BILL 22

 

An Act to Amend the City of Saint John Pension Act

 

WHEREAS The City of Saint John prays that it be enacted as hereinafter set forth;

 

THEREFORE, Her Majesty, by and with the advice and consent of the Legislative Assembly of New Brunswick, enacts as follows:

 

1                   Subsection 1(1) of the City of Saint John Pension Act, chapter 112 of the Acts of New Brunswick, 1994, is amended by repealing the definition "member" and substituting the following:

 

"member" means an employee who is contributing to the pension fund and includes a person who is not required to contribute under subsection 6(5);

 

2                   Section 5 of the Act is amended by repealing subsection (1) and substituting the following:

 

5(1)              Subject to this section every employee who is employed in full-time employment shall become a member on the day of commencement of full-time employment other than

 

(a)          a person who, on the date of becoming an employee is 63 years of age or over and who could not have purchased or does not agree to purchase sufficient pensionable service, which the person is entitled to purchase under this Act, to have acquired 2 years pensionable service by the time such person attains 65 years of age, and

 

(b)          a contributor under the County Plan who was 50 years of age or over on the date of becoming a contributor to the County Plan.

 

3                   Section 6 of the Act is repealed and the following is substituted:

 

6(1)              A member shall contribute to the pension fund 8.5 per cent of the member's annual salary.

 

6(2)              Commencing May 1, 2007 each member shall contribute to the pension fund 2 per cent of the member's annual salary in addition to the contributions mentioned in subsection (1).

 

6(3)              The contributions mentioned in subsection (2) shall be paid for a period which ends on the earlier of April 30, 2010 and the review date of the first actuarial valuation report for the plan after May 1, 2007 which is filed with the Superintendent of Pensions under the Pension Benefits Act and which shows an actuarial surplus on a going-concern valuation basis.

 

6(4)              Commencing at the end of the period specified in subsection (3) the rate of a member's total annual contributions expressed as a percentage of the member's annual salary shall be one-half of the total annual current service cost stated as a percentage of the aggregate of the annual salaries of the members in the most recent actuarial valuation report for the plan filed with the Superintendent of Pensions, provided that a member's contribution rate shall not be more than 9 per cent of the member's annual salary nor, subject to subsection 7(3), less than 7.5 per cent of the member's annual salary.

 

6(5)              Notwithstanding subsections (1), (2), (3) and (4), the amount of a member's contributions for any calendar year shall not exceed the least of "a", "b" and "c", where:

 

"a" is an amount equal to $1,000.00 plus 70 per cent of the member's pension credit in respect of that calendar year, and

 

"b" is an amount equal to the member's contribution rate for the calendar year as a percentage of annual salary divided by 0.18 and multiplied by the sum of $600.00 plus the pension credit in respect of the calendar year, and

 

"c" is an amount equal to $0.00 if the member's pension credit in respect of that calendar year is $0.00 and at January 1 of the calendar year either the member's pensionable service is greater than or equal to 35 years or the member's pensionable service multiplied by the member's full-time equivalent annualized salary in respect of the calendar year exceeds 64.47 multiplied by the Year's Maximum Pensionable Earnings in respect of the calendar year; otherwise "c" is an amount equal to the contribution rate for the calendar year as a percentage of annual salary times the member's salary in the calendar year.

 

6(6)              The period during which a member has ceased to contribute under subsection (5) shall not count as pensionable service under this Act

 

6(7)              The City is authorized to deduct from the salary paid to a member, an amount equal to the contributions required to be paid by a member under this Act, and to pay such amount into the pension fund within 15 days after the last day of the month in which the contribution was withheld from the member's salary.

 

4                   Section 7 of the Act is repealed and the following is substituted:

 

7(1)              The City shall contribute to the pension fund

 

(a)          an amount equal to the excess of the total current service cost of the pension plan for the year over the aggregate contributions made by the members for that year, and

 

(b)          such additional amounts as are required to amortize any unfunded liability on a going-concern valuation basis or, if the plan is not exempt from the funding of solvency deficiencies, any solvency deficiency on a solvency valuation basis over such period or periods as are permitted by the Pension Benefits Act.

 

7(2)              Prior to the end of the period specified in subsection 6(3) the aggregate of the annual contributions by the City under paragraphs (1)(a) and (b) shall not be less than 7 per cent of the aggregate of the salaries of the members for that year provided that such contributions by the City are eligible contributions under the Income Tax Act.

