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The Pension Benefits Amendment Act

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S.M. 1992, c. 36

The Pension Benefits Amendment Act

(Assented to June 24, 1992)

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:

C.C.S.M. c. P32 amended

1           The Pension Benefits Act is amended by this Act.

2(1)        Subsection 1(1) is amended

(a) by repealing the definition "deferred life annuity" and substituting the following:

"deferred life annuity" means a life annuity that commences at retirement age under a pension plan but in any event not later than the end of the calendar year in which the annuitant attains the age of 71 years; («rente viagère différée»)

(b) in the definition "pension plan" by adding the following after clause (d):

"but does not include a retirement compensation arrangement as defined in the Income Tax Act (Canada) that provides pension benefits in excess of the maximum benefit permitted by that Act and the regulations made thereunder;"

(c) by adding the following definition in alphabetical order:

"YMPE" means the Year's Maximum Pensionable Earnings as defined in the Canada Pension Plan. («MGAP»)

2(2)        Subsection 1(2) is repealed.

3           Section 8 is repealed and the following is substituted:

Inspection powers of superintendent

8(1)        The superintendent or the superintendent's duly authorized representative may, at any reasonable time,

(a) inspect the books, files, documents and other records relating to a pension plan kept by any employer or by any insurer, administrator or trustee of a pension plan or by any other person;

(b) by notice in writing, require any employer or any insurer, administrator or trustee of a pension plan, or any other person, to furnish to the superintendent, in a form acceptable to the superintendent, such information as the employer, insurer, administrator, trustee or person has and as the superintendent considers necessary for the purpose of ascertaining whether or not this Act and the regulations have been or are being complied with.

Grounds for order

8(2)        The superintendent may make an order in accordance with subsection (3)

(a) where a notice is given under clause (1)(b) and the recipient fails to respond within 10 days from the date of receipt of the notice;

(b) where, in the opinion of the superintendent, a pension plan or the manner in which it is being administered is not in conformity with this Act or the regulations;

(c) where, in the opinion of the superintendent, an employer or the insurer, administrator or trustee of a pension plan or any other person has committed a breach of a provision of this Act or the regulations; or

(d) where the insurer, administrator or trustee of a pension plan cannot be located or is insolvent and there is no other person to undertake the winding-up of the pension plan.

Contents of order

8(3)        The superintendent may, by an order made pursuant to subsection (2),

(a) require any person in breach of a provision of this Act or the regulations to remedy the breach without delay or within a specified period of time;

(b) require an employer who has established a pension plan or the insurer, administrator or trustee of the pension plan, or any person charged with a duty in respect of the pension plan, to take or to refrain from taking a specified action or proposed action with respect to the pension plan;

(c) appoint a person to act in place of and to perform the duties of the insurer, administrator or trustee of a pension plan;

(d) assume the duties of the insurer, administrator or trustee of a pension plan;

and the order shall state the reasons for the making thereof.

Administration expenses

8(4)        Where the superintendent appoints a person under clause (3)(c) to act in place of the insurer, administrator or trustee of a pension plan, or assumes the duties of the insurer, administrator or trustee of a pension plan under clause (3)(d), the reasonable administration expenses of the person or superintendent may be paid out of the pension fund.

Service on affected person

8(5)        A copy of any order made under this section shall be served by certified mail upon the person affected by it or, if the person cannot be located, shall be mailed by certified mail to the last known address of the person, and the date of mailing shall be deemed to be the date of service.

Appeal to commission

8(6)        A person affected by an order made under this section may appeal from the order to the commission, within a period of time prescribed in the order or such further period of time as the commission may allow.

Statement of appeal

8(7)        An appeal under this section shall be commenced by filing with the commission a copy of the order appealed from together with a written statement setting out the grounds of the appeal and the relief requested.

Hearing by commission

8(8)        The commission shall hear an appeal under this section as soon as practicable but not later than 30 days after the date of filing of the order and statement under subsection (7).

