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The Civil Service Superannuation Amendment Act

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S.M. 2020, c. 16

Bill 43, 3rd Session, 42nd Legislature

The Civil Service Superannuation Amendment Act

Explanatory Note

This note is a reader's aid and is not part of the law.

This Act makes a number of changes to The Civil Service Superannuation Act. Commuted value

The manner of determining the commuted value of a pension is changed from the solvency method to the going concern method published by the Canadian Institute of Actuaries.

Restrictions are placed on a former employee's ability to pay back withdrawn or transferred pension amounts for the purpose of pension entitlement.

Pension deferral

An election to defer a pension can now be made until November 30 of the year a person turns 71, the maximum allowed under the Income Tax Act (Canada). Employee representatives

The Superannuation and Insurance Liaison Committee now directly appoints the employee representatives on the Civil Service Superannuation Board. Application for pension and election of pension option

The rules for applying for a pension and electing a pension option are changed as follows.

  • The Canada Pension Plan (CPP) integration option is now based on CPP payments at age 60, not 65.
  • If a member does not elect a pension option, the default option applies. Currently, the default option applies only when there is no election due to ill health or death.
  • The person's marital or common-law relationship status is now determined at the pension start date, not the date the pension is applied for.
  • Application time lines are clarified and redundant notice requirements are repealed.
Purchase of service

Currently, employees can pay into the pension fund to accrue additional benefits ("purchase service") under limited circumstances. The amendments

  • extend the deadline to purchase service for employees on maternity or parental leave;
  • clarify the entitlement to purchase service for prior employment;
  • base entitlement on a partial purchase if an employee retires or dies before the full purchase is made;
  • clarify service accrual during a leave of absence with partial pay; and
  • clarify the effective date when an application is submitted more than 30 days after it has been signed.
Annuity to estate

When a member dies, a spouse or other person may receive an annuity. When that person dies, the remaining annuity is now payable to their estate rather than to the member's estate, which may already have been wound up. Miscellaneous amendments

If there is a conflict between The Provincial Court Act and The Civil Service Superannuation Act as those Acts relate to the pensions of provincial judges, The Provincial Court Act applies.

Currently, a member who has contributed more than 50% of the commuted value of their pension may receive the excess by way of refund or transfer to a money purchase account. The amendments clarify that the member cannot later repay the amount refunded or withdrawn from the money purchase account.

The Civil Service Superannuation Board may now establish position classifications for its own employees. Such classifications are no longer linked to The Civil Service Act.

Under the current Act, the Civil Service Superannuation Board may provide additional pensions to members who receive long term disability benefits under an employer's program. These provisions are extended to apply to employees of a service provider who provides land registry services.

Other amendments remove unnecessary historical references and simplify wording.

(Assented to October 14, 2020)

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

C.C.S.M. c. C120 amended

1

The Civil Service Superannuation Act is amended by this Act.

2(1)

Subsection 1(1) is amended

(a) by replacing the definitions "Canada pensionable earnings" and "commuted value" with the following:

"Canada pensionable earnings" means for each calendar year after 1965 in which an employee has service, the salary of the employee for that year, or the maximum pensionable earnings for that year as determined under the Canada Pension Plan, whichever is the lesser; (« gains admissibles au Régime de pensions du Canada »)

"commuted value" means the present value of an accrued future benefit provided under this Act determined in accordance with subsection 1(8); (« valeur commuée »)

(b) in the definition "deferred member", by striking out everything after "not yet commenced".

2(2)

The following is added after subsection 1(7):

Determination of commuted value

1(8)

Despite The Pension Benefits Act, any commuted value must be determined by the board's actuary using the going concern valuation method set out in subsection 3570 of the Practice-Specific Standards for Pension Plans, as amended from time to time, published by the Actuarial Standards Board of the Canadian Institute of Actuaries.

3

The following is added after section 1:

Judicial compensation requirements prevail

1.1

Except for the requirement to administer this Act in accordance with the Income Tax Act (Canada), if a requirement of this Act or the regulations conflicts with a requirement under section 11.1 of The Provincial Court Act to implement the recommendation of a Judicial Compensation Committee, the requirement of that Act prevails to the extent of the inconsistency.