 

7(3)              After the end of the period specified in subsection 6(3) the aggregate of the annual contributions by the City under paragraphs (1)(a) and (b) shall not be less than 7.5 per cent of the aggregate of the salaries of the members for that year provided that such contributions by the City are eligible contributions under the Income Tax Act, but if the contributions by the City are less than 7.5 per cent of the aggregate of the salaries of the members, then the members' contribution rate as a percentage of annual salary shall be reduced to equal the City's contribution rate as a percentage of the aggregate of the salaries of the members.

 

7(4)              The City shall pay the contributions referred to in this section to the funding agent within the periods prescribed under the Pension Benefits Act.

 

5                   Section 12 of the Act is repealed and the following is substituted:

 

12(1)            A member

 

(a)          who is not eligible to receive a pension under sections 10 or 11,

 

(b)          who has been employed for a continuous period of not less than two years, or has been a member of the pension plan for a continuous period of not less than two years, and

 

(c)           who is within ten years of normal retirement date or is not within ten years of normal retirement date and is retired on the order of the Council,

 

may retire and receive a reduced pension.

 

12(2)            The amount of an annual pension to which a member may become entitled under this section is the pension calculated under subsection 10(2) reduced by 5 per cent for each year of the difference between the member's normal retirement date, or the earliest date at which the member could have retired under section 11 had the member continued to be an employee, and the date of the member's actual retirement.

 

6                   Subsection 15(1) of the Act is repealed and the following is substituted:

 

15(1)            Subject to this Act, a member who has not reached normal retirement date and ceases to be an employee by reason of having become totally and permanently disabled, is entitled to receive an annual disability pension for life calculated in the manner set forth in subsection 10(2).

 

7                   Section 21 of the Act is repealed and the following is substituted:

 

21(1)            Where a person ceases to be totally and permanently disabled under section 20 and is not re-employed by the City, that person shall be a former member whose employment terminated on the date the member became totally and permanently disabled and shall be entitled to benefits under whichever of sections 10, 11, 12, 13 or 28 applies to the former member as of the date he or she ceased to be totally and permanently disabled; and the former member's pensionable service shall be the pensionable service the former member had on the day before he or she became totally and permanently disabled.

 

21(2)            Where a person ceases to be totally and permanently disabled under section 20 by reason of being re-employed by the City, subsection 31(3.2) shall apply to the person.

 

8                   Section 22 of the Act is repealed and the following is substituted:

 

22                 Upon the death of a member who has less than 2 years of continuous employment and has been a member of the pension plan for a continuous period of less than 2 years, the contributions of such member together with credited interest shall be paid to the surviving spouse of the member, or if there is no surviving spouse, to the member's designated beneficiary, or if there is no designated beneficiary, to the member's estate.

 

9                   Section 23 of the Act is amended by

 

(a)           repealing subsection (1) and substituting the following:

 

23(1)            Upon the death of a member who has more than 2 years of continuous employment or has been a member of the pension plan for a continuous period of not less than 2 years, the surviving spouse of that member is entitled to an annual pension equal to 60 per cent of the annual pension that would have been payable to the member had the member been entitled to a normal retirement pension at the time of that member's death.

 

(b)           repealing subsection (2) and substituting the following:

 

23(2)            Upon the death of a former member who was in receipt of any pension under this Act, the surviving spouse of the former member is entitled to an annual pension equal to 60 per cent of the annual pension that was being paid to such former member at death, except that, if the former member elected an adjusted pension under section 13 and if the surviving spouse was the spouse of the member at the time that the former member elected the adjusted pension, then the surviving spouse of the former member is entitled to an annual pension equal to 100 per cent of the annual pension that was being paid to such former member at death.

 

10                 Section 24 is amended

 

(a)           by repealing subsection (3) and substituting the following:

 

24(3)            Where a child's pension is payable under subsections (2), (2.1) or (4), it is to be paid to the person having custody and control of the child, and where there is no such person, it is to be paid to the child or to such other person as the Pension Board directs.