Appellant may attend hearing

8(9)        The appellant in an appeal before the commission under this section may attend the hearing of the appeal, either alone or with counsel, and present argument.

Powers of commission on appeal

8(10)       Upon hearing an appeal from an order under this section, the commission may

(a) confirm the order as made;

(b) direct the superintendent to vary the order; or

(c) rescind the order.

Appeal from commission

8(11)       A person affected by a decision of the commission at a hearing held under this section may appeal from that decision to the Court of Appeal, and section 36 applies to the appeal with such modifications as the circumstances require.

4           Section 10 is amended by renumbering it as subsection 10(1) and by adding the following as subsection 10(2):

Delegation of powers and duties of commission

10(2)       The commission may in writing delegate to the superintendent, subject to such terms and conditions as the commission may specify, any of the powers and duties conferred or imposed upon it by this Act except the power to hear and decide appeals under section 8.

5           Section 11 is amended

(a) by renumbering it as subsection 11(1);

(b) by adding ", the payment of pension benefits and other matters respecting pension plans" at the end of clause (a); and

(c) by adding the following as subsections 11(2) and (3):

Laws governing agreement with a province

11(2)       An agreement under clause (1)(a) between Manitoba and the authorized representative of a designated province shall indicate whether the provisions respecting the payment of pension benefits and the other matters contained in the agreement are to be governed by the laws of Manitoba or the laws of the designated province or a specified combination of both, and the provisions shall be governed by the laws of the province so indicated or the combination so specified.

Laws governing agreement with Canada

11(3)        An agreement under clause (1)(a) between Manitoba and the authorized representative of the Government of Canada shall indicate whether the provisions respecting the payment of pension benefits and the other matters contained in the agreement are to be governed by the laws of Manitoba or the laws of Canada or a specified combination of both, and the provisions shall be governed by the laws so indicated or the combination so specified.

6           The following is added after subsection 18(2):

Plans registered after effective date of subsection

18(2.1)     Every defined benefit pension plan submitted for registration after the coming into force of this subsection shall

(a) specify, in the plan document and every other document governing the plan, the ownership of any surplus assets of the plan for the purpose of determining their disposition;

(b) contain or have attached evidence showing, to the satisfaction of the superintendent, that a majority of the members of the plan have agreed in writing to the ownership of any surplus assets of the plan as specified under clause (a); and

(c) provide, in the plan document, a mechanism satisfactory to the superintendent for resolving disputes between members of the plan and the employer respecting the disposition of surplus assets of the plan.

7(1)        Clause 21(1)(a) is repealed and the following is substituted:

(a) that, where a member of the pension plan has completed service for a continuous period of 10 years or has been a member of the pension plan for a continuous period of 10 years, whichever occurs first, and the member terminates his or her membership in the plan while employed in Manitoba, there vests in the member immediately on that termination an entitlement to receive a deferred life annuity in respect of the period of membership from on or after the qualification date, as the case may be, but before January 1, 1985; and

7(2)        The following is added after subsection 21(1):

Amount of pension payable

21(1.1)     The pension payable pursuant to a pension plan under subsection (1) in respect of employment in Manitoba or in a designated province, other than the portion of the pension accruing from voluntary additional contributions, shall be not less than

(a) for employment on and after the qualification date but before January 1, 1985, the pension that is provided for that employment under the terms of the pension plan at the date of termination of membership; and

(b) for employment before the qualification date, where the pension plan was amended on or after the qualification date but before January 1, 1985, the pension that is provided for that employment under the terms of the amended pension plan.

