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

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.

Marginal note:If amount is not more than $500

• 16 (1) If the amount to be paid is not more than $500, the participant shall pay it in a lump sum no later than 30 days after

  • (a) the day of the election, if the participant opted for an amount of not more than $500; or

  • (b) in any other case, the date of the notice advising the participant of the amount to be paid.

• Marginal note:Partial payment

  (2) If the participant pays less than that amount, the participant is deemed to have opted, at the time of making the election, for the amount received by the Minister.

Marginal note:If amount is more than $500

17 If the amount to be paid is more than $500, the participant shall pay it by way of monthly instalments.

Marginal note:Instalments

• 18 (1) The instalments shall be payable in equal amounts that may not be less than $5.00, except the last one, and be calculated using the mortality rates set out in the Complete life table, Canada, 1995-97, published by Statistics Canada, and interest at four per cent compounded annually.

• Marginal note:When payable

  (2) The instalments shall be payable on the first day of each month following the month of the election until the earlier of

  • (a) the end of the period chosen by the participant ending before the later of 20 years and the participant’s 65th birthday, and

  • (b) the death of the participant.

• Marginal note:Change in amount to pay

  (3) When the amount shown in the notice advising the participant of the amount to be paid is larger than the amount on which the participant’s instalments are based,

  • (a) the participant is deemed to have chosen the period consistent with paragraph (2)(a) that would result in the lowest possible instalments not lower than the current instalments; and

  • (b) any arrears shall be paid by instalments on the first day of each month following the month of the notice, calculated in the manner referred to in subsection (1), except that the instalments may be for less than $5.00, until the end of the remainder of the period deemed to have been chosen or, if earlier, the death of the participant.

Marginal note:Amending plan of instalments

19 The participant may decrease the period of instalments by increasing the amount of the remaining instalments.

Marginal note:Default

• 20 (1) A participant or pensioner who has been sent a notice of payment default shall pay the arrears by way of monthly instalments.

• Marginal note:Time and amount of payment

  (2) The instalments

  • (a) shall be calculated in the manner referred to in subsection 18(1), except that they may be for amounts of less than $5.00;

  • (b) shall be payable on the first day of each month following the date of the notice, until the earlier of

    • (i) the end of the remainder of the period referred to in paragraph 18(2)(a) or (3)(a), or, if that remainder is less than five years, the end of a period, up to a maximum of five years, chosen by the participant or pensioner, and

    • (ii) the death of the participant or pensioner; and

  • (c) after the period referred to in paragraph 18(2)(a) or (3)(a), shall be adjusted to be not less than the amount of the instalment before the last of those referred to in section 17 and the period shall be adjusted accordingly.

Marginal note:Pre-payment

• 21 (1) A person may, at any time, pre-pay any amount that remains unpaid in respect of a past earnings election.

• Marginal note:Application of payment

  (2) The amount paid shall be applied to the payment of any amount referred to in the notice referred to in subsection 20(1) and the person may direct

  • (a) that the remainder be applied towards future instalments; or

  • (b) that the remainder be applied to reduce the balance of the amount to be paid and that the period of instalments remain the same or be decreased.

• Marginal note:No direction

  (3) Unless the person has given the direction no later than 30 days after the date of the payment, the remainder shall be applied to reduce the balance of the amount to be paid and the period of instalments shall be decreased in order that the amount of the instalments remains the same.

Marginal note:Deemed option

22 At the request of a participant or pensioner, they are deemed to have opted, at the time of making the election, for the total of the amounts received by the Minister as of the date of the request, if

• (a) they establish that financial hardship will be caused if they are required to continue to pay the instalments; or

• (b) at the commencement date of an annuity or annual allowance, the instalments are greater than the increase in the monthly amount of the benefits payable that results from the election.

Marginal note:Reservation from annuity or annual allowance

23 Instalments shall be reserved from a pensioner’s annuity or annual allowance when it commences.

Marginal note:Election not made

• 24 (1) A past earnings election is deemed not to have been made

  • (a) in the case of an election to count earnings as pensionable earnings from a period after December 31, 1989, if the Minister of National Revenue refuses to issue a certification under paragraph 147.1(10)(a) of the Income Tax Act;

  • (b) at the request of the person who made the election if they received erroneous or misleading information in writing, with respect to the amount to be paid or the consequences of the election on their benefits, from a person whose normal duties include giving information about those matters, and, in making the election, they acted on that information; or

  • (c) if the person who made the election has not paid the amount to be paid under subsection 16(1) within the required period.

• Marginal note:Refund

  (2) If a past earnings election is deemed not to have been made, any payments received from a plan, fund, or institution of a type referred to in paragraph 61(1)(a) shall be transferred to a plan, fund, or institution, of any type referred to in that paragraph, at the direction of the person who made the election.

• Marginal note:New election

  (3) Despite the expiry of the period for making the election, the person may make an election no later than 90 days after the later of

  • (a) the day on which the election is deemed, under paragraph (1)(b), not to have been made; and

  • (b) the date of the notice informing the person of the refusal by the Minister of National Revenue.

• Marginal note:No election after second refusal

  (4) In the case of another refusal, the person shall not make the election.

Marginal note:Amount unpaid at death

25 Any amount referred to in section 87 of the Act shall be recovered by reservation from the monthly benefits payable to the survivor or children under Division 2 of Part 2, in amounts equal to 10 per cent of those benefits. A person may, at any time, pre-pay any amount that remains unpaid.

Marginal note:Crediting of earnings

• 26 (1) The past earnings shall be counted as pensionable earnings in respect of each day that the participant earned them and in the same proportion as the amount to be paid bears to the full amount.

• Marginal note:Date of crediting

  (2) The past earnings shall come to the participant’s credit on the date of the election.

Transfer Value Earnings Elections

Marginal note:When entitled to elect

27 A participant may make a transfer value earnings election commencing the day on which they again become a participant.

Marginal note:Election period ends

28 The participant shall make the transfer value earnings election no later than one year after the date of the written notice advising the participant that they have become entitled to make the election.

Marginal note:Deferment of entitlement

29 A participant who ceases to be a participant before the expiry of the period for making a transfer value 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 the participant that they have again become entitled to make it.

Marginal note:Amount to pay

• 30 (1) A participant who makes an election to count transfer value earnings as pensionable earnings shall pay an amount equal to the transfer value that was determined under section 56, together with interest.

• Marginal note:Interest to be paid

  (2) Interest shall be calculated in accordance with the rates determined under subsection (3), compounded quarterly for the period beginning on the day on which the payment of the transfer value was effected and ending on the last day of the month preceding the month in which the election was made.

• Marginal note:Rate of interest

  (3) The rate of interest in respect of each quarter is equal to the rate of return that existed in respect of the second quarter preceding the quarter for which interest is being calculated and set out in the table entitled “Balanced” on the line “Mercer Median” in the column entitled “3 Months” in the Summary of Investment Performance Survey of Canadian Institutional Pooled Funds, published by Mercer Investment Consulting, as amended from time to time.

• Marginal note:Zero interest

  (4) If the amount of interest calculated under subsection (2) is negative, the amount of interest for the purpose of subsection (1) shall be zero.