 

(b)           by repealing subsection (4) and substituting the following:

 

24(4)            On the death of a surviving spouse of a member or former member and the cessation of the surviving spouse's pension, or on the death of a member or former member who has no surviving spouse, the Pension Board shall grant to the dependent children of the member or former member in equal shares who were dependent children at the date of death of the member or former member

 

(a)          a pension in an amount equal to the amount of the surviving spouse's pension that was being paid or could have been paid had the spouse survived the member or former member under subsections 23(l) or (3), or

 

(b)          if the former member was in receipt of an adjusted pension under section 13, a pension in an amount equal to 60 per cent of the adjusted pension,

 

for the period beginning on the day of death of the member or former member or the day of death of the surviving spouse, as the case may be, and ending on the day on which the dependent children cease to be dependent as defined in subsection (5), or if there is no such day, the day of death of the dependent children.

 

(c)           by repealing subsection (5) and substituting the following:

 

24(5)            In this Act, "dependant" of a member or former member means a parent, grandparent, brother, sister, child or grandchild of the member or former member who is both dependent on the member or former member for support and

 

(a)          under 19 years of age and will not attain 19 years of age in the calendar year in which the pension to the dependant becomes payable,

 

(b)          in the case of a child who is 19 years or older but under the age of 25, is in full-time attendance at an educational institution, or

 

(c)           dependent on the member or former member by reason of mental or physical infirmity.

 

11                 Subsection 26(2) of the Act is amended by repealing paragraph (a) and substituting the following:

 

(a)          the former member's excess contributions plus 100 per cent of the actuarial equivalent value of that former member's accrued pension on the date of that member's death, or

 

12                 Section 27 of the Act is amended

 

(a)           by repealing subsection (5) and substituting the following:

 

27(5)            The amount of a pension given up by a member as a result of a settlement on marriage breakdown shall be deemed to be included in the pension payable to the member for the purposes of the application of subsection (2).

 

(b)           in subsection (8) by striking out "section 36.1" and substituting "subsection 36(2)".

 

13                 Section 28 of the Act is amended

 

(a)           by repealing subsection (1) and substituting the following:

 

28(1)            A member who has been employed for a continuous period of less than 2 years and has been a member of the plan for a continuous period of less than 2 years and is not otherwise entitled to a pension or pension benefit under this Act or the previous Act, is entitled, upon termination of employment, to a refund of the member's contributions with credited interest to the date of termination.

 

(b)           by repealing subsection (2) and substituting the following:

 

28(2)            A member who has been employed for a continuous period of 2 years or more or has been a member of the plan for a continuous period of not less than 2 years, which period includes employment before the commencement of this Act and the Pension Benefits Act, and is not otherwise entitled to a pension under this Act, is entitled, upon termination of employment, to

 

(a)          a deferred pension payable from normal retirement date calculated in accordance with subsection 10(2), and

 

(b)          a refund of the member's excess contributions, if any.

 

(c)           by repealing subsection (4) and substituting the following:

 

28(4)            If a member is entitled to a deferred pension under subsection (2), the deferred pension in respect of pensionable service after January 1, 1993 shall be increased by 2 per cent for each year, on a compounded basis, from the first day of January of the year following the year in which the member ceased to be employed to the date the pension commences to be paid and the deferred pension in respect of pensionable service between January 1, 1975 and December 31, 1992 shall be increased by 1 per cent for each year, on a compounded basis, from the later of January 1, 1999 and the first day of January of the year following the year in which the member ceased to be employed to the date the pension commences to be paid, but in no case shall the total percentage increase in the accrued pension exceed the total percentage increase in the average wage, as defined in subsection 147.1(1) of the Income Tax Act, during the same period.

 

14                 Section 29 of the Act is amended

 

(a)           by repealing subsection 29(1) and substituting the following:

 

29(1)            A member who is entitled to a deferred pension under subsection 28(2) and is not within 10 years of normal retirement date may, upon written notice given to the Pension Board within 90 days after receipt of the written statement prescribed by subsection 26(1) of the Pension Benefits Act, require the Pension Board to transfer the actuarial equivalent value of the member's pension under subsection 28(2) or (3), subject to the Pension Benefits Act,

 

(a)          to another pension plan with the consent of the administrator of that plan,

 

(b)          to a prescribed retirement savings arrangement, or

 

(c)           for purchase of a deferred life annuity with payments commencing not earlier than 10 years prior to normal retirement date and not later than the end of the year in which the member attains 71 years of age.

