Reserve Force Pension Plan Regulations (SOR/2007-32)

Interpretation

Marginal note:Definitions

1 The following definitions apply in these Regulations

Act

Act means the Canadian Forces Superannuation Act. (Loi)

Fund

Fund means the Reserve Force Pension Fund established under section 84. (caisse)

member

member means a member of the reserve force. (membre)

pensioner

pensioner means a member or former member who is entitled to an annuity or annual allowance under Division 1 of Part 2. (pensionné)

Marginal note:Earnings

2 For the purposes of these Regulations,

• (a) earnings means pay earned by a member of the Canadian Forces at the rates prescribed or established under the National Defence Act for their rank, together with earned premiums in lieu of leave;

• (b) a member who is exempted from training and duty under article 9.09 or 9.10 or was granted leave for maternity or parental purposes under article 16.26 or 16.27 of the Queen’s Regulations and Orders for the Canadian Forces is deemed to be in receipt of earnings, during each week for which the member is exempted or granted leave, equal to the weekly rate of pay calculated in accordance with instruction 205.461 of the Compensation and Benefits Instructions for the Canadian Forces established under section 35 of the National Defence Act; and

• (c) in respect of a period in the reserve force before April 1, 1999, where records of the Canadian Forces or the Department of National Defence permit the verification of the rank of a member and the duration of the period but not the ascertainment of the member’s earnings, the member is deemed, for each day of the period, to have been in receipt of earnings equal to ¼ of the standard basic daily rate of pay, applicable to their rank for that day, prescribed or established under the National Defence Act.

PART 1Establishment of the Plan and Participation, Contributions, Pensionable Earnings and Pensionable Service

DIVISION 1Establishment of the Plan and Participation

Establishment of the Plan

Marginal note:Establishment of Reserve Force Pension Plan

3 The Reserve Force Pension Plan is established.

Participation

Marginal note:Interpretation

• 4 (1) For the purposes of this section and section 5,

  • (a) Monthly Earnings Threshold, in respect of any month, means 1/12 of the Year’s Maximum Pensionable Earnings, within the meaning of subsection 2(1) of the Canada Pension Plan, for the calendar year in which the month falls, the result rounded to the nearest cent; and

  • (b) Annual Earnings Threshold, in respect of any period of 12 months, means the total of the Monthly Earnings Thresholds for that period.

• Marginal note:Initial participation

  (2) A member becomes a participant in the Reserve Force Pension Plan

  • (a) on March 1, 2007 if, during each of any two consecutive periods of 12 months beginning on or after April 1, 1999 and ending no later than March 1, 2007, the earnings that they were entitled to receive were equal to or greater than 10 per cent of the Annual Earnings Threshold, if the member already was or became a member of the Canadian Forces during the first month of the first period and remained a member of the Canadian Forces, without any interruption of more than 60 days, until March 1, 2007; or

  • (b) in any other case, on the first day of the month following two consecutive periods of 12 months — the second of which shall end after March 1, 2007 — during each of which the earnings that they were entitled to receive were equal to or greater than 10 per cent of the Annual Earnings Threshold, if the member already was or became a member of the Canadian Forces during the first month of the first period and remained a member of the Canadian Forces without any interruption of more than 60 days throughout those two periods.

• Marginal note:Subsequent participation

  (3) A pensioner or the former participant referred to in section 55 becomes a participant on the day in respect of which they are again entitled to receive earnings as a member.

• Marginal note:Exception

  (4) A member shall not become a participant if they were considered to be a member of the regular force on March 1, 2007 under paragraph 8.1(1)(a) of the Canadian Forces Superannuation Regulations or if, under Part I of the Act, they, as a contributor,

  • (a) are in receipt of an annuity or an annual allowance;

  • (b) are entitled to a deferred annuity or an annual allowance; or

  • (c) are a person in respect of whom the payment of a transfer value has been effected.

