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Bill C-37

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51-52 ELIZABETH II

CHAPTER 26

An Act to amend the Canadian Forces Superannuation Act and to make consequential amendments to other Acts

[Assented to 7th November, 2003]

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

R.S., c. C-17

CANADIAN FORCES SUPERANNUATION ACT

1. (1) The definitions ``intermediate engagement'', ``retirement age'' and ``short engagement'' in subsection 2(1) of the Canadian Forces Superannuation Act are repealed.

(2) Subsection 2(1) of the Act is amended by adding the following in alphabetical order:

``member of the reserve force''
« membre de la force de réserve »

``member of the reserve force'' means an officer or non-commissioned member of the reserve force;

2. The Act is amended by adding the following after section 3:

APPLICATION TO CERTAIN RESERVE FORCE MEMBERS

Regulations

3.1 (1) The Governor in Council may make regulations respecting the manner in which and the extent to which any provisions of Parts I, II and III, or of any regulations made under those Parts, apply to members or former members, or classes of members or former members, of the reserve force that are prescribed in those regulations and adapting any of those provisions for the purposes of that application.

Reserve force members who were deemed re-enrolled in regular force

(2) For greater certainty, members of the reserve force who, immediately before the coming into force of this section, were deemed to be re-enrolled in the regular force under subsection 41(2) or (3) of this Act as it read immediately before its repeal are members, or classes of members, who may be prescribed by regulations made under subsection (1).

Reserve force members who were participants under Part II

(3) For greater certainty, members of the reserve force who, immediately before the coming into force of this section, were participants within the meaning of paragraph (b) of the definition ``participant'' in subsection 60(1) of this Act as it read immediately before its repeal are members, or classes of members, who may be prescribed by regulations made under subsection (1) for the purposes of the application and adaptation of any provisions of Part II.

1999, c. 34, s. 117(2)

3. The portion of subsection 5(5) of the Act before paragraph (a) is replaced by the following:

Other pensionable service

(5) For the purpose of subsections (2) to (4), ``other pensionable service'' means service, other than service credited under a plan established in accordance with Part I.1, giving rise to a superannuation or pension benefit of a kind specified in the regulations payable

4. (1) The portion of paragraph 6(a) of the French version of the Act before subparagraph (i) is replaced by the following:

    a) le service ne donnant pas lieu à un choix, comprenant :

1992, c. 46, s. 34

(2) Paragraph 6(b) of the Act is replaced by the following:

    (b) elective service comprising

      (i) any period of service for which a contributor has elected to pay under the provisions of this Act as it read immediately before the coming into force of this paragraph,

      (ii) any period of service for which a contributor elects to pay under section 7, and

      (iii) any period of service for which a contributor elects to pay under section 8.

1992, c. 46, ss. 35 to 38; 1999, c. 34, s. 119, ss. 120(1) and (2) and ss. 121 and 122

5. Sections 6.1 to 9 of the Act are replaced by the following:

Elective service

7. (1) A contributor may, subject to regulations made under subsection (2) and paragraphs 50(1)(b) and (c), elect to pay for any period of service, or part of a period of service, of a kind prescribed in the regulations.

Regulations

(2) For the purposes of subsection (1), the Governor in Council may make regulations

    (a) prescribing periods of service of a kind for which a contributor may elect to pay;

    (b) prescribing the terms and conditions on which a contributor may elect to pay for periods of service, including terms and conditions on which a contributor may elect to pay for part only of a period of service and on which a contributor may be required to repay an amount that was paid to the contributor in respect of an annuity, annual allowance, pension or gratuity;

    (c) respecting the manner of determining the amount that a contributor is required to pay for elective service and the terms and conditions of payment for that service, including terms and conditions for payment by instalments and the bases as to mortality and interest on which instalment payments are to be computed; and

    (d) prescribing the circumstances in which an election made by a contributor is void.

Payment to Canadian Forces Pension Fund

(3) Any amount required to be paid by a contributor in respect of any period of service for which they have elected to pay under this Part after the coming into force of this subsection shall be paid into the Canadian Forces Pension Fund.

Payment in respect of previous elections

(4) Any amount that is required to be paid by a contributor after the coming into force of this subsection for a period of service for which they have elected to pay under the provisions of this Act as it read immediately before that coming into force shall be paid, in accordance with those provisions, into the Superannuation Account or the Canadian Forces Pension Fund, as the case may be.