 

(b)           by adding after subsection (1) the following:

 

29(1.1)         Upon termination of employment, a member who is entitled to a deferred pension under subsection 28(2), is entitled to withdraw the actuarial equivalent value of the deferred pension from the pension fund if

 

(a)          the member and his or her spouse, if any, are not Canadian citizens,

 

(b)          the member and his or her spouse, if any, are not resident in Canada for the purposes of the Income Tax Act, and

 

(c)           the member's spouse, if any, waives, on a prescribed form, any rights that he or she may have in the pension fund under this Act, the regulations or the pension plan.

 

15                 Section 30 of the Act is amended

 

(a)           by repealing subsection (2) and substituting the following:

 

30(2)            If the adjusted actuarial equivalent value of the accrued pension to which a member or former member is entitled to the date of termination of employment is less than 40 per cent of the Year's Maximum Pensionable Earnings at the date of termination of employment, the Pension Board may pay, in lieu of the pension, the actuarial equivalent value of the pension in a lump sum.

 

(b)           by adding after subsection (2) the following:

 

30(3)            For the purposes of subsection (2) and subject to subsection (4), the adjusted actuarial equivalent value of the accrued pension payable is calculated using the following formula:

 

A = V ´ 1.0665-n

 

where

 

A =

the adjusted actuarial equivalent value of the benefit;

 

 

V =

the actuarial equivalent value of the benefit; and

 

 

n =

the age of the member or former member on December 31 of the year in which his or her employment is terminated or his or her pension plan is wound-up.

 

 

30(4)            For the purposes of subsection (3), "n" shall not be greater than sixty-five.

 

16                 Section 31 is amended

 

(a)           by repealing subsection (3) and substituting the following

 

31(3)            Where a former member who is receiving a pension from the plan subsequently becomes an employee      

 

(a)          payment of the pension to the former member shall be suspended and the former member shall again become a member of the plan no later than the date on which payment of the pension is suspended, and

 

(b)          upon subsequent retirement, the member's pension shall not be less than the pension payable with respect to the member's pensionable service after the most recent date he or she became a member, plus a pension payable with respect to the member's pensionable service before the previous commencement of the member's pension which is no less than

 

(i)       if the member originally retired under subsection 10(2), or sections 11 or 14, the pension that was payable when the pension began to be paid, or,

 

(ii)      if the member originally retired under section 12, the pension that would have been payable when the pension began to be paid if the reduction in the pension had been calculated as if the member was age "a", where "a" equals "b" minus "c" plus "d", and "b" is the member's age at the date of subsequent pension commencement, "c" is the member's age at the date of the pension suspension, and "d" is the member's age at the date of the original pension commencement.

 

(b)           by adding after subsection (3) the following:

 

31(3.1)         For those members who elect an adjusted pension under subsection 13(1), the pensions referred to in subsection (3) are the pensions before the adjustment.

 

31(3.2)         If the former member who rejoined the plan as a member under subsection (3) originally retired under section 15 then, upon subsequent retirement or other termination of employment, the member shall be entitled to benefits under whichever of sections 10, 11, 12, 13, 14 or 28 applies to the member as of the member's date of retirement or termination, based on pensionable service which includes the period during which that person was in receipt of a disability pension.

 

17                 Section 33 is repealed and the following is substituted:

 

33                 The division of the benefits of a member or former member under the plan established by this Act or the previous Act on marriage breakdown shall be in accordance with the Pension Benefits Act, and upon such division, the Pension Board shall revalue the pension or pension benefit of the member or former member.

 

18                 Section 36 of the Act is amended by renumbering section 36 as subsection 36(1).

 

19                 Section 36.1 of the Act is amended

 

(a)          by renumbering section 36.1 as subsection 36(2); and

 

(b)          by adding after subsection (2) the following:

 

36(3)            The percentage increase in the pension of any person under this section shall not exceed the percentage increase in the Consumer Price Index for Canada from the date of retirement of the person to the date of the coming into force of this section.

 

20                 Subsection 37.1(1) is amended

 

(a)           by repealing paragraph (e) and substituting the following:

 

(e)           under subsections 23(1), (2), (3) and (4) on the date of death of the member or former member, as the case may be, and

 

(b)           by repealing paragraph (f) and substituting the following:

 

(f)            under subsections 24(2) and 24(2.1), on the date of death of the member, former member or the surviving spouse of the member or former member, as the case may be.

 

(c)           by repealing paragraph (g).