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

Regulations are current to 2022-06-20 and last amended on 2016-03-29. Previous Versions

PART 2Benefits (continued)

DIVISION 1Member’s Benefits (continued)

Participant Who Has Not Less Than Two Years of Pensionable Service (continued)

Marginal note:Calculation of transfer value

 The transfer value is an amount, together with interest calculated in accordance with section 62, equal to the greater of

  • (a) the actuarial present value, on the date of the option, of the accrued pension benefits that would be payable to or in respect of the pensioner, and

  • (b) a return of contributions, calculated as of the date of the option as if the pensioner had been entitled to a return of contributions on that date.

Marginal note:Pensionable earnings to pensioner’s credit

 The calculation of the accrued pension benefits shall be based on the pensionable earnings to the pensioner’s credit on the day after the day on which they cease to be a participant and for which they have paid or ought to have paid before the date of the option.

Marginal note:Calculation rules

 The calculation of the actuarial present value of the accrued pension benefits is subject to the following rules:

  • (a) the indexing benefits referred to in Division 3 are to be increased to take into account the period beginning on the later of January 1 of the year in which the option was made and the day on which the pensioner ceased to be a participant and ending on the date of the option; and

  • (b) the possibility that the pensioner could receive an annual allowance is to be excluded.

Marginal note:Actuarial valuation report

  •  (1) For the purpose of subsection (2), the actuarial valuation report is the actuarial valuation report most recently laid before Parliament, under section 56 of the Act, before the date of the option or, if that report was laid before Parliament in the month in which the option was made or in the preceding month, the preceding report that was laid before Parliament, in each case with any terminological modifications that the circumstances require.

  • Marginal note:Actuarial assumptions

    (2) In determining the actuarial present value of the accrued pension benefits, the following actuarial assumptions are to be used:

    • (a) the mortality rates for pensioners and survivors are the mortality rates, including annual percentages of mortality reduction, in respect of contributors and survivors used in the preparation of the actuarial valuation report;

    • (b) the interest rates are the interest rates for fully indexed pensions — adjusted by the interest rates for unindexed pensions to take into account Division 3 — determined in accordance with the section entitled “Pension Commuted Values” of the Standards of Practice — Practice-Specific Standards for Pension Plans, published by the Canadian Institute of Actuaries, as amended from time to time;

    • (c) the probability that a pensioner will be survived by children is based on the rates regarding the average number, average age and eligibility status of children at the death of a pensioner, used in the preparation of the actuarial valuation report;

    • (d) the probability that a pensioner will become entitled to an annuity under subsection 50(1) is based on the rates of termination owing to disability (any occupation), in respect of contributors used in the preparation of the actuarial valuation report, taking into account the probability — as set out in that report — that there would be immediate eligibility for a disability pension under the Canada Pension Plan or a provincial pension plan; and

    • (e) the probability that a pensioner will have a survivor at death is based on the probability that a contributor will have a survivor at death and on the age difference between the contributor and the survivor that was used in the preparation of the actuarial valuation report.

Marginal note:Deductions from payment

 There shall be deducted from the amount of the transfer value

  • (a) contributions remaining unpaid in respect of earnings that the pensioner is deemed to have received under paragraph 2(b); and

  • (b) arrears in respect of a past earnings election.

Marginal note:Payment effected by transfer

  •  (1) The payment of a transfer value is effected

    • (a) by transferring any portion that may, in accordance with section 8517 of the Income Tax Regulations, be transferred, at the direction of the former participant, to

      • (i) a pension plan that is registered under the Income Tax Act, if that pension plan so permits,

      • (ii) a retirement savings plan or fund for the former participant that is of the kind prescribed for the purposes of section 26 of the Pension Benefits Standards Act, 1985, or

      • (iii) a financial institution authorized to sell immediate or deferred life annuities, as defined in subsection 2(1) of the Pension Benefits Standards Regulations, 1985, for the purchase from that financial institution of such an annuity for the former participant; and

    • (b) by paying any excess to the former participant.

