(b) the amount of the deferred annuity reduced by the product obtained by multiplying five per cent of the amount of that annuity by the greater of

      (i) 55 minus the contributor's age in years at the time they exercise their option, to the nearest one-tenth of a year, and

      (ii) 30 minus the number of years of pensionable service to their credit, to the nearest one-tenth of a year.

Adjustment

(4) If a contributor who was receiving an annual allowance payable under subsection (1) re-enrols in the regular force, the amount of any annuity or annual allowance to which that contributor may become entitled under this Part on again ceasing to be a member of the regular force shall be adjusted in accordance with the regulations to take into account the amount of the annual allowance they have received.

Alternative annuity for certain members

19. (1) Subject to regulations made under subsection (2), a contributor who ceases to be a member of the regular force, having been a member continuously from the day immediately before the coming into force of this section until the day on which they ceased to be a member, is entitled, at their option, in place of any other benefit under this Part to which they would otherwise be entitled in respect of the pensionable service that they have to their credit, to an annuity, which may be adjusted in accordance with those regulations, payable from the day on which they cease to be a member of the regular force.

Regulations

(2) The Governor in Council may make regulations prescribing the circumstances in which a contributor may exercise an option under subsection (1), the manner of and time for exercising an option and the manner in which the amount of an annuity may be adjusted.

Return of contributions

20. A contributor who ceases to be a member of the regular force and who has to their credit less than two years of pensionable service is entitled to a return of contributions.

Benefit payable in case of disability after retirement

21. (1) A contributor who, not having reached 60 years of age but having become entitled under this Part to a deferred annuity or to an annual allowance, becomes entitled to a disability pension under the Canada Pension Plan or a provincial pension plan, ceases to be entitled to that deferred annuity or annual allowance, as the case may be, and becomes entitled to an immediate annuity.

Adjustment

(2) If a contributor ceases under subsection (1) to be entitled to an annual allowance, the immediate annuity shall be adjusted in accordance with the regulations to take into account the amount of the annual allowance that the contributor has received.

Benefit where entitlement to disability pension ceases

(3) A contributor who, not having reached 60 years of age but having become entitled under subsection (1) to an immediate annuity, has ceased to be entitled to a disability pension under the Canada Pension Plan or a provincial pension plan ceases to be entitled to that immediate annuity and becomes entitled to a deferred annuity or to the annual allowance to which they were originally entitled, as the case may be.

Transfer value

22. (1) Despite any other provision of this Act but subject to the regulations, a contributor who has ceased to be a member of the regular force, has to their credit two or more years of pensionable service and is not entitled to an immediate annuity is entitled, in place of any other benefit under this Act to which they would otherwise be entitled in respect of the pensionable service that they have to their credit, 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 under 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 kind prescribed by the regulations; or

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

Election to pay by instalments

(3) If 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 be determined in accordance with the regulations shall be determined by reference to the portion of the period of pensionable service that the contributor has paid for at the time prescribed in the regulations.

Period to exercise option under former provisions

23. (1) A contributor who ceases to be a member of the regular force before the coming into force of this section and has not exercised their option in favour of a benefit under sections 16 to 22, as those sections read immediately before that coming into force, may, in accordance with the provisions of this Act as it read immediately before that coming into force, exercise that option at any time within one year after the day on which they cease to be a member.

Failure to exercise option

(2) If a contributor fails to exercise an option within the period set out in subsection (1), they are deemed to have exercised it in favour of a deferred annuity.

Becoming a contributor under other Acts

(3) If a contributor becomes a contributor under the Public Service Superannuation Act or the Royal Canadian Mounted Police Superannuation Act without having exercised, or been deemed to have exercised, an option referred to in subsection (1), they are deemed to have exercised it immediately before becoming a contributor under whichever of those Acts is applicable in favour of a deferred annuity.

1989, c. 6, s. 7; 1992, c. 46, s. 42; 1999 c. 34, ss. 133 and 134

15. Sections 25 and 25.1 of the Act are replaced by the following:

Benefits Payable to Survivors, Children and Other Beneficiaries

Benefits payable on death of retired member

25. (1) On the death of a contributor who, at the time of their death, was entitled under this Part to an annuity or an annual allowance , the survivor and children of the contributor are entitled to the following allowances, computed on the basis of the product obtained by multiplying the average annual pay received by the contributor during the period specified in subparagraph 15(1)(a)(ii) by the number of years of pensionable service to the contributor's credit, one one-hundredth of the product so obtained being referred to in this section as the ``basic allowance'':

    (a) in the case of a survivor, an immediate annual allowance equal to the basic allowance; and

    (b) in the case of each child, an immediate annual allowance equal to one-fifth of the basic allowance or, if the contributor died without leaving a survivor, the survivor is dead or the survivor is not entitled to receive an allowance under this Part , other than an immediate annual allowance under section 25.1, two-fifths of the basic allowance.

