Third

Session, 46th General Assembly

Elizabeth II, 2010

BILL 22

AN ACT TO AMEND THE

PORTABILITY OF PENSIONS ACT

Received and Read the First Time ...................................................................................................

Second Reading .................................................................................................................................

Committee ............................................................................................................................................

Third Reading .....................................................................................................................................

Royal Assent ......................................................................................................................................

HONOURABLE THOMAS W. MARSHALL, Q.C .

Minister of Finance and President of Treasury Board

Ordered

to be printed by the Honourable House of Assembly

EXPLANATORY NOTES

This Bill would amend the Portability of Pensions Act to provide

for the transfer of pensionable service between pension plans guaranteed by the

province based on actuarial cost.

For employees who elect to transfer

pensionable service before January 1, 2011, this Bill would provide them with

the option to transfer pensionable service based on actuarial cost or based on

the current arrangements in sections 4 and 6 of the Act.

For employees who elect to transfer

pensionable service on or after January 1, 2011, the Bill would provide for the

transfer based on actuarial cost.

A BILL

AN ACT TO AMEND THE PORTABILITY

OF PENSIONS ACT

Analysis

S.2 Amdt.

Interpretation

S.3 R&S

Portability election

S.3.1 R&S

Re-transfer of service

S.4 Amdt.

Transfer of employee and employer contributions

S.4.1 Added

Transfer on an actuarial basis

S.6.1 Added

Deficiency

Be it enacted by the Lieutenant-Governor and

House of Assembly in Legislative Session convened, as follows:

RSNL1990 cP-17

as amended

1. Paragraph 2(1)(

a) of the Portability of Pensions Act is repealed and the following

substituted:

(a) "actuarial cost" means the cost of

the service to be credited as determined at the date of the election and

calculated with reference to the assumptions from the most recent actuarial

valuation for funding purposes;

(a.1) "pension plan" means a pension plan,

retirement benefit or arrangement

(

i) as constituted under the authority of, or

(ii) as set out in,

an Act listed in the

Schedule or added to

the

Schedule by order; and

Section 3 of the Act is repealed and the

following substituted:

Portability

election

(1) An

employee, covered under a pension plan, who transfers his or her employment to

another body whose pension plan is established under one of the pension plans

may elect to have the pensionable service transferred to that other pension

plan where the employee has not received a termination benefit from the

exporting pension plan.

(2) An employee covered under a pension plan who elects to transfer his or her pensionable service under

subsection (1) before January 1, 2011 may elect to do so under

section 4 or

section 4.1, and on or after that date,

section 4.1 shall apply.

(3) An election made under this

section is

irrevocable.

Section 3.1 of the Act is repealed and the

following substituted:

Re-transfer of

service

3.1

(1) A

person who elected under

section 3 to transfer pensionable service from a

pension plan, other than the plan established under the Members of the House of Assembly Retiring Allowances Act , to the

pension plan established under that Act, who is not eligible to receive a

retiring allowance under that plan, may elect to transfer that pensionable

service back to the pension plan from which it was transferred notwithstanding

that the person is not an employee to whom this Act applies.

(2) Sections 4, 4.1, 6 and 6.1 do not apply to an

election under subsection (1).

(3) Where a person who elected to transfer

pensionable service to the pension plan established under the Members of the House of Assembly Retiring

Allowances Act elects to transfer that pensionable service back under

subsection (1), the amount transferred shall be returned, together with

interest, to the pension plan from which it was transferred, and a deficiency

that was paid by the person shall be returned to the person, together with

interest.

(4) The rate of interest referred to in subsection

(3) shall be,

(

a) with respect to an election that was made

under

section 3 and a transfer of pensionable service under

section 4, the rate

of interest applicable to refunds of the pension plan established under the Members of the House of Assembly Retiring

Allowances Act ; and

(

b) with respect to an election that was made

under

section 3 and a transfer of pensionable service under

section 4.1, the same

rate of interest that was used in the calculation of the actuarial value.

4. Subsection 4(1) of the Act is repealed and the

following substituted:

Transfer of employee

and employer contributions

(1) Upon

an election being made under

section 3 before January 1, 2011, the exporting

pension plan shall pay to the importing pension plan the employee and employer

contributions to the pension plan with respect to the employee together with

interest.

5. The Act is amended by adding immediately after

section 4 the following:

Transfer on an

actuarial basis

4.1 Upon

an election being made under

section 3, the exporting pension plan shall

transfer to the importing pension plan the amount that is the lesser of

(

a) the amount available from the exporting plan,

which is the greater of

(

i) the actuarial cost of benefits in respect of

the service under the exporting plan in accordance with the terms and

conditions of that plan as at the termination date, increased with interest to

the date of payment using the same rate of interest that was used in the

calculation of the actuarial value; and

(ii) the value of the employee's termination

benefits at the date of termination; and

(

b) the actuarial cost of benefits calculated as

at the date of the election to transfer that would be created in the importing

the credited service in the exporting plan.

6. The Act is amended by adding immediately after

section 6 the following:

Deficiency

6.1

(1) Where

the amount transferred under

section 4.1 is insufficient to finance the actuarial

cost of the full period of pensionable service that has been transferred under that

section, the employee may elect

(

a) to pay the amount required to make up the

deficiency; or

(

b) to be credited with the proportionate period

of pensionable service that can be financed by the amount transferred from the

exporting plan.

(2) The amount of a deficiency shall be paid in

the manner directed by the minister.

Earl G. Tucker, Queen's Printer