Marginal note:Member ceasing to be a participant

• 5 (1) A member ceases to be a participant:

  • (a) on the day on which the member ceases to be a member;

  • (b) on the day before the day on which the member is required to contribute to the Canadian Forces Pension Fund; or

  • (c) on the last day of a period of 12 months, as a participant, in respect of which they were not entitled to receive earnings.

• Marginal note:Member shall not cease to be a participant

  (2) A member who has to their credit less than two years of pensionable service is deemed not to have ceased to be a participant if

  • (a) the member ceased to be a participant by ceasing to be a member and the member has again become a member within 60 days, in which case, for the purpose of these Regulations, the member is deemed not to have ceased to be a member; or

  • (b) the member is entitled to receive earnings equal to or greater than 10 per cent of the Annual Earnings Threshold in respect of each of the two consecutive periods of 12 months ending at the end of the first month following the month during which the member would have ceased to be a participant, if at the end of that month the member reached that minimum entitlement of earnings, or, if not, the end of the second month following that month.

DIVISION 2Contributions, Pensionable Earnings and Pensionable Service

Contributions

Marginal note:Rate of contributions

• 6 (1) The contribution of a participant to the Fund shall be

  • (a) the following percentage of the participant’s earnings:

    • (i) 4.3 per cent in respect of 2007,

    • (ii) 4.6 per cent in respect of 2008,

    • (iii) 4.9 per cent in respect of 2009, and

    • (iv) 5.2 per cent in respect of 2010 and each subsequent year; or

  • (b) 1 per cent of the participant’s earnings, if the participant has to their credit 35 years of pensionable service.

• Marginal note:Limits

  (2) A participant shall not contribute to the Fund in respect of

  • (a) any portion of the participant’s rate of pay in a calendar year that is in excess of the product of 66 2/3 times the defined benefit limit determined for that year in accordance with the definition defined benefit limit in subsection 8500(1) of the Income Tax Regulations; or

  • (b) any of the participant’s earnings in a calendar year after the calendar year in which the participant reaches 71 years of age.

Marginal note:Contribution on deemed earnings

• 7 (1) Reservations on account of contributions in respect of earnings that the participant is deemed to have received under paragraph 2(b) shall be equal to ½ of the amount of the participant’s contributions in respect of earnings after the period of exemption or leave.

• Marginal note:Reservations for subsequent periods

  (2) Reservations on account of contributions in respect of earnings that the participant is deemed to have received in a subsequent period of exemption or leave shall commence after the contributions in respect of earnings for previous periods have been paid.

Marginal note:Opting out

8 The participant may opt not to contribute in respect of earnings that the participant is deemed to have received under paragraph 2(b) during a period of exemption or leave, before all of the contributions have been paid, and the contributions already paid shall be refunded.

Marginal note:Recovery of unpaid contributions

9 Any contribution that remains unpaid at the time that a pensioner commences to receive an annuity or annual allowance under Division 1 of Part 2 shall be recovered by reservation from the monthly benefits payable to the pensioner under Divisions 1 and 3 of that Part in amounts equal to 10 per cent of those benefits.

Pensionable Earnings

Marginal note:Pensionable earnings

• 10 (1) There shall be counted as pensionable earnings

  • (a) the earnings in respect of which the participant is required to make the contribution to the Fund set out in paragraph 6(1)(a); and

  • (b) subject to subsections 11(3), 26(1) and 32(1), the earnings in respect of which the participant makes an election to count as pensionable earnings.

• Marginal note:Not pensionable earnings

  (2) There shall not be counted as pensionable earnings those earnings in respect of which

  • (a) the participant has opted, under section 8, not to contribute;

  • (b) the member was entitled to a return of contributions, within the meaning of section 38;

  • (c) the payment of a transfer value has been effected in accordance with section 61; or

  • (d) an amount is charged to the Fund and credited to the Canadian Forces Pension Fund under section 83.