Other elective service

8. (1) A contributor may, within two years after the coming into force of this section, elect, in accordance with subsection (2) or (3), as the case may be, to pay for any period of service that they would have been entitled to count as elective service under section 6 of this Act as it read immediately before that coming into force if they were a member of the regular force continuously from the day immediately before that coming into force until the day on which they make the election.

Old rules applicable

(2) If a contributor makes an election under subsection (1) to pay for a period of service for which they would not have been entitled to make an election under section 7, the provisions of this Act, and the regulations made under it, as they read immediately before the coming into force of this section, apply to an election under that subsection.

New rules applicable and election regarding cost

(3) If a contributor makes an election under subsection (1) to pay for a period of service for which they would also have been entitled to make an election under section 7, then subsection 7(3) and the regulations made under subsection 7(2) apply to the election made under subsection (1), except that the contributor may further elect, in accordance with the regulations, for the provisions of this Act, and the regulations made under it, as they read immediately before the coming into force of this section, to apply to the determination of the amount to be paid for the period of service and the terms and conditions applicable to payment for that service.

Election for absence from duty

9. (1) If, under any regulations made under paragraph 50(1)(e), a contributor is required to count as pensionable service for the purposes of this Act a period of service that exceeds three months, the contributor may, despite those regulations, elect, in accordance with the regulations, not to count as pensionable service that portion of the period that is in excess of three months.

Contributions not required

(2) Despite section 5, a contributor who makes an election under subsection (1) is not required to contribute to the Superannuation Account or the Canadian Forces Pension Fund under that section in respect of the portion of the period to which the election relates.

Election for period of service before December 1, 1995

(3) A contributor who makes an election under subsection (1) in respect of a period of service that ended before December 1, 1995 and who has, before that day, made some but not all of the contributions that are required to be made by the contributor to the Superannuation Account in respect of that period shall, at the time the election is made, cease to be required to make any further contributions to the Superannuation Account in respect of that period and shall count as pensionable service for the purposes of this Act such portion of that period as is prescribed by the regulations.

Amendment or revocation of election

9.1 An election under this Part may be amended by the elector, within the time prescribed by the regulations for the making of the election, by increasing the period or periods of service for which they elect to pay, and is otherwise irrevocable except under such circumstances and on such terms and conditions, including payment by the elector to Her Majesty of such amount in respect of any benefit accruing to the elector during the subsistence of the election, as a consequence of their having so elected, as is prescribed by the regulations.

Entitlement to benefits to cease on election

9.2 Despite anything in the Public Service Superannuation Act or the Royal Canadian Mounted Police Superannuation Act, on the making of any election under this Act to pay for service that they have to their credit under either of those Acts, the contributor so electing, and any person to whom any benefit might otherwise have become payable under the Public Service Superannuation Act or the Royal Canadian Mounted Police Superannuation Act, as the case may be, in respect of that contributor, cease to be entitled to any benefit under that Act in respect of any service of that contributor to which that election relates.

Regulations

9.3 The Governor in Council may make regulations prescribing the manner of determining the amount to be charged to the account maintained in the accounts of Canada, or the pension fund established pursuant to the Public Service Superannuation Act or the Royal Canadian Mounted Police Superannuation Act, as the case may be, and credited to the Canadian Forces Pension Fund or to the Superannuation Account, as the case may be, in respect of a contributor who elects to pay for a period of service that they were entitled to count for pension purposes under the Public Service Superannuation Act or the Royal Canadian Mounted Police Superannuation Act.

6. The heading before section 10 of the Act is replaced by the following:

Benefits: Definitions, etc.

7. (1) The portion of section 10 of the Act before the definition ``annuity'' is replaced by the following:

Definitions

10. In this Act, except Part I.1,

1999, c. 34, s. 123

(2) The definitions ``cash termination allowance'' and ``recipient'' in section 10 of the Act are repealed.

(3) Section 10 of the Act is amended by adding the following in alphabetical order:

``transfer value''
« valeur de transfert »

``transfer value'' means a lump sum amount, representing the value of the contributor's pension benefits, as determined in accordance with the regulations.

8. Subsection 11(1) of the Act is replaced by the following:

Duration of payment, etc., to contributor

11. (1) Where an annuity or an annual allowance becomes payable under this Part to a contributor, it shall, subject to the regulations, be paid in equal monthly instalments in arrears and shall continue, subject to this Part, during the lifetime of the contributor and thereafter until the end of the month during which the contributor dies, and any amount in arrears thereof that remains unpaid at any time after their death shall be paid as provided in section 26, in respect of a death benefit.

