FEDERAL REG

SOR/2016-76: Former Members of Parliament Counting of Service Regulations

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

Registered
April 15, 2016


REGULATORY IMPACT ANALYSIS STATEMENT (This statement is not part of the Regulations.) Issues The Counting of Service by Former Members of the Senate or House of Commons Regulations, No. 2 set out the conditions under which a member of the Royal Canadian Mounted Police Pension Plan (the Plan) may elect to count prior service as a former member of the House of Commons or a former Senator as pension... (Click for more)


House

1st Reading 2nd Reading 3rd Reading

Senate

1st Reading 2nd Reading 3rd Reading

Published on April 15, 2016

Bill Summary

SOR/2016-76: Former Members of Parliament Counting of Service Regulations

REGULATORY IMPACT ANALYSIS STATEMENT (This statement is not part of the Regulations.) Issues The Counting of Service by Former Members of the Senate or House of Commons Regulations, No. 2 set out the conditions under which a member of the Royal Canadian Mounted Police Pension Plan (the Plan) may elect to count prior service as a former member of the House of Commons or a former Senator as pensionable under the Plan. The Standing Joint Committee for the Scrutiny of Regulations (the Committee) noted that the Counting of Service by Former Members of the Senate or House of Commons Regulations, No. 2 lacked detail regarding medical examinations required, in certain circumstances, by members of the Royal Canadian Mounted Police who elect to buy back prior parliamentary service. Information was needed about the time period for undergoing the medical examination, the choice of physician and the criteria for passing the examination. The Counting of Service by Former Members of the Senate or House of Commons Regulations, No. 2 also lacked detail regarding the terms of payment for the election to buy back parliamentary service and contained numerous outdated references to the Members of Parliament Retiring Allowances Act. Objectives Given the extensive amendments that would be required to update the Counting of Service by Former Members of the Senate or House of Commons Regulations, No. 2 and to address the concerns of the Committee, they are repealed and replaced by the Former Members of Parliament Counting of Service Regulations. The Former Members of Parliament Counting of Service Regulations (the new Regulations) provide detail regarding the medical examination that must be undergone, in certain circumstances, by members of the Royal Canadian Mounted Police when they elect to buy back prior parliamentary service. The new Regulations set out the time limit for undergoing the medical examination, the choice of physician and the criteria for passing the examination. The new Regulations also provide other details regarding the terms of payment for the election and replace a number of outdated references that appeared in the Counting of Service by Former Members of the Senate or House of Commons Regulations, No. 2 (the repealed Regulations). The policy is essentially the same as in the repealed Regulations with some improvements that bring it into line with rules for elections for prior service with other Canadian pension plans. Description The Counting of Service by Former Members of the Senate or House of Commons Regulations, No. 2 are repealed and replaced by the Former Members of Parliament Counting of Service Regulations. The Former Members of Parliament Counting of Service Regulations allow a member of the Royal Canadian Mounted Police to elect to count prior service as a former member of the House of Commons or a former Senator as pensionable service under the Royal Canadian Mounted Police Pension Plan. The following provisions mirror the policy that applied under the repealed Regulations. The member may elect to buy back prior pensionable service in respect of which they (1) received a withdrawal allowance; or (2) are entitled to a retirement allowance under the Members of Parliament Retiring Allowances Act. In the latter case, the member must surrender entitlement to the retirement allowance under that Act. Although the member may choose not to count the prior parliamentary service as pensionable under the Royal Canadian Mounted Police Pension Plan, doing so may be more beneficial. The value of the prior service may be improved by having the future pension benefit calculated based on higher earnings, ancillary benefits (e.g. survivor benefits) may be increased or the individual may qualify for retirement at an earlier time. The cost to buy back a period of service in respect of which a withdrawal allowance was received is equal to the amount of the pension contributions the member would have been required to pay based on the member’s salary either at the date of first becoming a contributor to the Royal Canadian Mounted Police Pension Plan (if the election is made within one year of becoming a contributor) or at the date of election (if the election is made later than one year of becoming a contributor). For 2016, the Government matching rate is 1.32 times the amount the member is paying. This is the same matching rate that applies to contributions for current service with the Royal Canadian Mounted Police and to prior service elections for prior public service and service with the Canadian Forces in respect of which the member received a refund of pension contributions. The member may pay in a lump sum or in monthly life-insured instalments. Instalments must be paid up within the later of 20 