Marginal note:Election

• 11 (1) A participant is entitled to make an election, once only in respect of each type of earnings in each period during which the participant is a participant, to count past earnings and transfer value earnings as pensionable earnings.

• Marginal note:Past earnings

  (2) Past earnings are the earnings, up to the product calculated under paragraph 6(2)(a), in respect of

  • (a) any period in the reserve force, including any period before March 1, 2007, during which the participant was not a participant except any period

    • (i) that the participant is counting as pensionable service for the purposes of, or in respect of which the payment of a transfer value or a commuted value has been effected under, the Public Service Superannuation Act or the Royal Canadian Mounted Police Superannuation Act, or

    • (ii) in respect of which the payment of a transfer value has been effected in accordance with section 61;

  • (b) any period in the reserve force in respect of which the participant was entitled to a return of contributions within the meaning of section 38; and

  • (c) any period in the regular force in respect of which the participant was entitled to a cash termination allowance or a return of contributions.

• Marginal note:Most recent earnings

  (3) A past earnings election is for all of the past earnings. However, there shall be counted as pensionable earnings, starting with the most recent, only those that would result in a maximum of 35 years of pensionable service to the credit of the participant.

• Marginal note:Transfer value earnings

  (4) Transfer value earnings are those earnings in respect of which the payment of the last transfer value was effected in accordance with section 61.

Past Earnings Elections

Marginal note:When entitled to elect

• 12 (1) A participant may make a past earnings election no earlier than two years after the day on which the participant became a participant.

• Marginal note:Former participant

  (2) If the participant had formerly been a participant, they may make the election as soon as they again become a participant.

• Marginal note:Participant since March 1, 2007

  (3) A participant, who becomes a participant on March 1, 2007 and remains a participant without interruption, may make the election beginning on the day after the first day, on or after March 1, 2007, in respect of which they are entitled to receive earnings but no earlier than the first day of the 25th month following the two periods referred to in paragraph 4(2)(a).

• Marginal note:Exception

  (4) A participant who has ceased to contribute to the Fund by virtue of paragraph 6(2)(b) is not entitled to make a past earnings election.

Marginal note:Election period ends

13 The participant shall make the past earnings election no later than the later of one year after the date of the written notice advising the participant that they have become entitled to make the election and March 1, 2011.

Marginal note:Deferment of entitlement

14 A participant who ceases to be a participant before the expiry of the period for making a past earnings election shall, on again becoming a participant, be entitled to make the election until the end of one year after the date of the written notice advising them that they have again become entitled to make it.

Marginal note:Amount to be paid

• 15 (1) A participant who makes an election to count past earnings as pensionable earnings shall pay the full amount to count all of those past earnings that can be counted as pensionable earnings or a lesser amount for which the participant opts at the time of making the election.

• Marginal note:Determination of full amount

  (2) The full amount shall be the total of all amounts — plus interest at seven per cent compounded annually and calculated from the middle of the calendar year until the day of the election — determined for each calendar year by the following formula applied to those past earnings that can be counted as pensionable earnings that relate to any period in that year:

  A × B

  where

  A

  is the contribution rate set out in paragraph 6(1)(a) on the date of the election or, if the participant has remained a participant since March 1, 2007, 4.3 per cent; and

  B

  is the amount that would be calculated as the updated pensionable earnings under subsection 37(2), for the calendar year if

  • (a) the participant’s past earnings that can be counted as pensionable earnings for that calendar year were their pensionable earnings for that calendar year, and

  • (b) the year in which the election is made or, if the participant has remained a participant since March 1, 2007, the year 2007, is the year that the participant ceased to be a participant.

• Marginal note:Retroactive changes not included in calculations

  (2.1) The calculation referred to in the description of B of the formula in subsection (2) shall not include any retroactive adjustments to the participant’s earnings made after the day on which they make the election referred to in subsection (1).

• Marginal note:Restriction

  (3) The participant cannot modify the amount for which the participant has opted.