4(1)

Subsection 2(5) is amended

(a) by adding "calendar" after "two consecutive";

(b) by striking out "December 31, 1983," and substituting "1983"; and

(c) in the English version,

(i) by striking out "in the seasonal" and substituting "in seasonal",

(ii) by striking out "numerical" wherever it occurs, and

(iii) by striking out "his" and substituting "their".

4(2)

Subsection 2(7) is amended

(a) in the description of T in the formula, by striking out "numerical" wherever it occurs and substituting "calendar"; and

(b) in the English version of the descriptions of H and U in the formula, by striking out "numerical" wherever it occurs and substituting "calendar".

4(3)

Subsections 2(9) to (11) and (13) are repealed.

5

Section 4 is replaced with the following:

Crown bound

4

This Act binds the Crown.

6

Subsection 5(5) is replaced with the following:

Appointment of employee representatives

5(5)

The Liaison Committee as defined in section 10.1 must appoint four members to the board to represent employees or groups of employees (referred to in this section as "employee representatives").

Representation of pensioners and Manitoba Hydro employees

5(5.1)

Of the four employee representatives,

(a) one person must be a former employee receiving a pension; and

(b) one person, who may be the same person qualifying for appointment under clause (a), must represent the interests of the employees and former employees of Manitoba Hydro.

Term of employee representative

5(5.2)

An employee representative must be appointed for a term of no more than four years, and no employee representative may serve more than ten consecutive years.

Terms to be staggered

5(5.3)

When appointing an employee representative and establishing the person's term, the Liaison Committee is to have regard for the need to ensure that the terms of no more than two employee representatives expire in the same year.

Appointment continues

5(5.4)

An employee representative continues to hold office until the Liaison Committee re-appoints the person, revokes the appointment or appoints a successor.

7(1)

Subsection 6(1.3) is replaced with the following:

Compensation

6(1.3)

The board may determine the compensation for persons it employs under subsection (1.2) and may establish job classifications for that purpose.

7(2)

Subsection 6(4.1) is amended by striking out "matching" and substituting "pre-funding".

7(3)

Subsection 6(5) is amended by replacing everything before clause (a) with the following:

Contributions to fund by pre-funding employers

6(5)

In each period during which an employee contributes to the fund by way of a deduction from salary, wages or other remuneration, the employer must contribute to the fund the amount determined under subsection (5.2) if

7(4)

Clause 6(5)(b) is amended by striking out "matching" and substituting "pre-funding".

7(5)

Subsection 6(5.1) is amended

(a) by striking out "matching" wherever it occurs and substituting "pre-funding"; and

(b) by striking out "or 23(2)".

7(6)

Subsection 6(5.2) is replaced with the following:

Pre-funding amount

6(5.2)

For the purpose of subsection (5), the amount the employer must contribute in respect of an employee for a period is the amount of the employee's contribution for the period less 0.9% of the employee's Canada pensionable earnings for the period.

7(7)

Subsections 6(5.3) and (5.4) are amended by striking out "matching" wherever it occurs and substituting "pre-funding".

7(8)

Subsection 6(6) is amended by striking out "The Civil Service Superannuation Board" and substituting "the board".

7(9)

Subsection 6(8) is repealed.

8

Subsection 9(3) and section 19 are repealed.

9(1)

Subsection 20.1(1) is amended in the section heading by adding "other" before "service".

9(2)

Clause 20.1(2)(c) is amended by striking out everything after "purchased," and substituting "effective as of the date the application is signed by the employee or, if the application is received by the board more than 30 days after it was signed by the employee, effective as of the date the application is received by the board.".

10

Subsection 21(5) of the English version is amended in the section heading by striking out "gov" and substituting "government".

11

Section 21.1 is replaced with the following:

Maternity leave and parental leave

21.1(1)

An employee granted maternity leave or parental leave in accordance with The Civil Service Act or the policies of an agency of the government may elect to continue to contribute to the fund during the leave, or to retroactively make contributions after the leave.

Amount of contribution

21.1(2)

The amount to be contributed in respect of each pay period during which the employee is on leave is

(a) in the case of maternity leave, the same amount the employee would have to contribute if their salary during the leave were equal to their salary at the commencement of the leave; or

(b) in the case of parental leave, twice the amount the employee would have to contribute if their salary during the leave were equal to their salary at the commencement of the leave.