  • Marginal note:Payment if former participant deceased

    (2) If, after the option for the payment of the transfer value described in section 53 has been exercised but before that payment has been effected, the former participant dies, the following rules apply:

    • (a) the amount that may be transferred shall be paid accordingly and any excess shall be paid

      • (i) to the person who would have been entitled to an annual allowance as a survivor under Division 2 had the option for the payment of a transfer value not been exercised, or

      • (ii) to the former participant’s estate or succession if there is no person who would have been entitled to the annual allowance as a survivor; or

    • (b) if no amount may be transferred, all of the transfer value shall be paid in accordance with subparagraphs (a)(i) and (ii)

  • Marginal note:Apportionment

    (3) If there are two persons who would have been entitled to an annual allowance under Division 2 as survivors had the transfer value option not been exercised, each of them shall be entitled to a portion determined in accordance with section 64 as if the reference to “death benefit” in that section were a reference to “excess” or “transfer value”, as the case may be.

  • SOR/2016-64, s. 70

Marginal note:Calculation of interest

  •  (1) Interest shall be calculated, in accordance with the rate determined under subsections (2) and (3), and converted to an effective annual rate, for the period beginning on the date of the option and ending on the last day of the month before the month in which the transfer value is paid or, if the former participant has not given the direction referred to in paragraph 61(1)(a), ending 90 days after the date of the option.

  • Marginal note:Rate of interest

    (2) The rate of interest is equal to the rate of return that existed in respect of the second quarter before the date of the option 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

    (3) If the rate of return is negative, the rate of interest is 0.0%.

DIVISION 1.1Debit Balances in Pay Accounts

Marginal note:Recovery of debit balances

 For the purposes of section 89 of the Act, any debit balance in the pay account of a former member of the reserve force shall be recovered

  • (a) from any return of contributions or a transfer value to which the former member is entitled, in a lump sum; or

  • (b) from any annuity or annual allowance to which the former member is entitled,

    • (i) by monthly instalments in an amount equal to 10% of their gross monthly annuity or allowance, or

    • (ii) by monthly instalments in an amount equal to 50% of their gross monthly annuity or allowance, if they have been convicted of an offence under the Criminal Code or the National Defence Act that led, directly or indirectly, to the debit balance.

  • SOR/2016-64, s. 71

DIVISION 2Benefits to Survivors, Children and Other Beneficiaries

Participant Who Has Less Than Two Years of Pensionable Service

Marginal note:Death benefits

 The survivor of a participant who has to their credit less than two years of pensionable service is entitled to a death benefit equal to the greater of a return of contributions and an amount determined by the formula

A × B/C

where

A
is the participant’s pensionable earnings in the 12 months prior to the month of death;
B
is the number of years of pensionable service to the participant’s credit; and
C
is the lesser of 12 and the number of months of pensionable service to the participant’s credit .

Marginal note:Apportionment if two survivors

  •  (1) If two survivors are entitled to the death benefit, each survivor’s portion shall be determined by the formula

    A × B/C

    where

    A
    is the amount of the death benefit;
    B
    is the total number of years that the survivor cohabited with the participant while married to or in a relationship of a conjugal nature with the participant; and
    C
    is the total number of years that the two survivors cohabited with the participant while married to or in a relationship of a conjugal nature with the participant.
  • Marginal note:Rounding Years

    (2) In determining the number of years, a part of a year shall be counted as a full year if the part is six or more months and shall not be counted if it is less.

Marginal note:Minimum benefit — no survivor

 If a participant, who has to their credit less than two years of pensionable service, dies leaving no survivor entitled to the death benefit, a death benefit equal to a return of contributions shall be paid to the estate or succession of the participant.

  • SOR/2016-64, s. 72

Participant Who Has Not Less Than Two Years of Pensionable Service

Definition of basic allowance

 For the purpose of sections 67 and 68, basic allowance means

  • (a) an amount equal to one per cent of the greater of the pensioner’s total pensionable earnings and total updated pensionable earnings; or

  • (b) if the pensioner was in receipt of an annual allowance at the time of death, an amount determined by the formula

    A × B/C

    where

    A
    is the amount calculated under paragraph (a),
    B
    is the amount of the annual allowance, and
    C
    is the amount of the deferred annuity to which the pensioner was entitled.