7(3)        Clause 21(2)(a) is repealed and the following is substituted:

(a) that, where a member of the pension plan has completed service for a continuous period of two years or has been a member of the pension plan for a continuous period of two years, whichever occurs first, and the member terminates his or her membership in the plan while employed in Manitoba, there vests in the member immediately on that termination an entitlement to receive a deferred life annuity in respect of the period of membership from on or after January 1, 1985, as the case may be; and

7(4)        The following is added after subsection 21(2):

Amount of pension payable

21(2.1)     The pension payable pursuant to a pension plan under subsection (2) in respect of employment in Manitoba or in a designated province, other than the portion of the pension accruing from voluntary additional contributions, shall be not less than

(a) for employment on and after January 1, 1985, the pension that is provided for that employment under the terms of the pension plan at the date of termination of membership; and

(b) for employment before January 1, 1985, where the pension plan was amended on or after that date, the pension that is provided for that employment under the terms of the amended pension plan.

Entitlement on winding up of plan

21(2.2)     Subject to this Act, on the termination or winding up of a pension plan there vests in each member of the pension plan, immediately and unconditionally, the entitlement to receive a pension in respect of his or her membership in the plan on and after the qualification date.

Exemption from clauses (1)(b) and (2)(b)

21(2.3)     Where

(a) a pension plan provides a benefit or allocates surplus assets in respect of a person entitled to a benefit and the benefit or surplus asset allocation is in excess of the maximum benefit or contribution limit applicable to the pension plan under the Income Tax Act (Canada); or

(b) the commuted value of the benefits under a pension plan is in excess of the maximum limit that can be transferred to another pension plan or to a registered retirement savings plan under the Income Tax Act (Canada);

the amount of the benefit, surplus asset allocation or commuted value that is in excess of the maximum limit is exempt from the requirements of clauses (1)(b) and (2)(b) and shall not be treated as a deferred life annuity for purposes of this Act.

7(5)        Clause 21(4)(c) is repealed and the following is substituted:

(c) payment to a former member, or the surviving spouse or surviving common-law spouse of a deceased member or a deceased former member, of an amount equal to the commuted value of the deferred life annuity or pension benefit credit to which the former member or spouse is entitled, where

(i) the annual amount payable to the former member at normal retirement age is less than 2% of the YMPE in the year in which the former member died, retired or terminated employment, or

(ii) the commuted value of the pension benefit credit is less than 4% of the YMPE in the year in which the former member died, retired or terminated employment.

7(6)        The following is added after subsection 21(13):

Life income fund

21(13.1)    Notwithstanding subsections (1), (2) and (6), every member or spouse of a member of a pension plan who becomes entitled to a pension benefit under the plan may replace that pension benefit with a life income fund or other arrangement prescribed in the regulations.

7(7)        Subsection 21(20) is amended by adding "or" at the end of clause (d) and by adding the following after clause (d):

(e) a person who retires from the employment of the employer and is in receipt of a pension benefit, but subsequently returns to work for the same employer or another employer covered by the same pension plan;

8           Subsection 23(5) is amended by adding "and section 24" after "For the purposes of this section".

9           Section 24 is amended by adding "or subsequent marriage" after "remarriage".

10          Subsection 25(1) is repealed and the following is substituted:

Rate of interest on defined benefit pension plan

25(1)       Every defined benefit pension plan shall provide that, after January 1, 1984, interest at a rate prescribed in the regulations shall be credited, not less frequently than once every 12 months, to contributions made by members of the pension plan after December 31, 1983.

11          Subsection 26(2) is repealed and the following is substituted:

Restriction on payments out of plan

26(2)       Subject to subsections (2.1), (2.2) and (2.3), no funds, including surplus, in a pension plan shall be paid out of the plan to an employer unless the commission consents thereto in writing.

Conditions for payment of surplus to employer

26(2.1)     The commission shall not under subsection (2) consent to the payment of surplus to an employer out of a pension plan, unless

(a) subject to subsection (2.2), the commission is satisfied that the employer is entitled to receive the surplus under the terms governing the pension plan;

(b) all facts relevant to the payment, including the amount of the assets and liabilities of the pension plan and such other relevant information as the superintendent may require, have been disclosed to all members of the pension plan; and

(c) the employer submits a written application for the payment that contains or has attached the information required by the regulations.

