BILL 65

An Act to Amend the Pension Plan for Employees of the City of Moncton Act

WHEREAS the City of Moncton Employees' Pension Board 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 The Pension Plan for Employees of the City of Moncton Act, chapter 51 of the Acts of New Brunswick, 1998, is amended by adding after section 3 the following:

3.1 Effective August 26, 2002, current employees of the Codiac Transit Commission ("Codiac Transit") shall become members of the Plan, subject to the terms of the Plan and any applicable agreements, as amended from time to time. Employees of Codiac Transit whose employment commences after August 26, 2002 shall be eligible to join the Plan in accordance with Part III herein.

2 The Act is amended by repealing subsection 9(1) and substituting the following:

9(1) Effective December 31, 1991 to December 31, 2006, the City shall pay annually to the Board for the trust fund the following:

(a) $25,000; and

(b) 6.65% of the earnings of each member, provided that the amount contributed in accordance with this paragraph shall not exceed for any one member an amount equal to 6.65% of the defined benefit limit for the Plan year, as defined in the Income Tax Act, divided by 2.0%.

9(1.1) Effective January 1, 2007, the City shall pay annually to the Board for the trust fund 7.25% of the earnings of each member, provided that the amount contributed in accordance with this paragraph shall not exceed for any one member an amount equal to 7.25% of the defined benefit limit for the Plan year, as defined in the Income Tax Act, divided by 2.0%.

3 The Act is amended by repealing subsection 9(2) and substituting the following:

9(2) The contributions made by the City to the trust fund, in accordance with subsections 9(1) and 9(1.1) and, in any Plan year shall not exceed the maximum amount that is permitted under the Income Tax Act for that Plan year.

4 The Act is amended by repealing subsection 9(3) and substituting the following:

9(3) Notwithstanding subsection 9(1), contributions made by the City in excess of the limit found in subsection 9(1) for the period since January 1, 1992 including credited interest shall be subtracted from the amount payable by the City under subsection 9(1) for the Plan year 2004.

5 The Act is amended by repealing subsection 10(3) and substituting the following:

10(3) Notwithstanding subsection 10(1) but subject to the limits on maximum member contributions under the Income Tax Act in each Plan year, effective January 1, 1992, the maximum a member may contribute in any Plan year shall be equal to 7.25% of the defined benefit limit for the Plan year, as defined in the Income Tax Act, divided by 2.0%.

6 The Act is amended by adding after subsection 10(4) the following:

10(5) Should the City receive an exemption under the Pension Benefits Act from the requirement to provide at least the minimum funding of any solvency deficiency that may exist, such exemption shall also apply to the members of the Plan, for as long as such exemption remains in effect for the City.

7 The Act is amended by repealing subsection 11(1) and substituting the following:

11(1) If, on the advice of the Actuary, the contributions described in subsections 9(1), 9(1.1) and 10(1) are not sufficient to provide the minimum funding, as required by the Pension Benefits Act, of the benefits accruing in the Plan year and any unfunded actuarial liability or solvency deficiency that may exist, then the City's and the members' required contributions shall be increased in equal amounts (as expressed as a percentage of member earnings) so that the contributions are sufficient to provide the minimum funding required.

8 The Act is amended by repealing subsection 12(1) and substituting the following:

12(1) If,

(a) on the advice of the Actuary, and taking into account any funding excess that may exist, the contributions described in subsections 9(1), 9(1.1) and 10(1) are more than sufficient to fund the benefits accruing in the Plan year and provide at least the minimum funding, as required by the Pension Benefits Act, of any unfunded actuarial liability or solvency deficiency that may exist, or

(b) the contributions described in subsections 9(1), 9(1.1) and 10(1) would not be eligible contributions under the Income Tax Act,

then the Board may make improvements to the benefits provided to members, in a manner permitted by the Pension Benefits Act and within any limits prescribed by the Income Tax Act.

