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The Teachers' Pensions Amendment Act

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S.M. 2008, c. 38

Bill 45, 2nd Session, 39th Legislature

The Teachers' Pensions Amendment Act

(Assented to September 15, 2008)

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

C.C.S.M. c. T20 amended

1           The Teachers' Pensions Act is amended by this Act.

2           Subsection 1(1) is amended

(a) in the English version, by repealing the definition "chairman" and adding the following definition:

"chair" means the chair of the board; (« président »)

(b) in the definition "normal retirement age", by striking out "69" and substituting "71";

(c) by repealing the definition "teaching month";

(d) by adding the following definition:

"teaching year" in relation to a teacher, means the number of days in the period from August 1 to July 31 of the following year that a person employed full-time in the teacher's position would be required to work; (« année d'enseignement »)

(e) by replacing the definition "year of service" with the following:

"year of service" means, subject to sections 59, 60, 62 and 63, service as a teacher for one teaching year. (« année de service »)

3(1)        Section 6 is amended by adding "not less than" before "three decimal places" in the following provisions:

(a) the descriptions of E, F, G and H in the formula in subsection (1);

(b) the descriptions of E and F in the formula in subsection (7).

3(2)        Subsection 6(3) is amended in the part before clause (a) by striking out "age 69" and substituting "the normal retirement age".

3(3)        Clause 6(4)(b) is amended by striking out "age 69" and substituting "the normal retirement age".

4(1)        Subsection 10(7) is amended

(a) in the part before the formula, by striking out "Subject to subsection (8), the" and substituting "Notwithstanding section 3 and any other provision of The Pension Benefits Act, the"; and

(b) by replacing the description of I in the formula with the following:

I

is the percentage (rounded to the nearest two decimal places) determined by clause (a) or (b), whichever is less:

(a) the greater of 0% and the maximum percentage that, if used to determine the monthly pension adjustments under this section for the year, would, in the actuary's opinion, result in no unfunded liability in the pension adjustment account as at December 31 of the immediately preceding year,

(b) the following percentage:

(i) for 2008 and each of the next nine years, either 5.33%, or 2/3 of the percentage increase in the consumer price index for Canada on December 31 of the immediately preceding year over the consumer price index for Canada on December 31 of the next preceding year, whichever is less,

(ii) for 2018 and each year after that, the percentage increase in the consumer price index for Canada on December 31 of the immediately preceding year over the consumer price index for Canada on December 31 of the next preceding year;

4(2)        Subsection 10(8) is repealed.

5(1)        Clause 26(1)(e) is amended by striking out "section 8" and substituting "subsection (9)".

5(2)        Clause 26(7)(c) is amended by striking out "10 teaching months" and substituting "one teaching year".

6           Section 28 is amended

(a) by replacing the section heading with "Commutation of small pension"; and

(b) by adding "subsection 21(4) of" after "in accordance with".

7(1)        Subsection 41(6) is replaced with the following:

Term of office

41(6)       In the order appointing a person to the board, the Lieutenant Governor in Council must fix the person's term of office.

Chair and vice-chair

41(6.1)     The Lieutenant Governor in Council must appoint one of the members of the board as chair and one as vice-chair.

7(2)        Subsection 41(9) of the English version is amended by striking out "chairman" and substituting "chair".

8           Clauses 42(1)(a) and 44(1)(e) of the English version are amended by striking out "chairman" wherever it occurs and substituting "chair".

9(1)        Subsection 49(2) is amended

(a) in the section heading of the English version, by striking out "Teachers" and substituting "Teacher";

(b) by striking out "regular" wherever it occurs; and

(c) by adding "(other than contributions referred to in section 39)" before "and that percentage".

9(2)        Subsections 49(4) to (6) are replaced with the following:

Interest on pension adjustment account

49(4)       On December 31 in each year, interest at a rate determined in accordance with subsection (5) shall be credited to the pension adjustment account for the year, based on the average of the opening monthly balances in the account in that year.

Rate of return

49(5)       Notwithstanding section 3 and any other provision of The Pension Benefits Act, the annual rate at which interest is to be credited to the pension adjustment account is as follows:

(a) for 2007 and each of the next nine years, the rate is to be the average of the annual rates of return for the year and the immediately preceding two years, with the annual rate of return for each of those years being the greater of

(i) the fund's rate of return for the year, as determined by the board, on its investments in bonds, debentures, mortgages and similar instruments, and

(ii) the fund's rate of return for the year, as determined by the board, on all its investments;

(b) for 2017 and each year after that, the rate is to be the average of the fund's annual rates of return on all its investments, as determined by the board, for the year and the immediately preceding two years.

Restrictions on use of surplus

49(6)       If the pension adjustment under subsection 10(7) in any year is calculated using the percentage determined under subclause (b)(i) in the description of I in the formula in that subsection, the amount, if any, remaining in the pension adjustment account after making the adjustment, as determined by the actuary,

(a) must, notwithstanding section 3 and any other provision of The Pension Benefits Act, be excluded in determining any future pension adjustments to be made under subsection 10(7) before 2018; and

(b) may be used only for determining pension adjustments to be made under subsection 10(7) after 2017.