How to make payment

21.1(3)

Contributions to the fund during or in respect of a period of maternity leave or parental leave must be made in the manner determined by the board, which may be

(a) by instalments during the leave;

(b) by lump sum at the end of the leave; or

(c) by instalments after the leave.

A person who makes contributions by instalments after the leave must pay interest on the instalments.

Timing for election to contribute

21.1(4)

An employee who elects to make contributions to the fund retroactively after a maternity leave or parental leave must make the election no later than 30 days after the end of the leave.

Continuous absence

21.1(5)

If a period of maternity leave is immediately followed by a period of parental leave, an election under subsection (1) must be made no later than 30 days after the end of the parental leave.

12

Subsections 21.2(3) and (4) are repealed.

13

Sections 21.5 and 21.6 are replaced with the following:

Only current employees eligible to purchase service

21.5

Only a person who is still an employee may purchase a period of service under this Act.

No cost to employer

21.6

Neither the government nor any agency of the government is required to contribute any amount to the fund in respect of

(a) a purchase of service under section 21.1 in respect of parental leave; or

(b) a purchase of service under section 21.2 or 21.3.

14(1)

Subsection 22(3) is repealed.

14(2)

Subsection 22(4) is amended by striking out "(3),".

14(3)

Subsection 22(6) is amended by striking out "subsection 37(2) and section 63 or either of those provisions" and substituting "section 63".

14(4)

Subsection 22(7) of the English version is amended, in the part before clause (a), by striking out "Manitoba Employer" and substituting "Manitoba employer".

14(5)

Subsection 22(11) is amended by striking out "matching" wherever it occurs and substituting "pre-funding".

15

Section 23 is repealed.

16(1)

Subsection 26(1.2) is repealed.

16(2)

Subsection 26(1.3) is amended by striking out "matching" and substituting "pre-funding".

17(1)

Subsection 28(1) is replaced with the following:

Eligibility for superannuation allowance

28(1)

Except as otherwise provided in this Act and subsection 21(9.1) of The Pension Benefits Act (value of pension after late retirement), the board must grant an annual superannuation allowance calculated in accordance with section 26 to the following persons:

(a) a person who

(i) ceases to be an employee on or after reaching the age of 55 years,

(ii) at the time of ceasing to be an employee, is not receiving an allowance granted under clause (d), and

(iii) applies to the board for the allowance within 185 days before ceasing to be an employee or within 30 days after ceasing to be an employee;

(b) a deferred member who

(i) has reached the age of 55 years, and

(ii) applies to the board for an allowance within 185 days before the commencement date proposed in the application;

(c) a correctional officer who

(i) ceases to be an employee on or after reaching the age of 50 years and whose age and service total at least 75 years,

(ii) became a correctional officer before 2001 or made additional contributions under section 17.1 for at least five years,

(iii) did not receive and is not entitled to receive a refund of contributions under subsection 17.1(6), and

(iv) applies to the board for an allowance within 185 days before ceasing to be an employee or within 30 days after ceasing to be an employee;

(d) a person with at least 10 years of service who

(i) has not been granted an allowance under clause (a), (b) or (c),

(ii) has not reached the age of 60 years,

(iii) has not reached the age of 55 years or, having reached that age, has not reached the age at which their age and service total 80 years, and

(iv) applies to the board for an allowance and satisfies the board that they

(A) have a qualifying disability as defined in section 31, and

(B) are entitled to long term disability benefits or will no longer be an employee on the commencement date;

(e) a person who remains an employee after November 30 of the year in which the person reaches the maximum retirement age.

Application

28(1.1)

An application under this section must be in a form acceptable to the board and must specify the date on which the applicant proposes the superannuation allowance to commence.