9 The Act is amended by repealing section 16 and substituting the following:

16 If the continuous service of a member who has attained age 55 and has either completed five years of continuous service or two years of continuous Plan membership, or who has completed ten years of continuous service and is between age 50 and 55, terminates before his normal retirement date,

(a) the member shall be considered to have retired early for the purposes of the Plan on his early retirement date which is the day on which the member's continuous service terminates; and

(b) the member shall be entitled to receive an early retirement pension.

10 The Act is amended by repealing section 20 and substituting the following:

20 A member who retires early pursuant to section 16 may elect to receive either:

(a) a pension, commencing on his early retirement date, or any other date thereafter but prior to his normal retirement date. The member's annual pension shall be equal to:

(i) 2% times the years of pensionable service times the member's final average earnings,

reduced by

(ii) 3.5% for each year by which the pension commencement date precedes the member's age 60, provided that

(iii) the member's pension is at least the actuarial equivalent of the deferred pension under paragraph 20(b); or

(b) a deferred pension, commencing on his normal retirement date, calculated according to the formula in sub-paragraph 20(a)(i) based on his pensionable service to his early retirement date.

11 The Act is amended by repealing Part VIII and substituting the following:

PART VIII

TERMINATION BENEFITS

Vesting and Termination Benefits

33(1) A member is vested in his accrued pension if he has completed five years of continuous service or two years of continuous Plan membership.

33(2) A member who terminates continuous service, for any reason other than death, disability as described in Part IX, or retirement as described in Part V, before he is vested in his accrued pension, as described in subsection 33(1), shall receive a lump sum refund of the member's required contributions made to the Plan plus credited interest.

33(3) A member who terminates continuous service, for any reason other than death, disability as described in Part IX, or retirement as described in Part V, after he is vested in his accrued pension, as described in subsection 33(1), is not permitted to receive the lump sum refund of the member's required contributions made under the Plan. In lieu thereof, the member is entitled to receive a deferred pension, commencing at the member's normal retirement date, in the amount accrued or granted to him under section 19.

Minimum Benefits on Termination

34(1) If a member is entitled to a deferred pension under subsection 33(3) and the member's required contributions made before December 31, 1991 plus credited interest to the date of termination of continuous service exceeds the commuted value of the deferred pension described in subsection 33(3) in respect of pensionable service before December 31, 1991, the deferred pension shall be increased by the amount necessary to eliminate any such excess.

34(2) If a member is entitled to a deferred pension under subsection 33(3) and the member's required contributions made on or after December 31, 1991 plus credited interest to the date of termination of continuous service exceeds 50% of the commuted value of the deferred pension described in subsection 33(3) in respect of pensionable service on or after December 31, 1991 or otherwise accrued or granted on and after December 31, 1991, the member is entitled to a refund of the excess.

Early Commencement of Deferred Pension

35(1) A member who terminates employment with the City on or after December 31, 1991 before attaining age 55 and who is entitled to receive a deferred pension under Part VIII may elect to commence receiving this pension on the first day of any month on or following the attainment of age 55 and prior to his normal retirement date. The amount of this pension shall be the actuarial equivalent of the deferred pension otherwise commencing on his normal retirement date.

35(2) Notwithstanding 35(1), in no event shall the amount of such pension be greater than the limits imposed by the Income Tax Act.

Transfer of Value of Deferred Pension

36(1) Subject to subsections 36(2), 36(3) and 75(4), a member who terminates continuous service, for any reason other than death, disability, or retirement, on and after December 31, 1991 and before attaining age 55 may elect to have the commuted value of the deferred pension to which the member is entitled under Part VIII, with credited interest:

(a) transferred to another pension plan registered in New Brunswick or a jurisdiction designated under the Pension Benefits Act to which the former member's current employer is making contributions on the former member's behalf, if that plan so permits;

(b) transferred to a locked-in retirement account or life income fund as prescribed in the Pension Benefits Act; or

(c) applied to purchase a deferred life annuity from an insurance company licensed to transact business in Canada provided payment of the annuity will not commence before the earliest date on which the member was entitled to retire under the Plan.