9. Section 12 of the Act is replaced by the following:

Revocation of option

12. If a contributor has exercised an option under this Part, the option may be revoked and a new option exercised by the contributor, in accordance with the regulations.

1999, c. 34, s. 125

10. Paragraph 13(b) of the Act is replaced by the following:

    (b) at the rates established in the regulations made under paragraph 50(1)(j) compounded quarterly, for any period beginning on or after January 1, 2001.

1992, c. 46, s. 39; 1999, c. 34, s. 126

11. Section 14 of the Act is repealed.

12. The Act is amended by adding the following before section 15:

Annuities: How Computed

1992, c. 46, s. 40(1)

13. (1) Subparagraph 15(1)(b)(iii) of the Act is replaced by the following:

      (iii) the annual rate of pay that is fixed by the regulations made under paragraph 50(1)(g), or that may be determined in the manner prescribed by those regulations, and in force on the day on which the contributor most recently ceased to be a member of the regular force.

(2) Paragraph 15(2)(b) of the Act is replaced by the following:

    (b) has not become entitled to a disability pension payable under paragraph 44(1)(b) of the Canada Pension Plan or a provision of a provincial pension plan,

1992, c. 46, s. 40(2)

(3) Subsection 15(4) of the Act is replaced by the following:

Pay deemed to have been received during certain periods

(4) For the purposes of this section, a contributor who has to their credit pensionable service that includes any period of service referred to in paragraph 6(b) is deemed to have received during that period pay determined in accordance with the regulations.

1999, c. 34, s. 130(3)

14. The heading before section 16 and sections 16 to 24 of the Act are replaced by the following:

Benefits Payable to Contributors

Immediate annuity

16. (1) A contributor who ceases to be a member of the regular force and who has to their credit two or more years of pensionable service is entitled to an immediate annuity if

    (a) they have completed not less than 25 years of Canadian Forces service as prescribed by regulations made under paragraph 50(1)(m);

    (b) they have reached 60 years of age;

    (c) they have reached 55 years of age and have to their credit not less than 30 years of pensionable service;

    (d) they are disabled and have to their credit not less than 10 years of pensionable service; or

    (e) they cease, otherwise than voluntarily, to be a member of the regular force because of a reduction in the maximum number of officers or non-commissioned members of the regular force authorized by the Governor in Council under section 15 of the National Defence Act or they cease, otherwise than voluntarily, to be a member of the regular force in any circumstances specified by the Treasury Board, and

      (i) they have reached 55 years of age and have to their credit not less than 10 years of pensionable service, or

      (ii) they have to their credit not less than 20 years of pensionable service.

Regulations

(2) Despite paragraph (1)(a), the Governor in Council may make regulations establishing, for officers, according to their rank, a number of years of Canadian Forces service greater than the minimum number of 25 years referred to in that paragraph and providing for that number to be reduced to 25 years over a maximum period of five years from the coming into force of this section, in the case of

    (a) contributors who are members of the regular force on the coming into force of this section; and

    (b) contributors who are entitled to an annuity on the coming into force of this section and who are subsequently re-enrolled in the regular force.

Deferred annuity

17. A contributor who ceases to be a member of the regular force, who has to their credit two or more years of pensionable service and who is not entitled to an immediate annuity, is entitled to a deferred annuity.

Annual allowance

18. (1) A contributor who is entitled to a deferred annuity may opt, in accordance with the regulations, for an annual allowance in place of the deferred annuity. The allowance is payable to the contributor

    (a) immediately, if they are 50 or more years of age when they exercise their option; or

    (b) on their reaching 50 years of age, if they are less than 50 years of age when they exercise their option.

Amount of allowance

(2) The amount of the annual allowance is equal to the amount of the deferred annuity, reduced by the product obtained by multiplying five per cent of the amount of that annuity by the number of years by which the contributor's age in years, to the nearest one-tenth of a year, at the time the allowance is payable is less than 60.

Alternative amount

(3) If a contributor is 50 years or more of age when they cease to be a member of the regular force and has not less than 25 years of pensionable service to their credit, the amount of the annual allowance is the greater of

    (a) the amount calculated under subsection (2), and