Third

Session, 48th General Assembly

Elizabeth II, 2018

BILL 45

AN ACT RESPECTING A PENSION

PLAN FOR TEACHERS

Received and

Read the First Time ..................................................................

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

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

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

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

HONOURABLE TOM OSBORNE

Minister of Finance

and President of Treasury Board

Ordered to be printed by the Honourable House of

Assembly

EXPLANATORY NOTES

This Bill would repeal and replace

the Teachers' Pensions Act .

The Bill would

continue the Teachers' Pension

Plan Corporation, the Teachers' Pension Plan, the Teachers' Pension Plan Fund

and the Teachers' Supplementary Account;

prescribe government's

obligations to the pension plan and supplementary account;

prescribe the obligations of employers

to the pension plan; and

allow the Teachers' Pension

Plan Corporation to administer the Teachers' Pension Plan and the Teachers'

Pension Plan fund.

A BILL

AN ACT RESPECTING A PENSION PLAN FOR

TEACHERS

Analysis

Short title

Definitions

Participation in pension plan

Pension plan

Fund continued

Deductions paid to fund

Government payments

Supplementary account and supplementary

pension benefits

Transfer of commuted value

Attachment

Error or misrepresentation

Rectification

Marriage breakdown

Appeal

Corporation continued

Application of Acts to corporation

Objects of corporation

Board

Corporation and board bound

Funded status of plan

No liability

Indemnification

Binding effect

Conflict

Pension Benefits Act, 1997

Pension plan protected

RSNL1990 cF-8 Amdt.

SNL1996 cP-4.01 Amdt.

RSNL1990 cP-6 Amdt.

RSNL1990 cP-17

Amdt.

RSNL1990 cT-2

Amdt.

SNL1991 c17 Rep.

Commencement

Be it enacted by the Lieutenant-Governor and

House of Assembly in Legislative Session convened, as follows:

Short title

1. This

Act may be cited as the Teachers'

Pensions Act, 2018 .

Definitions

2. In

this Act

(a) "board" means the board of directors

of the corporation;

(b) "commuted value" means, unless the

context indicates otherwise, the present value of a pension benefit calculated

in accordance with the pension plan;

(c) "corporation" means the Teachers'

Pension Plan Corporation continued under

section 15;

(d) "deferred life annuity" means a sum

of money payable yearly or at another regular interval that

(

i) commences no earlier than the date the person

would have been eligible to retire under the pension plan, and

(ii) continues for the life of the person;

(e) "deferred pension" means a pension

benefit the payment of which is deferred until the person entitled to the

pension benefit is eligible to retire under the pension plan;

(f) "deferred pensioner" means a person

who has elected or is considered to have elected to receive a deferred pension;

(g) "employer" means

(

i) the government,

(ii) the Newfoundland

and Labrador Teachers' Association,

(iii) the Churchill Falls ( Labrador )

Corporation Limited, and

(iv) any other entity admitted to the pension plan

by the corporation in accordance with the joint sponsorship agreement;

(h) "former Act" means the Teachers' Pensions Act ;

(i) "fund" means the Teachers' Pension

Plan Fund continued under

section 5;

(j) "funding policy" means the funding

policy attached as Appendix A to the joint sponsorship agreement;

(k) "government" means the government of

the province;

(l) "joint sponsorship agreement" means

the agreement relating to the joint sponsorship of the pension plan between

government on the one part and the Newfoundland and Labrador Teachers'

Association on the other part, dated March 15, 2016 as amended from time to

time and includes the appendices to the agreement;

(m) "life income fund" and

"locked-in retirement income fund" means a registered retirement

income fund

(

i) established in accordance with the Income Tax Act ( Canada ),

(ii) included in the list established and

maintained under

section 18 of the Pension

Benefits Act Regulations , and

(iii) under which payments commence no earlier than

the date the person would have been eligible to retire under the pension plan;

(n) "locked-in retirement account" means

a registered retirement savings plan

(

i) established in accordance with the Income Tax Act ( Canada ),

(ii) included in the list established and

maintained under

section 18 of the Pension

Benefits Act Regulations , and

(iii) that requires the monies in the registered

retirement savings plan to be transferred to a life income fund, locked-in

retirement income fund or a deferred life annuity before payments may commence;