Upon such a transfer or purchase, the member will cease to be a member and will have no further entitlement under the Plan.

36(2) The Board shall not permit a transfer or purchase under subsection 36(1) unless the Board is satisfied that:

(a) the transfer or purchase is in accordance with the Pension Benefits Act; and

(b) any restrictions in the Pension Benefits Act with regard to the solvency of the Plan have been met.

36(3) Amounts transferred in accordance with subsection 36(1) on and after January 1, 1989 shall not exceed the maximum amount prescribed under the Income Tax Act, and the excess of the commuted value, plus credited interest, if any, over the amount transferred shall, at the discretion of the Board, be paid to the member or remain to the member's credit in the Plan as permitted under the Income Tax Act and the Pension Benefits Act.

36(4) A member who is entitled to a refund under either subsection 33(2) or subsection 34(2) may elect to transfer the refunded amount to a registered retirement savings plan or registered retirement income fund, both as defined by the Income Tax Act, and subject to eligibility of such transfer under the Income Tax Act.

12 The Act is amended by repealing section 42 and substituting the following:

42(1) If a member dies while in service but before the member is entitled to an immediate pension as described in Part V and the member is not vested in his accrued pension, as described in subsection 33(1), the member's spouse, or if no spouse, the member's beneficiary shall receive a refund of the member's contributions made to the Plan plus credited interest.

42(2) If a member dies while in service but before the member is entitled to an immediate pension as described in Part V and the member is vested in his accrued pension, as described in subsection 33(1), the member's spouse, or if no spouse, the member's beneficiary shall receive a refund of the commuted value of the deferred pension to which the member would have been entitled to under Part VIII had the member terminated employment.

13 The Act is amended by repealing section 43 and substituting the following:

43 The death benefit for a member who dies while in service and after entitlement for immediate pension as described in Part V is:

(a) for a member who does not have a spouse on the member's date of death, the commuted value of the pension the member would have been entitled to if the member had retired immediately prior to his date of death;

(b) for a member who has a spouse on the member's date of death, a spousal pension equal to 60% of the pension the member would have been entitled to if the member had retired immediately prior to dying. This spousal pension shall be paid for the lifetime of the spouse in the form described in section 29.

43.1 If the commuted value described in paragraph 43(a) exceeds the commuted value of the spousal pension described in paragraph 43(b), the excess shall be refunded to the spouse, or at the spouse's direction, transferred to a registered retirement savings plan or registered retirement income fund, both as defined by the Income Tax Act and subject to eligibility of such transfer under the Income Tax Act, provided however that in lieu of the above spousal pension and refund, the spouse may elect to receive a refund of the full commuted value described in paragraph 43(a), or at the spouse's direction, a transfer of such commuted value to a registered retirement savings plan or registered retirement income fund, both as defined by the Income Tax Act and subject to eligibility of such transfer under the Income Tax Act.

14 The Act is amended by repealing section 45 and substituting the following:

45 In addition to any other death benefit payable under Part X for a member who dies while in service, the member's spouse, or if no spouse, the member's beneficiary, is entitled to receive a refund of any excess contributions made under the Plan determined under subsection 24(2) or 34(2) as if the member had retired or terminated employment, as the case may be.

15 The Act is amended by repealing section 75 and substituting the following:

75(1) A pension or deferred pension payable under this Plan shall not be capable of being commuted, except as permitted in accordance with the Pension Benefits Act in the event that the life expectancy of the member is considerably shortened by reason of his mental or physical disability and in the case where the member has a spouse, the prescribed spousal waiver is completed provided that any commutation permitted hereunder shall comply with all requirements of the Pension Benefits Act.

