Pension Benefits Division Regulations (SOR/94-612)

• 15 (1) In determining the actuarial present value of a member's accrued pension benefits, the following actuarial assumptions are to be used:

  • (a) if the member is employed on valuation day

    • (i) the termination and retirement rates for current contributors, used in the preparation of the last actuarial valuation report for the member's pension plan laid before Parliament, modified to reflect any special conditions that apply to the tenure of office or service or to special benefits in respect of an occupational group of the members of the pension plan, and

    • (ii) the mortality rates for current and former contributors, including mortality projection factors, used in the preparation of the report referred to in subparagraph (i), or the mortality rates, including mortality projection factors, referred to in the section entitled “Pension Commuted Values” of the Standards of Practice – Practice-Specific Standards for Pension Plans (the “Standards”), published by the Canadian Institute of Actuaries, as amended from time to time, whichever will produce the greater actuarial present value of a member’s accrued pension benefits;

  • (b) if the member ceased to be employed before valuation day, the mortality rates for former contributors, other than disabled contributors, including mortality projection factors, used in the preparation of the report referred to in subparagraph (a)(i), or the mortality rates, including mortality projection factors, referred to in the Standards, whichever will produce the greater actuarial present value of a member’s accrued pension benefits;

  • (c) a zero probability of a member becoming entitled to a pension by reason of disability; and

  • (d) the interest rates determined in accordance with the Standards, namely,

    • (i) in respect of periods during which the member is a recipient, the interest rates for fully indexed pensions, adjusted to reflect an annual basis of payment, and

    • (ii) in respect of periods during which the member is not a recipient, the interest rates for unindexed pensions.

• (2) The last actuarial valuation report for the pension plans referred to in subparagraphs (a)(iii) and (v) of the definition pension plan in section 2 of the Act shall be the last actuarial valuation report in respect of the pension plans referred to in subparagraphs (a)(ii) and (iv), respectively, of that definition.

• (3) The last actuarial valuation report for the pension plans referred to in subparagraphs (a)(vi), (vii) and (viii) of the definition pension plan in section 2 of the Act shall be the last actuarial valuation report in respect of the pension plan laid before Parliament under the Public Service Superannuation Act.

• (4) For the purposes of this section, the last actuarial valuation report is the most recent actuarial valuation report laid before Parliament in accordance with section 9 of the Public Pensions Reporting Act or, if the actuarial valuation report has been tabled in the month in which valuation day occurs or in the preceding month, the immediately previously tabled report.

16 For the purposes of section 8 of the Act, the value of pension benefits that have accrued to a member who is not vested on valuation day is equal to the sum of

• (a) the contributions made by the member under the member’s pension plan during the period subject to division, and

• (b) the interest that would have been payable to the member under the member’s pension plan in respect of the amount determined under paragraph (a) had the member begun to be a member of the pension plan on the first day of the period subject to division and ceased to be a member on valuation day.

Division

• 17 (1) For the purposes of subparagraph 8(1)(a)(ii) of the Act, a retirement savings plan or fund of the prescribed kind is

  • (a) if the transfer is being made in respect of the spouse, former spouse or former common-law partner of a member who is vested at valuation day, a retirement savings plan prescribed for the purposes of section 26 of the Pension Benefits Standards Act, 1985 and administered in accordance with that Act; and

  • (b) if the transfer is being made in respect of the spouse, former spouse or former common-law partner of a member who is not vested at valuation day, a registered retirement savings plan or registered retirement income fund as defined in the Income Tax Act.

• (2) For the purposes of subparagraph 8(1)(a)(iii) of the Act, immediate life annuity and deferred life annuity, as those expressions are defined in subsection 2(1) of the Pension Benefits Standards Regulations, 1985, are of the prescribed kind.

Charging

18 Where an amount has been transferred pursuant to section 8 of the Act, that amount shall be charged to the account from which the member’s pension benefits are or will become payable.

Adjustment

• 19 (1) In this Part, division factor is 0.5, except that

  • (a) where the amount transferred is a lump sum amount referred to in subsection 8(4) of the Act, the division factor is equal to the product of

    (A ÷ B) × 0.5

    where

    A

    is the amount determined under subsection 8(4) of the Act, and

    B

    is the amount determined under these Regulations that, but for subsection 8(4) of the Act, would have been transferred pursuant to paragraph 8(1)(a) of the Act; and

  • (b) where the member was not vested at valuation day and is entitled to a pension under the member’s pension plan on the day the pension benefits are adjusted, the division factor is equal to the product of

    (C ÷ D) × 0.5

    where

    C

    is the amount transferred under paragraph 8(1)(a) of the Act, and

    D

    is the amount that, but for subsection 8(4) of the Act, would have been transferred pursuant to paragraph 8(1)(a) of the Act had the member been vested on valuation day.