(o) "minister" means the minister

appointed under the Executive Council Act

to administer this Act;

(p) "pension benefit" means an amount

under the pension plan to which a teacher or other person is, or may, become

entitled;

(q) "pension plan" means, unless the

context indicates otherwise, the Teachers' Pension Plan referred to in

section

(r) "pensioner" means a person in

receipt of a pension benefit;

(s) "registered" means registered under

the Income Tax Act ( Canada );

(t) "sponsor body" means the body

appointed in accordance with the joint sponsorship agreement;

(u) "supplementary account" means the

Teachers' Supplementary Account continued under

section 8;

(v) "supplementary pension benefit" means

the supplementary pension benefit referred to in subsection 8(3);

(w) "teacher" includes the following

persons appointed or employed by an employer:

(

i) a person who holds a valid and subsisting

certificate, grade or licence not lower than the emergency supply licence

issued under the Teacher Training Act

and who is, subject to the Schools Act ,

1997 , appointed or employed by an employer

to give instruction or to administer or supervise instructional services in a

college or a school,

(ii) a director, an associate director or an

assistant director, as defined in the Schools

Act, 1997 except the assistant director of finance and administration

appointed under

section 79 of the Schools

Act, 1997 ,

(iii) an administrative officer of the Newfoundland

and Labrador Teachers Association by virtue of the Teachers' Association Act , and who was before his or her

appointment

(

A) a teacher to whom this Act or the former Act

applied, or

(

B) a public servant to whom the Public Service Pensions Act, 1991

applied,

(iv) a full time salaried president of the

Newfoundland and Labrador Teachers' Association or the Canadian Teachers'

Federation and who was before his or her appointment

(

A) a teacher to whom this Act or the former Act

applied, or

(

B) a public servant to whom the Public Service Pensions Act, 1991

applied, or

(

v) a person who is considered a teacher under the

pension plan; and

(x) "year's maximum pensionable

earnings" has the same meaning as in the Canada Pension Plan Act ( Canada ).

Participation in

pension plan

(1) A teacher shall contribute to and participate in the pension plan.

(2) In addition to the contributions under

subsection (1), a teacher whose pensionable earnings in a calendar year exceed

the pensionable earnings that would require contributions up to the limit

approved under the Income Tax Act ( Canada )

shall make contributions, at the contribution rate set out in the pension plan,

in respect of the excess pensionable earnings.

(3) The contributions required under subsections

(1) and (2) shall be deducted from the teacher's salary.

Pension plan

(1) The pension plan provided for, by and under the former Act is continued in

accordance with this Act and the documentation prepared and maintained in

accordance with the joint sponsorship agreement prescribing the terms

applicable to the pension plan.

(2) The supplementary pension benefit is not

included in the pension plan.

Fund continued

(1) The

Teachers' Pension Plan Fund established under the former Act is continued.

(2) The fund shall be held in trust by the

corporation.

(3) There shall be deposited into the fund

(

a) contributions made by teachers and employers

under this Act;

(

b) the income of the fund; and

(

c) any other income arising from the operation of

the pension plan.

(4) Where an employer does not make a contribution

or deposit to the fund in the manner required by this Act, a penalty may be

assessed and levied upon the amount of that contribution or deposit in a manner

directed by the corporation.

(5) There shall be paid out of the fund

(

a) pension benefits, refunds and payments under

the pension plan;

(

b) the operating costs of the fund; and

(

c) other expenditures arising from the operation

of the pension plan.

(6) The assets of the fund may be pooled with the

assets of other pension plans, including government pension plans, for

investment purposes as directed by the corporation.

Deductions paid

to fund

(1) An employer shall pay into the fund all contributions required under the

pension plan and the joint sponsorship agreement.

(2) In addition to the contributions under

subsection (1), where a teacher's pensionable earnings in a calendar year

exceeds the pensionable earnings that would require contributions up to the

limit approved under the Income Tax Act (Canada),

the employer shall pay into the fund contributions in respect of the teacher's

excess pensionable earnings at the contribution rate set out in the pension

plan.

