FEDERAL REG

SOR/2016-64: Regulations Amending Certain Canadian Forces Pension Regulations

REGISTRATION OF FEDERAL REGULATION - VIA OIC DATABASE, PRIOR TO PART II OF THE GAZETTE

Registered
March 29, 2016


REGULATORY IMPACT ANALYSIS STATEMENT (This statement is not part of the Regulations.) Issues These amendments to the Canadian Forces Superannuation Regulations, the Reserve Force Pension Plan Regulations and the Defence Services Pension Continuation Regulations address a number of outstanding issues. They include recommendations received from the Standing Joint Committee for the Scrutiny of Regul... (Click for more)


House

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Senate

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Published on March 29, 2016

Bill Summary

SOR/2016-64: Regulations Amending Certain Canadian Forces Pension Regulations

REGULATORY IMPACT ANALYSIS STATEMENT (This statement is not part of the Regulations.) Issues These amendments to the Canadian Forces Superannuation Regulations, the Reserve Force Pension Plan Regulations and the Defence Services Pension Continuation Regulations address a number of outstanding issues. They include recommendations received from the Standing Joint Committee for the Scrutiny of Regulations, the form and manner of requesting a reconsideration of an administrative decision by the Minister of National Defence, the repayment of any annuity or annual allowance received by a former regular force member while subsequently employed in the reserve force if they elect to count that service upon re-enrollment in the regular force, the need for administrative flexibility related to the transfer of Canadian Armed Forces pension administration to Public Works and Government Services Canada, the date supplementary death benefit coverage for a Class C reserve force member ceases, the modernization of the rules related to the recovery of debit balances, the repeal of various unessential forms and the correction of technical drafting oversights, ambiguities and gender specific language. Background On March 1, 2007, various amendments to the Canadian Forces Superannuation Act and its supporting regulations came into force as part of the Canadian Armed Forces Pension Modernization Project. These amendments modernized the pension arrangements for the regular force by bringing the pension benefits in line with those provided for the federal public service and, for the first time, providing pension coverage for members of the reserve force. Since 2007, a number of minor policy issues requiring amendments have been identified. There is also a need to revise certain regulations to provide administrative flexibility to accommodate the transfer of pension administration to Public Works and Government Services Canada and to respond to concerns raised by the Standing Joint Committee for the Scrutiny of Regulations. Objectives The Regulations a. make legislative amendments to respond to recommendations received from the Standing Joint Committee for the Scrutiny of Regulations; b. include a new regulatory provision setting out the required form and manner to be followed when requesting reconsideration by the Minister of National Defence of a pension decision made under the Canadian Forces Superannuation Act; c. address a number of minor policy issues and deficiencies that have been identified since the new Canadian Armed Forces pension arrangements came into effect on March 1, 2007. These include ensuring equitable treatment when buying back prior reserve service; providing up-to-date mechanisms to recover debit balances in the pay accounts of former members of the Canadian Armed Forces under both military pension plans; and amending the effective date on which a reserve force member ceases to be a participant under the supplementary death benefit scheme; d. establish procedural changes in support of the transfer of pension administration to Public Works and Government Services Canada; and e. correct various technical drafting oversights, wording ambiguities and gender-specific language, delete forms that are not legislatively required and update those that remain. Description and rationale These regulatory amendments include a number of changes necessary to improve the general efficiency and equity of Canadian Armed Forces pension administration. The description and rationale for the amendments follow. (1) The Canadian Armed Forces pension arrangements provide that a person can request that the Minister of National Defence reconsider a decision made under the Canadian Forces Superannuation Act that affects his or her benefits. In accordance with the requirements of the Act, the request must be made in accordance with directions set out in the Regulations. These amendments now set out the proper form and manner of making a request for reconsideration which must be made in writing, signed, dated, and submitted to the Minister, or to the person designated by the Minister. They must include the member’s name and service or pension number and must also set out the facts that form the basis of the request. (2) The Standing Joint Committee for the Scrutiny of Regulations has raised a number of concerns regarding certain provisions made in regulations under the Defence Services Pension Continuation Act and the Canadian Forces Superannuation Act. These regulatory amendments were brought into force in 1994 and in 2007, respectively. They address several language discrepancies and redundancies found in the regulations in question. Two amendments are being made in response to the concerns raised with respect to the Defence Services Pension Continuation Regulations and eight regarding the Canadian Forces Superannuation Regulations. In addition, changes to three provisions of the Reserve Force Pension Plan Regulations are also included as consequential amendments. For example, the French version of paragraph 8.1(2)(a) is amended to include words that were omitted in French, but appear in the English version, and that make reference to “paragraph (1)(a).” To conform with amendments to subsection 3(2) of the Canadian Forces Superannuation Regulations, the words “and each day of any similar