Total child allowance

(2) The total amount of the allowances paid under paragraph (1) (b) shall not exceed four-fifths of the basic allowance or, if the contributor died without leaving a survivor, the survivor is dead or the survivor is not entitled to receive an allowance under this Part, other than an immediate annual allowance under section 25.1, eight-fifths of the basic allowance.

Apportion-
ment of total among children

(3) If , in computing the allowances to which the children of a contributor are entitled under subsections (1) and (2) , it is determined that there are more than four children of the contributor entitled to an allowance, the total amount of the allowances shall be apportioned among the children in such shares as the Minister considers just and proper under the circumstances.

Benefits payable on death of serving member - more than two years

(4) On the death of a contributor who has to their credit two or more years of pensionable service and was a member of the regular force at the time of death, the survivor and children of the contributor are entitled to the annual allowances to which they would have been entitled under subsections (1), (2) and (3) had the contributor, immediately before death, become entitled under this Part to an annuity or an annual allowance .

Definition of ``child''

(5) For the purposes of subsections (1) to (4) , ``child'' means a child of the contributor who

    (a) is less than eighteen years of age; or

    (b) is eighteen or more years of age but less than twenty-five years of age, and is in full-time attendance at a school or university as defined in the regulations .

Benefits payable on death of serving member - less than two years

(6) On the death of a contributor who has to their credit less than two years of pensionable service and was a member of the regular force at the time of death, the survivor and children of the contributor, in any case where the contributor died leaving a survivor or a child less than eighteen years of age, are entitled jointly to a death benefit equal to the greater of

    (a) a return of contributions, and

    (b) an amount equal to one month's pay for each year of pensionable service to the credit of the contributor, computed on the basis of the rate of pay authorized to be paid to them at the time of their death.

Optional survivor benefit

25.1 (1) If the person to whom a contributor is married or with whom the contributor is cohabiting in a relationship of a conjugal nature, having so cohabited for a period of at least one year, would not be entitled to an immediate annual allowance under any other provision of this Act in the event of the contributor's death, the contributor may opt, in accordance with the regulations, to reduce the amount of the annuity or annual allowance to which the contributor is entitled in order that the person could become entitled to an immediate annual allowance under subsection (2).

Payment

(2) A person referred to in subsection (1) is entitled to an immediate annual allowance in an amount determined in accordance with the option and the regulations if the contributor dies and the option is not revoked or deemed to have been revoked in accordance with the regulations, and the person was married to the contributor at the time of the contributor's death, or was cohabiting with the contributor in a relationship of a conjugal nature for a period of at least one year immediately before the contributor's death.

No entitlement

(3) A person who is entitled to receive an annual allowance under section 29 after the contributor's death is not entitled to an immediate annual allowance under subsection (2) in respect of that contributor.

1999, c. 34, s. 135

16. The heading before section 26 of the Act is repealed.

1999, c. 34, s. 135

17. The portion of section 26 of the Act before paragraph (a) is replaced by the following:

Lump sum payments

26. If in this Part, it is provided that the survivor and children of a contributor are entitled jointly to a death benefit under subsection 25(6) , the total amount of that benefit shall be paid to the survivor of the contributor, except that

1999, c. 34, s. 136

18. Section 28 of the Act is repealed.

1992, c. 46, s. 45; 2000, c. 12, s. 67

19. The heading before section 36 and sections 36 and 37 of the Act are repealed.

20. Section 40 of the Act is replaced by the following:

Minimum benefits

40. (1) If , on the death of a contributor who, on ceasing to be a member of the Canadian Forces, was entitled to an immediate annuity or an annual allowance from which a deduction had been made pursuant to subsection 15(2), there is no person to whom an allowance provided in this Part may be paid, or where the persons to whom such allowance may be paid die or cease to be entitled to it and no other amount may be paid to them under this Part, any amount by which the calculated amount, within the meaning of subsection (2), exceeds the aggregate of all amounts paid to those persons and to the contributor under this Part or Part V of the former Act shall be paid

    (a) as provided in section 38 for amounts payable under that section, if the contributor was not a member of the regular force on or after December 20, 1975; or

    (b) as provided in section 39 for amounts payable under that section, if the contributor was a member of the regular force on or after December 20, 1975.

Definition of ``calculated amount''

(2) For the purposes of subsection (1), ``calculated amount'' means an amount equal to one month's pay for each year of pensionable service to the credit of the contributor, computed on the basis of the rate of pay authorized to be paid to them at the time they cease to be a member of the regular force, minus an amount equal to the amount by which

    (a) the total amount the contributor would have been required to contribute to the Superannuation Account or the Canadian Forces Pension Fund up to the time they cease to be a member of the regular force, other than interest or charges for payments by instalments, in respect of service after 1965, if they had contributed on the basis of the rate set out in subsection 5(1) as it read on December 31, 1965,

exceeds

    (b) the total amount the contributor was required to contribute to the Superannuation Account or the Canadian Forces Pension Fund up to the time they cease to be a member of the regular force, other than interest or charges for payments by instalments, in respect of service after 1965.