(3) The government shall pay the contributions

referred to in subsections (1) and (2) out of the Consolidated Revenue Fund.

Government

payments

(1) The

promissory note delivered by the government to the corporation under the former

Act continues to be fully enforceable.

(2) The promissory note shall amortize $1,862,000,000,

valued at September 1, 2015, over 30 years in equal annual payments of

$135,272,273 beginning on August 31, 2016.

(3) Payments made under subsection (2) shall be

made regardless of the funded status of the pension plan in the future.

(4) The present value of the residual payments

described in subsection (2), discounted at 6%, shall be considered to be an

asset of the pension plan.

(5) The asset referred to in subsection (4) is a

non-investment asset which is non-marketable and non-transferrable except as

otherwise provided in this Act and which shall be used solely for the purpose

of determining the funded ratio of the pension plan.

Supplementary

account and supplementary pension benefits

(1) The

Teachers' Supplementary Account established in the Consolidated Revenue Fund

under the former Act is continued.

(2) The minister shall be responsible for the

supplementary account and supplementary pension benefits.

(3) Where the calculation of a teacher's pension

benefit without application of the limits under the Income Tax Act (Canada)

results in an amount greater than the amount of the teacher's actual pension

benefit, the teacher shall be entitled to a supplementary pension benefit equal

applicable to the pension benefit.

(4) Notwithstanding subsection (3), a teacher

employed by an entity referred to in subparagraph 2(g)(iv) shall not be

entitled to a supplementary pension benefit without the approval of the

minister.

(5) Where a person is eligible to transfer his or

her commuted value under the pension plan, the person is eligible to receive

payment of the commuted value of his or her supplementary pension benefit.

(6) A supplementary pension benefit shall be paid

from the supplementary account.

(7) The contributions made under subsections 3(2)

and 6(2) shall be paid by the corporation to the supplementary account no later

than the last day of February of the subsequent year.

(8) Where there is insufficient money in the

supplementary account to pay supplementary pension benefits, money shall be

paid from the Consolidated Revenue Fund to the supplementary account to make

the payments.

Transfer of

commuted value

(1) Where a person is eligible to transfer his or her commuted value under the

pension plan and elects to transfer his or her commuted value, the commuted

value shall be transferred to

(

a) a registered pension plan provided the

administrator of the pension plan agrees to accept the transfer;

(

b) a life income fund, locked-in retirement income

fund or locked-in retirement account; or

(

c) a deferred life annuity purchased from an

insurance company licensed to transact business in Canada .

(2) Subsection (1) does not apply where

(

a) the person's annual pension benefit payable is

less than 4% of the year's maximum pensionable earnings for the calendar year

in which employment is terminated;

(

b) the commuted value of a person's pension benefit

is less than 10% of the year's maximum pensionable earnings for the calendar

year in which employment is terminated; or

(

c) the person provides documentation from a

medical practitioner satisfactory to the corporation that he or she has a

mental or physical disability that is likely to shorten considerably his or her

life expectancy.

(3) For the purpose of a transfer under subsection

(1), a contract to establish a life income fund, locked-in retirement income

fund, locked-in retirement account or a deferred life annuity shall be in the

form of a certified specimen contract filed under

section 18 of the Pension Benefits Act Regulations .

(4) Where a person transfers or is paid his or her

commuted value under this section, the corporation and the pension plan shall

be fully discharged of all obligations to the teacher or deferred pensioner in

respect of the period of pensionable service related to the transfer.

Attachment

10. Monies

payable or awarded under the pension plan shall not be assigned, charged,

attached, anticipated or given as security and is exempt from execution,

seizure or attachment and a transaction purporting to assign, charge, attach,

anticipate or give that pension benefit as security is void, except where

(

a) this

section is overridden by another Act; or

(

b) the transaction is a division of a pension

benefit or supplementary pension benefit in accordance with

section 13.

Error or

misrepresentation

11. The

corporation may adjust or cancel a pension benefit which has been paid or awarded

as a result of error or misrepresentation and where an overpayment of a pension

benefit has been made the corporation may recover the overpayment.

