SUMMARY

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.

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.

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.

Family benefits are to be prescribed by regulations.

The Income Tax Act is amended to provide that the contributions made by the employee are deducted from taxable income.