17(2)

Subsection 28(3) is replaced with the following:

Commencement of allowance

28(3)

The commencement date for a person's superannuation allowance is

(a) in the case of an allowance granted under clause (1)(a) or (c), the later of

(i) the commencement date proposed in the person's application for the allowance,

(ii) the date on which the person becomes entitled to the allowance, or

(iii) if the completed application is received by the board more than 30 days after the person ceases to be an employee, the date that it is received by the board;

(b) in the case of an allowance granted under clause (1)(b), the commencement date proposed in the person's application for the allowance, or the date that the completed application is received by the board, whichever occurs last;

(c) in the case of an allowance granted under clause (1)(d),

(i) if it is granted to an employee who is entitled to long term disability benefits, the effective date for the commencement of those long term disability benefits or the day that the employee's sick leave benefits expire, whichever occurs first, and

(ii) in any other case, the day the person's completed application is received by the board or the person ceases to be an employee, whichever occurs last; and

(d) in the case of an allowance granted under clause (1)(e), December 1 of the year in which the person reaches the maximum retirement age.

18(1)

Subsection 29(1) is amended, in the part before clause (a), by striking out "section 30" and substituting "sections 29.1 and 30".

18(2)

Clause 29(2)(c) is amended by striking out everything after "commencement date for the allowance".

18(3)

Subsection 29(3) is amended

(a) in clause (a), in the part before subclause (i), by striking out "by the amount of the net accrued liability to the fund"; and

(b) in clause (b), by striking out everything after "allowance" and substituting "as of the commencement date.".

18(4)

Subsection 29(5) is amended by striking out everything after "payments become payable" and substituting "to the recipient's estate.".

18(5)

Subsection 29(6) is replaced with the following:

Lump sum

29(6)

On the application of a person entitled to receive annuity payments under subsection (4) or (5) as a result of the death of a member or recipient, the board may pay the applicant a lump sum equal to the commuted value of the remaining annuity payments, plus interest to the date of payment. The commuted value is to be determined as of the first day of the month following the month in which the death occurred.

18(6)

Subsection 29(10) is replaced with the following:

References to "spouse or common-law partner"

29(10)

In this section, "spouse or common-law partner" of a member means the individual who is the member's spouse or common-law partner on the commencement date of the member's annuity.

19(1)

Section 29.1 is amended by replacing the part before clause (a) with the following:

Default if no election made

29.1

A member who does not provide the notice required under subsection 29(2) within the time required is deemed to have elected

19(2)

Section 29.1 is further amended in clause (a) by striking out "at the end of that period" and substituting "on the commencement date of the annuity".

20

Subclause 29.2(2)(a)(ii) is replaced with the following:

(ii) the actuarial value, as at that date, of the monthly CPP pension that would become payable to the member if

(A) the CPP pension were commenced when the member reached the age of 60,

(B) the CPP pension were based only on the member's service under this Act, and

(C) no changes were made to the Canada Pension Plan;

21(1)

Subsections 35(1.1) to (4) are repealed.

21(2)

Subsection 35(5) is replaced with the following:

Determining length of service

35(5)

An employee's length of service must be computed for the purposes of this Act from the date on which the employee first contributed to the fund.

21(3)

Subsection 35(6) is repealed.

21(4)

Subsection 35(7) is replaced with the following:

Leave of absence without pay

35(7)

Subject to sections 21 and 21.1, any period of leave of absence without salary granted to an employee or any period of suspension of an employee without pay must not be included in computing the employee's length of service for the purposes of this Act.

21(5)

Subsection 35(9) is replaced with the following:

Leave of absence with partial pay

35(9)

Unless section 21 applies, if an employee is granted a leave of absence with a portion of their salary during the leave payable directly or indirectly by the government,

(a) the employee must be deemed to continue as an employee during the leave for the purposes of this Act;

(b) the employee must contribute to the fund during the leave, but only in respect of that portion of their salary paid directly or indirectly by the government; and

(c) the employee continues to accumulate service for the purposes of this Act, but the accumulated service, at any time during the leave, must be determined in accordance with the following formula:

A = B × C/D

In this formula,

A

is the length of service that has accumulated during the leave;

B

is the elapsed period of the leave;

C

is the salary received by the employee during the elapsed period of the leave paid directly or indirectly by the government; and

D

is the total salary the employee would have received during the elapsed period of the leave, paid directly or indirectly by the government, if the employee had not been on leave and instead had continued in their regular employment.