years from the day of the election and the contributor’s 65th birthday. If the election to buy back service is made later than one year from the day of becoming a contributor to the Royal Canadian Mounted Police Pension Plan and if the contributor chooses to pay for the election by instalments, a medical examination must be passed. In the case of a transfer of prior service in respect of which the member is entitled to a retirement allowance under the Members of Parliament Retiring Allowances Act, the member’s contributions are transferred from the Members of Parliament Retiring Allowances Account to the Royal Canadian Mounted Police Pension Fund. The new Regulations require the contributor to repay any amount of the retirement allowance received after the individual has been a contributor to the Royal Canadian Mounted Police Pension Plan for one year. The repayment amount includes interest at 4% per year. In addition to the preceding provisions that set out the same policies that existed under the repealed Regulations, the new Regulations contain the following improvements. Details are provided regarding the medical examination that must be passed, in certain circumstances, by a member who chooses to pay for prior parliamentary service by monthly instalments. The member must undergo the medical examination within six months before or after the day the election is made. If they are unable to undergo the examination before the end of that period, it may be extended by six months. The examination must be performed by any physician who is authorized to practise medicine in the jurisdiction in which the examination is performed. The member passes the medical examination if the physician certifies in writing that they have a life expectancy of at least five years. A medical examination is no longer required if the member pays for the prior service in a lump sum. A new provision is introduced to deem the prior service election to have been made on an earlier day that it was actually made by the member. This would occur in the limited circumstance where the member received incorrect information (regarding eligibility to elect, the cost of buying back the service, medical requirements, etc.) from an authorized advisor and as a result, failed to make the election at that time. Once the error is discovered, the prior service election is deemed to have been made on the day after the day on which the member received the incorrect information. The cost of buying back service increases as time goes by, so deeming the election to have been made earlier results in a fair cost for the member. “One-for-One” Rule The “One-for-One” Rule does not apply to this proposal, as there is no change in administrative costs to business. This proposal does not apply to business. Small business lens The small business lens does not apply to this proposal, as there are no costs on small business. This proposal does not apply to business. Consultation Consultations took place with the Office of the Chief Actuary, the Department of Justice Canada, and the Treasury Board Secretariat. The Royal Canadian Mounted Police Pension Advisory Committee was also advised and supports the introduction of the Former Members of Parliament Counting of Service Regulations. This Committee has a statutory mandate to review matters respecting the administration, design and funding of the Royal Canadian Mounted Police Superannuation Act and to make recommendations to the Minister of Public Safety and Emergency Preparedness about those matters. Rationale The Royal Canadian Mounted Police Superannuation Act is the enabling authority for the Former Members of Parliament Counting of Service Regulations. The Act provides that (1) prior parliamentary service may be counted as pensionable to the extent and subject to the conditions prescribed by the Regulations; and (2) amounts in the Members of Parliament Retiring Allowances Account may be transferred to the Royal Canadian Mounted Police Pension Fund as prescribed by the Regulations. Consequently, there is no alternative to making the new Regulations. The new Regulations address concerns of the Standing Joint Committee for the Scrutiny of Regulations and introduce enhancements that are in line with the rules under the Royal Canadian Mounted Police Superannuation Act for elections for prior service with other Canadian pension plans. There is no increase in the actuarial liability of the Royal Canadian Mounted Police Pension Plan, no additional employer costs and no change in the current service cost as a result of these new Regulations. There is little to no risk associated with the Regulations, as the policies mirror existing rules under the Royal Canadian Mounted Police Pension Plan for elections for prior service with other Canadian pension plans. The anticipated number of contributors who will elect for prior parliamentary service is low. Implementation, enforcement and service standards The Regulations come into force on the day on which they are registered. Contact Pierre LeBrun Director General National Compensation Services Royal Canadian Mounted Police Ottawa, Ontario K1A 0R2 Telephone: 613-843-6243 Email: [email protected] Footnote a S.C. 1992, c. 46, s. 76(1) Footnote b S.C. 2009, c. 13, s. 7 Footnote c S.C. 1999, c. 34, s. 195 Footnote d R.S., c. R-11 Footnote 1 C.R.C., c. 1394

This Bill does not amend any statutes.

Sign up for alerts on this Bill

Receive emails tracking this Bill's progress.

See all your alerts in a dashboard.

Set an alert with one click and you're done!