Application to court

26(2.2)     Where the commission is not satisfied that an employer applying for the payment of surplus out of a pension plan is entitled to it under the terms governing the pension plan, the commission shall not consent to the payment unless a judge of the Court of Queen's Bench upon the application of the employer determines that the employer is entitled under those terms to receive the surplus.

Maximum surplus payable

26(2.3)     The maximum amount of any surplus payable to an employer out of a pension plan under this section is that portion of the surplus that is in excess of

(a) two times the total amount of the employer's current annual service contributions; or

(b) 125% of the total amount of the liabilities of the pension plan determined on the basis of factors that would apply if the pension plan were being terminated or wound up on the date of payment, less the total amount of those liabilities determined on the basis of factors applying on the assumption that the pension plan is not being so terminated or wound up;

whichever is the greater, but this subsection does not apply where the payment of surplus occurs upon the termination or winding-up of the pension plan.

12          The following is added after section 26:

Definitions

26.1(1)     In this section,

"employment" means an employee's employment with a participating employer; («emploi»)

"member" means a member, a former member entitled to a deferred benefit or a pensioner; («participant»)

"multi-unit pension plan" means a pension plan designated as a multi-unit pension plan under subsection (2); («régime multipartite»)

"participating employer" means an employer who is contractually required to make contributions to a multi-unit pension plan in respect of employee service; («employeur participant»)

"termination of membership" means

(a) the termination of both an employee's employment with an employer and the employee's membership in the union, association or organization of employees in that employment, or

(b) the occurrence of a continuous period of not less than 24 calendar months during which contributions are not remitted to a multi-unit pension plan by or on behalf of a member. («cessation de participation»)

Designation of multi-unit pension plan

26.1(2)     The superintendent may designate as a multi-unit pension plan any pension plan

(a) the trustees of which have in writing declared their intent that the pension plan should be regulated as a multi-unit pension plan; and

(b) that is in compliance with the provisions of this Act and the regulations.

Opting out of multi-unit plan

26.1(3)     Where the superintendent proposes to designate a pension plan as a multi-unit pension plan, any class of the members of the pension plan that determines by a majority vote to do so may exclude themselves from the multi-unit pension plan before the designation is made.

Board of trustees

26.1(4)     A multi-unit pension plan shall have a board of trustees to administer the plan, and the board shall be constituted so that the number of trustees representing members of the plan is not less than the number of trustees representing employers.

Transfer to another plan

26.1(5)     Where an employee who is a member of a multi-unit pension plan is transferred to other employment governed by another pension plan of a participating employer, the employee may immediately join the other pension plan.

Service credits

26.1(6)     All of an employee's service with participating employers shall be taken into account for purposes of determining eligibility for benefits in a multi-unit pension plan.

Vesting of contributions

26.1(7)     Contributions made to a multi-unit pension plan by, or on behalf of, a member are vested and locked in after the completion of 350 hours of employment in each of two consecutive plan years or a reasonable equivalent approved by the superintendent.

Refund of contributions

26.1(8)     Contributions made to a multi-unit pension plan by a member that are not vested or locked in pursuant to subsection (7) shall be refunded to the member in the manner provided in section 22.

Forfeiture of benefit credit

26.1(9)     Notwithstanding subsection (8), where the pension benefit credit of a member of a multi-unit pension plan is less than 2% of the member's yearly maximum pensionable earnings and the whereabouts of the member are unknown to the administrator of the plan following a period of two years during which no contributions have been made by or on behalf of the member, the pension benefit credit may be forfeited by the administrator of the plan and in that event becomes funds of the plan.

Liability of employer limited

26.1(10)    A participating employer's liability for funding the benefits of a multi-unit pension plan is limited to the amount the participating employer is contractually required to contribute to the plan.