22

Section 36 is replaced with the following:

Continuity of service

36

Subject to section 20 and subsection 31(10), if an employee leaves the civil service and subsequently re-enters the civil service, the person must be treated as a new employee and any former service must not be considered in computing the employee's length of service for the purposes of this Act.

23

Section 37 is repealed.

24

Section 41 is amended, in the part after clause (d), by striking out "out of the fund in the manner and to the persons specified in section 50" and substituting "to the deceased's estate".

25(1)

Subsection 42(1) is amended, in the part before clause (a), by striking out "normal retirement age" and substituting "maximum retirement age".

25(2)

Subsection 42(2) is amended, in the part before clause (a), by striking out "A former employee" and substituting "Subject to subsection (2.1), a former employee".

25(3)

The following is added after subsection 42(2):

No repayment

42(2.1)

Subject to subsection 20(2) (return to civil service within three years), a former employee who has withdrawn or transferred an amount under subsection (2) is not entitled to repay the amount into the fund.

Reciprocal transfer not considered repayment

42(2.2)

A transfer into the fund from another pension plan under the terms of a reciprocal transfer agreement does not constitute a repayment for the purpose of subsection (2.1).

26(1)

Subsection 43(1) of the English version is amended, in the part before clause (a), by striking out "of service," and substituting "of service".

26(2)

The following is added after subsection 43(2):

Transferred amount may not be repaid

43(3)

No person is entitled to

(a) repay to a money purchase account an amount transferred to the account under clause (1)(a) — or any portion of such an amount — that has been withdrawn from the money purchase account under subsection 64(5); or

(b) repay to the fund an amount that has been refunded or transferred under clause (1)(b).

However, this subsection does not apply to an amount to which subsection 20(2) applies.

27

Paragraph 45(5)(b)(i)(C) is amended by striking out "to (8)" and substituting "and (6) and subsections 28.1(1) to (3)".

28

Section 49 is amended in the section heading by striking out "incompetent" and substituting "incapable".

29

Section 50 is replaced with the following:

Interest on payments

50

If an amount is payable under section 41 or subsection 45(5), the board must pay interest on the amount from the date of death to the date of payment.

30

Subsection 53.1(7) of the English version is amended by striking out "matching" and substituting "pre-funding".

31(1)

Subsection 63(1) is repealed.

31(2)

Subsection 63(2) is replaced with the following:

Application to include prior employment

63(2)

An employee who was employed with the government, an agency of the government or other employer to whom this Act applies before the date established by the board's records may apply to the board to have the prior employment included in their service for the purposes of this Act, but only if

(a) the prior employment was full-time continuous employment to the date the person began contributing to the fund;

(b) the employment of the person since the date they began contributing to the fund has been continuous employment to the date the application is made; and

(c) for each position, class or category of prior employment included in the application, the employee would be required, or could elect, to contribute to the fund if they were in a similar position, class or category at the time the application is made.

31(3)

Subsections 63(2.1) and (2.2) are repealed.

31(4)

Subsection 63(3) is replaced with the following:

When board must grant application

63(3)

The board must grant an application under subsection (2) if

(a) the employer to whom the application relates verifies, in accordance with the regulations,

(i) that during the period of the prior employment, the employee was prevented from accumulating service under this Act, and the reason they were prevented from accumulating service, and

(ii) that a person employed in the same or a similar position, class or category at the time the application is made would be required, or could elect, to contribute to the fund; and

(b) the employee agrees in writing to pay to the fund — in a lump sum or by such instalments as may be prescribed in the regulations made under this section — the amount determined in accordance with the following formula:

A = B × C × D

In this formula,

A

is the amount payable to the board;

B

is the contribution rate applicable under clause 17(1)(b) to earnings in excess of Canada pensionable earnings;

C

is the employee's annual salary rate as of the date of the application; and

D

is the number of years of employment included in the application, including parts of years expressed in decimals.

Date of application

63(3.1)

An application under this section is deemed to be made on the date the application is signed by the employee or, if the application is received by the board more than 30 days after it was signed by the employee, on the date the application is received by the board.

31(5)

Subsection 63(4) is amended

(a) in the English version,

(i) by striking out "him" wherever it occurs and substituting "them", and

(ii) by striking out "his service" and substituting "their service"; and

(b) by striking out everything after "at retirement".