Marginal note:Benefits to survivor of a pensioner

  •  (1) The survivor of a pensioner is entitled to an annual allowance equal to the basic allowance or, if there are two survivors, to an amount determined by the formula

    A × B/C

    where

    A
    is the amount of the basic allowance;
    B
    is the total number of years that the survivor cohabited with the pensioner while married to or in a relationship of a conjugal nature with the pensioner; and
    C
    is the total number of years that the two survivors cohabited with the pensioner while married to or in a relationship of a conjugal nature with the pensioner.
  • Marginal note:Rounding Years

    (2) In determining the number of years, a part of a year shall be counted as a full year if the part is six or more months and shall not be counted if it is less.

  • Marginal note:Death of one of two survivors

    (3) If one of the survivors dies, the remaining survivor’s annual allowance shall be equal to the basic allowance commencing the first day of the month following the death of the survivor.

Marginal note:Course of study

  •  (1) For the purposes of this section and sections 69 and 72, course of study means a course of training or instruction given by a school, college, university or other institution of an educational, professional or technical nature.

  • Marginal note:Benefits to child of a pensioner

    (2) Each child of a pensioner who, at the date of the pensioner’s death, is under 18 years of age or is 18 or more years of age but less than 25 years of age and enrolled in and pursuing a full-time course of study is entitled

    • (a) if the pensioner died leaving a survivor entitled to an allowance under this Division, to an annual allowance equal to ¼ of the basic allowance or, if there are more than two children, to an annual allowance equal to ½ of the basic allowance divided by the number of children; or

    • (b) if the pensioner died without leaving a survivor entitled to receive an allowance under this Division, and

      • (i) there are fewer than four children, to an annual allowance equal to ½ of the basic allowance, or

      • (ii) there are more than three children, to an annual allowance equal to 1 ½ times the basic allowance divided by the number of children.

  • Marginal note:Recalculation

    (3) The proportion of the basic allowance that constitutes the annual allowance shall be revised when the number of children who are entitled changes.

  • Marginal note:Continuing entitlement

    (4) The child of a pensioner who, at the date of the pensioner’s death, was entitled to an annual allowance shall be entitled to the annual allowance for any period during which the child is enrolled in and pursuing a full-time course of study until the child reaches 25 years of age.

  • Marginal note:Presumption

    (5) A child, at the date of the pensioner’s death, is deemed to have been enrolled in and pursuing a full-time course of study if the child

    • (a) is again enrolled in and pursuing a full-time course of study, or dies, no later than the last day of the fifth month after the month in which the child ceased to be enrolled in and pursuing the full-time course of study; or

    • (b) is not again enrolled in and pursuing a full-time course of study within that period due to illness and is again enrolled in and pursuing a full-time course of study, or dies, no later than the last day of the twelfth month after the month in which the child ceased to be enrolled in and pursuing the full-time course of study.

  • Marginal note:Scholastic break

    (6) A child is deemed not to have ceased to be enrolled in and pursuing a full-time course of study if the child fulfils the conditions set out in paragraph (5)(a) or (b).

Marginal note:Declaration

 The entitlement to an annual allowance of a child who is 18 or more years of age but less than 25 years of age and enrolled in and pursuing a full-time course of study is subject to the child submitting to the Minister, in respect of each period of enrolment,

  • (a) a declaration by a responsible officer of the relevant institution that the child is or was enrolled in a full-time course of study; and

  • (b) a declaration by the child that the child is or was pursuing a full-time course of study.

Marginal note:Benefits to survivor and child of a participant

 The survivor and child of a participant, where the participant has to their credit not less than two years of pensionable service, are entitled to the annual allowances to which they would have been entitled under section 67 or 68 had the participant, immediately before death, become a pensioner.

Marginal note:Commencement of annual allowance

  •  (1) The commencement date of the annual allowance payable to the survivor or child is the day after the death.

  • Marginal note:Recommencing studies

    (2) In the case of a child who has ceased to be entitled and who again becomes so entitled, the commencement date is the first day of the month in which the child enrols in and pursues a full-time course of study.

 
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