Interest on surplus may be used

49(6.1)     Any interest earned in the pension adjustment account, including interest earned on amounts determined under subsection (6), may be included in determining monthly pension adjustments under subsection 10(7).

Regulations re surplus

49(6.2)     The board may, with the approval of the Lieutenant Governor in Council, make regulations for the purpose of clause (6)(b) respecting the determination of pension adjustments to be made after 2017 using amounts excluded by clause (6)(a) from the determination of pension adjustments to be made before 2018.

10(1)       Subsection 52(1) is replaced with the following:

Teacher contributions

52(1)       Every teacher must contribute to the fund in each year, by way of deductions from his or her salary,

(a) the percentage prescribed by regulation — or 6.8% if no percentage is prescribed for the purpose of this clause — of his or her Canada pensionable earnings for the year; and

(b) the percentage prescribed by regulation — or 8.4% if no percentage is prescribed for the purpose of this clause — of his or her pensionable salary for the year in excess of his or her Canada pensionable earnings for the year;

and, subject to subsection (1.1), may make additional contributions in the same manner.

"Pensionable salary" defined

52(1.0.1)   For the purpose of this section, "pensionable salary" for a year means salary not exceeding the maximum salary for which a defined benefit can be accrued under a registered pension plan under the Income Tax Act (Canada) for that year.

Refund of contributions

52(1.0.2)   A teacher or former teacher who made contributions for a year before 2009 in respect of salary above his or her pensionable salary for the year is entitled to a refund of those contributions, together with interest at the average rate of return of the fund as determined by the board.

Contribution rates may be prescribed

52(1.0.3)   On the recommendation of the Teachers' Pension Task Force (a body comprising representatives of the government and the society) supported by a majority of the government's representatives and a majority of the society's representatives on that body, the Lieutenant Governor in Council may make regulations

(a) prescribing a percentage for the purpose of clause (1)(a);

(b) prescribing a percentage for the purpose of clause (1)(b).

10(2)       Subsection 52(1.1) is replaced with the following:

Contributions limited

52(1.1)     A teacher's total contributions under subsection (1) for a year must not exceed the maximum current service contributions that can be made under the Income Tax Act (Canada) and the regulations under that Act in respect of a defined benefit provision of a registered pension plan.

10(3)       Subsections 52(1.2) and (1.3) are repealed.

11          Section 58 is amended by striking out "subsections 47(3) and (5) or either of those subsections" and substituting "one or more of subsections 47(3), (5) and (6)".

12          Section 59 is replaced with the following:

Fractional year of service

59(1)       A teacher who is employed for less than a full teaching year must be credited with a fractional year of service,

(a) the numerator of which is the number of days the teacher is credited with service in the teaching year; and

(b) the denominator of which is the number of days in the teaching year.

Computing years of service

59(2)       The service to be included in calculating a teacher's pension under subsection 6(1) is the total of the teacher's

(a) full years of service; and

(b) fractional years of service.

Maximum service in a year

59(3)       Despite subsections (1) and (2) and the definition "year of service" in subsection 1(1), no teacher may be credited with more than one year of service for any period from August 1 of one year to July 31 of the next year.

13          Subsection 64(7) is amended by striking out "subsection 36(15)" and substituting "subsection 41(15)".

14          Subsection 65(1) is replaced with the following:

Eligible employees

65(1)       A person who

(a) at the time of being hired as an employee of the society, the association or a school district, held a certificate granted by the minister authorizing him or her to teach in public schools in the province; and

(b) has been designated under this section as an eligible employee for the purposes of this Act;

is an eligible employee until he or she ceases to be an employee referred to in clause (a) or to hold a certificate referred to in that clause.

Designation as eligible employee

65(1.1)     At the request of an employer, the minister may designate an employee referred to in clause (1)(a) as an eligible employee.  If requested by the employer, the designation may be made effective retroactively to the date the employee was hired.

15          Section 66 is replaced with the following:

Eligible employee entitled to pension

66(1)       Subject to subsection (2), a person who is or has been an eligible employee is entitled to a pension or other allowance under this Act as if he or she were employed as teacher — and earned his or her salary as a teacher — throughout the period of his or her employment as an eligible employee.

Reduction for annuity

66(2)       If a person entitled to a pension or other allowance under subsection (1) is also entitled to an annuity under the Government Annuities Act (Canada), and amounts contributed toward that annuity were deducted from the person's contribution otherwise payable under subsection 65(2), the pension or other allowance must be reduced by the amount of the annual payment that could have been made under an annuity that could have been purchased with the amounts so deducted.

Coming into force

16(1)       This Act, except subsections 10(1) and (3), comes into force on the day it receives royal assent.

Coming into force: subsection 10(1)

16(2)       Subsection 10(1) comes into force on January 1, 2009.

Coming into force: subsection 10(3)

16(3)       Subsection 10(3) is deemed to have come into force on June 10, 2004.