service” and “et tout jour de service semblable” are deleted from the English and French versions of subsection 42(2) of the Reserve Force Pension Plan Regulations. (3) The Canadian Forces Superannuation Act and the Canadian Forces Superannuation Regulations permit regular force members, who enroll in the reserve force and subsequently become contributors under Part I of the Canadian Forces Superannuation Act, to buy back their reserve service served while drawing an annuity or annual allowance, but only if they repay all of the annuity or allowance they received during that period. The Act and applicable Regulations, however, do not require the repayment of any annuity or annual allowance received by former regular force members while subsequently employed in the reserve force if they elect to count that service upon reenrollment in the regular force. A regulatory amendment has been made to ensure equitable treatment of members as well as compliance with the Income Tax Act, by ensuring that all members repay their annuity. (4) Pursuant to the Government of Canada’s Transformation of Pension Administration Initiative, Canadian Armed Forces pension administration will be transferred to Public Works and Government Services Canada in 2016–2017 with the goal of providing better services to plan members, retirees and their families. To provide administrative flexibility, references to the exercise of authority by the Minister of National Defence in the Canadian Forces Superannuation Regulations and Reserve Force Pension Plan Regulations are in some cases eliminated and replaced by embodying the applicable rules in the regulations. (5) Various forms set out in the Canadian Forces Superannuation Regulations are repealed as they are now spent or not legislatively required. The remaining forms, including the CFSA 100, 103 and 106, are amended to clarify wording and to better align with the new Canadian Armed Forces pension arrangements that came into effect in 2007. These amendments are housekeeping in nature. (6) A supplementary death benefit is provided under Part II of the Canadian Forces Superannuation Act to qualifying members of the Canadian Armed Forces. It is, in effect, a reducing term life insurance scheme that provides a lump-sum benefit to the beneficiary of active or retired plan participants who die while insured. Coverage is provided for regular force members and for reserve force members on full-time service in a regular force position or supernumerary to the regular force. Under current provisions, coverage for a reserve force participant ends on the day the member’s full-time service ends, despite the requirement that the member pay a premium for the month. These regulatory amendments establish the effective date on which a reserve force member ceases to be a participant as the last day of the month in respect of which he or she were required to contribute. (7) Pursuant to section 89 of the Canadian Forces Superannuation Act, section 27 of the Canadian Forces Superannuation Regulations sets out the manner and extent to which a recovery of a debit balance can be realized from the pay account of a former member of the Canadian Armed Forces. These amendments remove and replace outdated statutory references, include new pension benefits to which the section should apply and remove the reference to “fraud,” as this is not a defined term. Instead, they provide for a rate for recovery if a debt arises from an offence for which the former member has been convicted under the Criminal Code or the National Defence Act. A similar provision allowing for the recovery of a debit balance in the pay account of a former member of the reserve force is being included in the Reserve Force Pension Plan Regulations. (8) Other changes made by these regulations correct technical drafting oversights, clarify wording, address English and French concordance issues, as well as resolve minor policy ambiguities that have become apparent since the implementation of the Canadian Armed Forces Pension Modernization Project. “One-for-One” Rule The “One-for-One” Rule does not apply to this proposal. There is no change in administrative costs, as this proposal does not apply to business. Small business lens The small business lens does not apply to this proposal. There is no change in costs, as this proposal does not apply to small businesses. Implementation, enforcement and service standards There are no increases in the actuarial liability of either of the Canadian Armed Forces pension plans and no change in their current service costs as a result of the amendments, as confirmed by the Office of the Chief Actuary. The normal legislative, regulatory and administrative compliance structures will apply, including internal audits, reports to Parliament and responses to enquiries received from Members of Parliament, affected plan members and their representatives and other interested stakeholders. All amendments come into force on the registration date, except (1) amendments to sections 8.4 and 8.5 of the Canadian Forces Superannuation Regulations (repayment of annuity or annual allowance), enacted by section 9 — come into force on the first day of the third month after the day on which the Regulations are registered; and (2) amendments to paragraph 14.6(3)(b) of the Canadian Forces Superannuation Regulations (top-up election), as enacted by subsection 18(2) and subsection 12(3) of the Reserve Force Pension Plan Regulations (past earnings elections), as enacted by section 60 — are deemed to have come into force on March 1, 2007. Contact Lynne McKenna-Fleming Director Pension and Social Programs National Defence Headquarters Ottawa, Ontario K1A 0K2 Telephone: 613-996-3700 Footnote a S.C. 2003, c. 26, s. 2 Footnote b S.C. 2003, c. 26, s. 14 Footnote c S.C. 2012, c. 31, s. 472 Footnote d S.C. 2003, c. 26, s. 41(1) Footnote e S.C. 1999, c. 34, ss. 161(2) and (3) Footnote f S.C. 1999, c. 34, s. 167 Footnote g S.C. 2003, c. 26, s. 36 Footnote h R.S., c. C-17 Footnote i S.C. 2000, c. 12, s. 97 Footnote j R.S.C. 1970, c. D-3 Footnote 1 C.R.C., c. 396 Footnote 2 SOR/2007-32 Footnote 3 C.R.C., c. 554

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