employee may take a prescribed part of the
account as a lump sum and the balance generates an annuity for the
employee.
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Family benefits are to be prescribed by regulations.
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The Income Tax Act is amended to provide that the contributions
made by the employee are deducted from taxable income.
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