• (2) For the purposes of determining the indexed division annuity, if separation day occurs before termination day, the division annuity of a member is to be increased on termination day by the benefit indices established under the Supplementary Retirement Benefits Act that would apply if the member had ceased to be employed on separation day, and further increased to take into account the period beginning on January 1 of the year in which termination day occurs and ending on termination day.

20 Where a transfer has been effected pursuant to section 8 of the Act, the pension benefits of the member shall be adjusted

• (a) in accordance with sections 21 and 22, where the member is entitled to a pension under the member’s pension plan;

• (b) in accordance with section 23, where the member is entitled to a return of contributions or a cash termination allowance;

• (c) in accordance with subsection 23.1(1), if the member has directed that a payment be made to an eligible employer under a transfer agreement entered into under section 40.2 of the Public Service Superannuation Act; and

• (d) in accordance with subsection 23.1(1.1), if the member has directed that a payment be made to an eligible employer under a transfer agreement entered into under section 24.1 of the Royal Canadian Mounted Police Superannuation Act.

• 21 (1) The member’s pension benefits shall be adjusted beginning on the later of the day on which a pension is first payable under the pension plan and the first day of the month following valuation day.

• (2) For the purpose of adjusting a member’s pension benefits, the member’s annuity shall be reduced by

  • (a) an amount equal to the member’s reduction, in respect of any period during which the member is not a recipient; and

  • (b) an amount equal to the member’s indexed reduction, in respect of any period during which the member is a recipient.

• (3) A reduction or indexed reduction referred to in subsection (2) shall be reduced by an amount equal to the reduction adjustment after the later of

  • (a) the first day of the month after valuation day; and

  • (b) the first day of the month in which a CPP deduction from the member’s annuity is required to be made under the member’s pension plan.

22 Notwithstanding section 21, where a transfer has been effected pursuant to paragraph 8(1)(a) of the Act and the member is entitled to

• (a) a pension by reason of disability, the reduction of the pension benefits shall begin on the first day of the month following the month during which the member would first be entitled to receive a pension that would not be reduced on account of age;

• (b) a pension that is reduced on account of age before or after becoming entitled to a pension by reason of disability, the reduction of the pension benefits shall be determined as if the member were not entitled to a pension by reason of disability; or

• (c) supplementary benefits by reason of disability, the member shall not be considered a recipient for the purposes of subsection 21(2) until the day the member would have become a recipient by reason of age or by reason of age and pensionable service.

23 The return of contributions or the cash termination allowance to which a member is entitled under the member’s pension plan shall be reduced by the product of

• (a) the return of contributions the member would have been entitled to receive in respect of the period subject to division, determined in the case of a member who is entitled to a cash termination allowance as if the member were entitled to a return of contributions, had there not been a transfer of the member’s pension benefits pursuant to paragraph 8(1)(a) of the Act; and

• (b) the division factor.

• 23.1 (1) Any amount to be paid in respect of a member to an eligible employer pursuant to a transfer agreement entered into under section 40.2 of the Public Service Superannuation Act, or to be paid to the member as a consequence of that payment, shall be reduced by the actuarial present value of the reduction that would have been made to the member’s pension benefits under sections 20 and 21 had the member remained employed in the Public Service.

• (1.1) Any amount to be paid in respect of a member to an eligible employer under a transfer agreement entered into under section 24.1 of the Royal Canadian Mounted Police Superannuation Act, or to be paid to the member as a consequence of that payment, shall be reduced by the actuarial present value of the reduction that would have been made to the member’s pension benefits under sections 20 and 21 had the member remained a member of the Royal Canadian Mounted Police.

• (2) The actuarial present value shall be calculated in accordance with the methodology and assumptions set out in the agreement.

24 Where a transfer has been effected pursuant to paragraph 8(1)(a) of the Act, any minimum benefit payable under the member’s pension plan shall be determined on the basis that the member’s annuity is reduced by the amount of the indexed reduction.

25 Despite any provision of a pension plan, if a division of the pension benefits that have accrued to a member under that pension plan in respect of any period of pensionable service has been effected, the spouse, former spouse or former common-law partner in whose favour the division is effected ceases to be entitled to any pension to which he or she would have been entitled as a surviving spouse or surviving common-law partner in respect of that period of service.