Rectification

12. Where

a pension benefit has been underpaid or unreasonable delays in payments have

occurred, the corporation may make payments in rectification together with interest

that may be determined by the corporation.

Marriage

breakdown

(1) Where

(

a) a court in the province makes an order for the

division of matrimonial property under the Family

Law Act or a similar order is made by a court outside the province; or

(

b) a teacher, deferred pensioner or pensioner has

entered into a separation agreement within the meaning of the Family Law Act to divide matrimonial

property,

a pension benefit or supplementary pension

benefit shall be divided in accordance with the court order or separation

agreement and the pension plan.

(2) Where the corporation applies to the court for

direction under the marriage breakdown provisions of the pension plan, the

court may make or vary an order for the division of matrimonial property as it

considers appropriate in the circumstances and any order made against the

corporation shall be paid from the fund.

Appeal

(1) A

person may, in accordance with the pension plan, appeal a decision of the

corporation in a matter related to, connected with or arising out of his or her

entitlement to, or payment of, a pension benefit or other money under this Act.

(2) A person may apply for judicial review of a decision

under subsection (1) within 60 days after receipt of the decision by filing an

application with the Supreme Court.

Corporation

continued

(1) The

Teachers' Pension Plan Corporation established under the former Act is

continued as a corporation without share capital.

(2) The head office of the corporation shall be at

St. John's .

(3) The corporation is not an agent of the Crown.

(4) The provisions of this

section and sections 16

section 21 constitute the articles of the corporation.

(5) A director or a person employed by the

corporation does not become an officer or employee of the Crown by reason of

that office or employment only.

Application of

Acts to corporation

(1) The

Corporations Act , except

section 27,

paragraphs 31(a), (

d) and (e), sections 32, 167, 172, 190, 191, 198, 199, 200,

201, 204, 277, 278, 378, and subsection 422(1), does not apply to the

corporation.

(2) The Lieutenant-Governor in Council, on the

recommendation of the sponsor body, may make regulations directing that

additional provisions of the Corporations

Act apply to the corporation, provided that those regulations do not

conflict with this Act.

(3) Where there is a conflict between a provision

referred to in subsection (1) and this Act, this Act prevails.

Objects of

corporation

17 .

The objects of the corporation are

(

a) to act as trustee of the fund;

(

b) to act as administrator of the pension plan;

and

(

c) to exercise those other powers and perform

those other duties as may be conferred upon the corporation under the joint

sponsorship agreement.

Board

(1) The number of persons on the board shall be determined in accordance with the

joint sponsorship agreement.

(2) A director of the corporation, in exercising

his or her powers and discharging his or her duties, shall

(

a) act honestly and in good faith with a view to

the best interests of the pension plan and for the benefit of all teachers,

pensioners and deferred pensioners; and

(

b) exercise the care, diligence and skill that a

reasonably prudent person would exercise in comparable circumstances.

(3) The board, by resolution, may make, amend or

repeal by-laws that regulate the business or affairs of the corporation.

(4) By-laws made by the board shall not conflict

with the joint sponsorship agreement.

Corporation and

board bound

19. The

corporation and the board are bound by and shall act in accordance with the

joint sponsorship agreement as provided for in that agreement.

Funded status of

plan

20. Actuarial

surpluses and deficits relating to the pension plan shall be shared in

accordance with the funding policy.

No liability

21. The

corporation is not liable for loss or damage suffered by another person because

of anything done or omitted to be done under or in the exercise or supposed

exercise of the powers conferred by this Act, where those powers have been

exercised in accordance with subsection 18(2).

Indemnification

22. A

director or officer or a former director or officer who acted in good faith in

the execution of his or her duties and powers and his or her heirs, executors,

administrators and other legal representatives shall be indemnified by the fund

for all legal expenses and all other charges and expenses actually and

reasonably incurred by that director, officer, former director or former

officer, including an amount paid to settle an action or to satisfy a judgment

in a civil, criminal or administrative action or proceeding to which the person

is made a party because of being or having been a director or officer.

Binding effect

23 .