75(2) Notwithstanding subsection 75(1), if a member terminates or retires on or after December 1, 2004 and the commuted value of any pension or deferred pension payable under the Plan when adjusted as required under the Pension Benefits Act would be less than 40% of the YMPE in the year the member terminates employment or retires, or such greater amount as may be permitted under the Pension Benefits Act, the administrator may pay an amount equal to the commuted value of the member's pension or deferred pension in full discharge of all obligations under the Plan, provided the member and the member's spouse, if any, complete the prescribed waiver under the Pension Benefits Act. In lieu of a lump sum payment, at the member's discretion, the commuted value may be transferred to a registered retirement savings plan or registered retirement income fund, both as defined in the Income Tax Act, and subject to the eligibility of such transfer under the Income Tax Act.

75(3) Notwithstanding subsection 75(1), a member whose pension commencement date is on or after December 1, 2004 may elect to commute up to 25% of his pension by delivering to the Board prior to his first pension payment any documents as may be prescribed by the Board for this purpose including, but not limited to, the application form prescribed for this purpose under the Pension Benefits Act, and in the case where the member has a spouse, the spousal waiver prescribed for this purpose by the Pension Benefits Act. The commuted value of the selected percentage of the member's pension shall be transferred to the member's registered retirement income fund, as defined by the Income Tax Act, and subject to eligibility of such transfer under the Income Tax Act. If such commuted value exceeds the amount eligible for such transfer under the Income Tax Act, the excess shall be paid in cash. The member's pension shall be reduced by the selected percentage before the first payment is made.

75(4) Notwithstanding anything to the contrary contained herein, upon the written request of a member or former member, the member or former member may receive, prior to his normal retirement date, the commuted value of the deferred pension to which the member is entitled under the Plan with credited interest as a lump sum payment if the following conditions are met:

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

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

(c) if the member has a spouse, the spouse provides the waiver prescribed for this purpose in accordance with the Pension Benefits Act.

16 The Act is amended by adding the following Part XVII after section 84:

PART XVII

THE CODIAC TRANSIT COMMISSION

Application of Part

84.1 This Part XVII shall apply to those Codiac Transit employees who became members of the Plan on August 26, 2002. The employees of Codiac Transit who become members of the Plan after August 26, 2002 shall be bound by all other provisions of the Plan and any applicable agreements, as amended from time to time, exclusive of this Part XVII.

Transfer of Funds into the Plan

84.2 Employees of Codiac Transit who became members of this Plan on August 26, 2002, and who hold funds in a Group registered retirement savings plan sponsored by Codiac Transit ("Group RRSP") or a personal registered retirement savings plan ("RRSP") funded by a previous transfer of funds from the Group RRSP, shall be eligible to exercise a one-time election to transfer such funds from the Group RRSP or the personal RRSP into the Plan, as approved by the Board and in such manner as the Board directs, subject to the limits and requirements of the Income Tax Act.

Recognition of Pensionable Service

84.3 Employees of Codiac Transit who elected to transfer funds into this Plan pursuant to section 84.2 shall be granted with pensionable service under the Plan, for the period prior to August 26, 2002, in an amount determined by the Board, based on the transfer made pursuant to section 84.2, but not to exceed the actual period of permanent employment with Codiac Transit before August 26, 2002, subject to any applicable agreements, and the requirements of the Pension Benefits Act and the Income Tax Act.

Exclusion from Calculation of Excess Contributions

84.4 Pensionable service granted in accordance with section 84.3 and the amount transferred in accordance with section 84.2 are excluded from the calculation of excess contributions on retirement, termination of continuous service, or pre-retirement death, as described in subsections 24(2), 34(2) and 45. If the amount transferred to the Plan in accordance with section 84.2 plus credited interest to the date of termination of continuous service exceeds the commuted value of the pension or deferred pension to which a Codiac Transit employee becomes entitled to for the period of pensionable service granted under section 84.3 upon retirement, termination of continuous service or pre-retirement death, such pension or deferred pension shall be increased by the amount necessary to eliminate such excess, subject to the requirements of the Pension Benefits Act and the Income Tax Act.

17 Section 16 shall be deemed to have come into force on August 26, 2002.

18 Sections 9, 10, 11, 12, 13, 14, and 15 shall be deemed to have come into force on December 1, 2003.

19 Section 6 shall be deemed to have come into force on January 1, 2007.