31(6)

Subsection 63(5) is repealed.

31(7)

Subsection 63(6) is amended

(a) in the English version,

(i) by striking out "him" wherever it occurs and substituting "them", and

(ii) by striking out "his" wherever it occurs and substituting "their"; and

(b) by striking out everything after "date of death".

31(8)

Subsections 63(7), (9) and (10) are repealed.

32

Section 66 and subsections 66.1(4) and (5) are repealed.

33(1)

Subsection 69(1) is replaced with the following:

Definitions

69(1)

The following definitions apply in this section.

"disability superannuation allowance" means a superannuation allowance granted under clause 28(1)(d). (« allocation de retraite pour invalidité »)

"long term disability benefit" means a benefit payable to a person under a program. (« prestations d'invalidité à long terme »)

"program" means a program for long term disability benefits — other than a disability superannuation allowance — provided, under a contract of insurance or otherwise, by one of the following for its employees:

(a) the government;

(b) an agency of the government;

(c) a service provider. (« programme »)

"service provider" means a service provider as defined in The Real Property Act whose employees are deemed to be in the civil service for the purpose of this Act. (« fournisseur de services »)

33(2)

Clause 69(2)(a) is amended

(a) in subclause (i), by striking out ", under a program";

(b) in subclause (ii), by striking out "under the program"; and

(c) in subclause (iii), by striking out "under this Act".

33(3)

Subsection 69(3) is amended

(a) by striking out "the person pursuant to the regulations made under subsection (2), the government, or the agency of the government" and substituting "a person in accordance with the regulations made under subsection (2), the government, agency of the government or service provider"; and

(b) in the English version, by striking out "his" and substituting "their".

33(4)

Subsection 69(4) is amended

(a) in clause (a) of the English version, by striking out "attaining" and substituting "obtaining"; and

(b) in clause (b), by striking out "superannuation allowance under clause 28(1)(d)" and substituting "disability superannuation allowance".

33(5)

Subsection 69(5) is amended

(a) by striking out "under the program"; and

(b) by striking out "and subsections".

Transitional — employee representatives

34

Despite subsections 5(5) to (5.4) of The Civil Service Superannuation Act, as enacted by section 6 of this Act, a member of The Civil Service Superannuation Board who was elected to represent employees or groups of employees, and who holds office on the day before this Act comes into force, continues to hold office until the member's term expires or the member resigns.

Transitional — determination of commuted value

35(1)

For the purpose of

(a) the determination of a lump sum to be paid in accordance with subsection 29(6), if the effective date of the determination is before the day this Act comes into force;

(b) the determination of A in the formula set out in subsection 33(9), if the person retired before the day this Act comes into force;

(c) the determination of a pension benefit credit in accordance with subsection 42(3) for the purpose of a withdrawal or transfer, if

(i) the withdrawal or transfer request is made before the day this Act comes into force, or

(ii) the member ceased to be an employee before the day this Act comes into force and the withdrawal or transfer request is made within the deadline set out in subclause 42(2)(a)(i);

(d) the determination of an amount to be transferred or refunded in accordance with subsection 43(1), if

(i) in the case of the commencement of a superannuation allowance, optional annuity or pension, the commencement date is before the day this Act comes into force, or

(ii) in the case of an application to transfer a deferred pension, the person entitled to the transfer or refund ceased to be an employee before the day this Act comes into force;

(e) the determination of the amount by which a superannuation allowance, annuity or pension must be reduced under subsection 44(3), if the member and the member's spouse or common-law partner began to live separate and apart by reason of a breakdown of their relationship before the day this Act comes into force; and

(f) the determination of a death benefit under subsection 45(2), or of an amount to be transferred under subsection 45(4), if the benefit arises from the death of a member who died before the day this Act comes into force;

the commuted value is the commuted value as defined in subsection 1(1) of The Civil Service Superannuation Act as that Act read immediately before the coming into force of this section.

Application

35(2)

For certainty, the definition "commuted value" and subsection 1(8), as enacted by subsections 2(1) and 2(2) of this Act respectively, do not apply to a determination made in accordance with subsection (1).

Coming into force

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