(1) The

sponsor body's decisions, rules, policies and procedures made or established in

accordance with the joint sponsorship agreement, the pension plan or the fund

shall be binding on the corporation, employers, teachers, pensioners and

deferred pensioners and their respective beneficiaries, dependents, estates,

heirs, executors, administrators, successors and assigns.

(2) The corporation's decisions, rules, policies

and procedures shall be binding on the sponsor body, employers, teachers,

pensioners and deferred pensioners and their respective beneficiaries,

dependents, estates, heirs, executors, administrators, successors and assigns.

Conflict

24. Where

this Act conflicts with another Act of the province, this Act shall prevail.

Pension Benefits

Act, 1997

25. The

Pension Benefits Act, 1997 does not

apply to this Act or the pension plan.

Pension plan

protected

26. This

Act shall apply to all pension benefits and supplementary pension benefits accrued

under the former Act.

RSNL1990 cF-8

Amdt.

27. Subparagraph 2(1)(k.1)(ii) of the Financial Administration Act is repealed

and the following substituted:

(ii) the Teachers' Pension Plan Corporation

continued under the Teachers' Pensions

Act, 2018 , and

SNL1996 cP-4.01

Amdt.

(1) Section 2 of the Pension Benefits Act, 1997 is amended by

adding immediately after paragraph (ee) the following:

(ee.1) "Public Service Pension Plan" has

the same meaning as the term "pension plan" in the Public Service Pensions Act, 1991 ;

(2) Section 2 of the Act is amended by deleting

the word "and" at the end of paragraph (ii) and adding immediately

after that paragraph the following:

(ii.1) "Teachers' Pension Plan" has the

same meaning as the term "pension plan" in the Teachers' Pensions Act, 2018 ; and

(3) Section 25 of the Act is amended by adding

immediately after subsection (5) the following:

(5.1) Where a member of a pension plan requests to

transfer the commuted value of his or her pension benefit to the Public Service

Pension Plan or the Teachers' Pension Plan, the administrator of the plan shall

provide a written statement as required by the superintendent.

(4) Paragraph 40(1)(

a) of the Act is amended by

adding immediately after subparagraph (

i) the following:

(i.1) transfer the commuted value of the member's

pension benefit to the Public Service Pension Plan or the Teachers' Pension

Plan, if the Public Service Pension Plan or the Teachers' Pension Plan permits and

the administrator of the Public Service Pension Plan or the Teachers' Pension

Plan agrees to accept the payment,

(5) Paragraph 40(2)(

a) of the Act is amended by

adding immediately after subparagraph (

i) the following:

(i.1) transfer the commuted value of the member's

pension benefit to the Public Service Pension Plan or the Teachers' Pension

Plan, if the Public Service Pension Plan or the Teachers' Pension Plan permits and

the administrator of the Public Service Pension Plan or the Teachers' Pension

Plan agrees to accept the payment,

RSNL1990 cP-6

Amdt.

29. Subsection 9(3) of the Pensions Funding Act is repealed and the following substituted:

(3) Subsection (1) does not apply to the plan

continued under the Teachers' Pensions

Act, 2018 .

RSNL1990 cP-17

Amdt.

30. The

Schedule to the Portability of Pensions Act is amended by deleting the reference

"The Teachers' Pensions Act ".

RSNL1990 cT-2

Amdt.

Section 8 of the Teachers' Association Act is repealed and the following

substituted:

Administrative

officers

8. A

person who is an administrative officer of the association and who was before

his or her appointment to the post a teacher to whom

(

a) the Teachers'

Pensions Act, 2018 applied; or

(

b) the definition of "teacher" in the Schools Act, 1997 applies

shall during his or her term of office as

an administrative officer be considered to be a teacher for all of the purposes

of the Teachers' Pensions Act, 2018.

SNL1991 c17 Rep.

32. The Teachers'

Pensions Act is repealed.

Commencement

(1) This Act, or a section, subsection or paragraph of it, except subsections 28(1),

(2), (4) and (5), comes into force on a day or days to be proclaimed by the

Lieutenant-Governor in Council.

(2) Subsections

28(1), (2), (4) and (5) are considered to have come into force on December 16,

Queen's Printer