Required provisions in multi-unit plans

26.1(11)    A multi-unit pension plan shall contain provisions, consented to in writing by the superintendent,

(a) specifying the methods of allocation and distribution of the assets of the plan and the priorities for determining the benefits of members entitled to them, where the assets of the plan are not sufficient to pay all benefits on the winding-up of the plan;

(b) providing for the allocation of surplus assets on the winding-up of the plan;

(c) outlining the consequences of a participating employer's withdrawal from the plan, in respect of the funding and vesting of the benefits of members affected by the withdrawal;

(d) specifying the circumstances when termination of membership in the plan occurs;

(e) specifying how the plan will meet the tests for solvency prescribed in the regulations;

(f) outlining the consequences of a participating union's withdrawal from the plan, in respect of the funding and vesting of the benefits of members affected by the withdrawal; and

(g) setting out a process for selecting those trustees of the plan representing the employer or employers, and those trustees of the plan representing the members of the plan.

13(1)       Subsection 31(2) is amended

(a) by striking out "Subject to subsection (3) and subsection (3.1), where" and substituting "Subject to subsections (3) to (8), where"; and

(b) by striking out "an agreement" in clauses (b) and (c) and substituting "a written agreement".

13(2)       Subsection 31(3.1) is repealed.

13(3)       The following is added after subsection 31(4):

Common-law parties - opting in

31(5)       Subsection (2) does not apply to a pension plan in the case of persons who are parties to a common-law relationship unless the party who is a member of the pension plan makes and executes a written declaration, in the form prescribed therefor in the regulations,

(a) identifying the other party and showing that the other party is his or her common-law spouse within the meaning of the definition of that term in subsection 1(1);

(b) specifying the commencement date of the common-law relationship; and

(c) stating that subsection (2) shall apply to the pension plan.

Married and common-law - opting out

31(6)       Where subsection (2) becomes applicable to a pension plan in the case of either persons who are married to each other or persons who are parties to a common-law relationship, the subsection ceases to be so applicable where both spouses or both parties, as the case may be, after each has received

(a) independent legal advice; and

(b) a statement from the administrator of the pension plan showing the commuted value of the pension benefit credit in the pension plan, or the amount of the payments under the pension plan, to which each would be entitled if the subsection remained applicable;

enter into a written agreement with each other to the effect that the pension benefit credit or the pension payments, as the case may be, shall not be divided between them, and the agreement shall otherwise be in form and content as the minister may by regulation prescribe.

Termination date of common-law relationship

31(7)       For the purposes of this section, a common-law relationship is considered to be terminated on a date specified as the termination date in a written declaration, in the form prescribed therefor in the regulations, or in a written agreement, made and executed or entered into by both parties to the common-law relationship or, where the parties are unable to agree, on a date determined by a court of competent jurisdiction on the application of the parties or either of them.

Filing of declaration or agreement

31(8)       A declaration or agreement under subsection (5), (6) or (7) shall be filed with the administrator of the affected pension plan, but the declaration under subsection (5) is of no force or effect unless it is so filed before the member making the declaration receives any payments under the pension plan.

14          Subsection 35(2) is amended by striking out "registered" and substituting "certified".

15          Section 37 is amended

(a) by repealing clause (e) and substituting the following:

(e) prescribing the conditions under which, upon the termination of an employee's employment, upon the termination of an employee's membership in a pension plan or upon the termination or winding up of a pension plan, pension benefit credits may be held in trust by the administrator, insurer, or trustee of the pension plan, or transferred to the administrator, insurer or trustee of another pension plan or to a registered retirement savings plan or to a life income fund or other arrangement as prescribed in the regulations or to the commission or to the agency designated under section 16;

(b) by repealing clause (v) and substituting the following:

(v) fixing rates of interest for the purposes of this Act;

(c) by adding the following after clause (w):

(x) respecting the administration of and the benefit entitlements under any money purchase plan as described in clause (b) of the definition "pension plan" in subsection 1(1) that has not more than 250 members;

(y) respecting multi-unit pension plans as defined in section 26.1.

Coming into force

16          This Act comes into force on the day it receives royal assent.