1992, c. 46, s. 46; 1999, c. 34, ss. 142 to 144

21. The headings before section 41 and sections 41 to 48 of the Act are replaced by the following:

Re-enrolment or Transfer

Persons re-enrolled or transferred

41. (1) If a person who has become entitled to an annuity or an annual allowance under this Act or a pension under Part V of the former Act by virtue of having served in the regular force is re-enrolled in or transferred to the regular force and becomes a contributor under this Part, whatever right or claim that they may have had to that annuity, annual allowance or pension (in this section referred to as the ``original annuity'') then ceases and the period of service on which the original annuity was based may be counted by them as pensionable service for the purposes of this Part.

Benefits prescribed by regulations

(2) If, on subsequently ceasing to be a member of the regular force, a contributor referred to in subsection (1) is entitled to an annuity or annual allowance under this Part the capitalized value of which is less than the capitalized value of the original annuity, the contributor shall be entitled to benefits prescribed in regulations made under subsection (3) in place of any other benefit under this Part and Part III to which they would otherwise be entitled, but in no case shall the capitalized value of the benefits be less than the capitalized value of the original annuity.

Regulations

(3) For the purposes of subsection (2), the Governor in Council may make regulations prescribing benefits to which a contributor is entitled and respecting the manner of determining capitalized values, including the manner of taking into account any benefit under Part III.

22. Section 49 of the Act is amended by adding the following after subsection (4):

Limitation on application

(5) This section does not apply in the case of a contributor who ceases to be a member of the regular force after the coming into force of this subsection.

1989, c. 6, s. 11; 1992, c. 46, ss. 48(1), (3) and (4) and s. 49; 1999 c. 34, ss. 146 and 147

23. Sections 50 and 50.1 of the Act are replaced by the following:

Regulations

50. (1) The Governor in Council may make regulations

    (a) prescribing anything that, by this Act, is to be prescribed or is to be determined or regulated by regulation;

    (b) prescribing the circumstances in which, and the terms and conditions on which, elections may be made and options may be exercised under this Part, except section 19, and respecting the manner of and time for doing so;

    (c) prescribing the circumstances in which, and the terms and conditions on which, elections under this Part may be revoked or amended, options under this Part revoked, and new elections or options made or exercised, and respecting the manner of and time for doing so;

    (d) prescribing the terms and conditions on which a person who is retired from the regular force and, within sixty days after their retirement from it , again becomes a member of the regular force is deemed to have continued to be a member of the regular force despite their retirement from it ;

    (e) prescribing the extent to which and the circumstances under which any period of service of a person, whether before or after March 1, 1960, for which no pay was authorized to be paid or for which any forfeiture of pay or deduction from pay in respect of a period of suspension from duty was authorized to be made shall be counted as pensionable service for the purposes of this Act, prescribing the pay that is deemed to have been authorized to be paid to that person and to have been received by that person during that period, and prescribing, despite section 5, the contributions to be made by that person to the Superannuation Account or the Canadian Forces Pension Fund in respect of that pay;

    (f) specifying, for the purposes of subsection 2(4), the employment as a member of the Canadian Forces that is excepted employment;

    (g) fixing an annual rate of pay for the purposes of subsection 5(6) or prescribing the manner of determining the annual rate of pay;

    (h) prescribing, for the purposes of subsection 9(3) , the portion of the period of service that shall be counted as pensionable service for the purposes of this Act;

    (i) respecting the manner of determining the amount of a transfer value within the meaning of section 10, the terms and conditions under which a contributor may become entitled to a transfer value and any other matters that the Governor in Council considers necessary for the purposes of carrying out section 22;

    (j) respecting the manner in which, and the determination of the balances on which, interest is to be calculated under section 13 and respecting the rates of interest for the purposes of paragraph 13(b);

    (k) prescribing the evidence required to satisfy the Minister that a contributor is not entitled to a disability pension described in paragraph 15(2)(b), the manner in which and the time within which that evidence shall be provided and the form of that evidence;

    (l) respecting, for the purposes of subsection 15(4), the manner of determining pay that a contributor is deemed to have received;

    (m) prescribing service in the regular force or in the reserve force that constitutes Canadian Forces service for the purposes of paragraph 16(1)(a);

    (n) specifying, for the purposes of subsection 18(4), the method by which the amount of any annuity or annual allowance payable to a contributor described in subsection 18(1) shall be adjusted;

    (o) specifying, for the purposes of subsection 21(2), the method by which the amount of any immediate annuity payable to a contributor described in subsection 21(1) shall be adjusted;

    (p) defining, for the purposes of subsection 25(5) , the expression ``full-time attendance at a school or university'' as applied to a child of a contributor;

    (q) respecting the determination of disability for the purposes of this Part and the conditions on which an immediate annuity shall be paid or continue to be paid, including the initial assessment and subsequent periodic or other assessments of that disability;