First

Session, 48th General Assembly

Elizabeth II, 2016

BILL 28

AN ACT TO AMEND THE

PENSIONS FUNDING ACT AND THE TEACHERS' PENSIONS ACT

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

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

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

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

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

HONOURABLE

CATHY BENNETT

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 Pensions

Funding Act and the Teachers' Pensions Act to reflect the Teachers'

Pension Plan Reform Agreement.

The Pensions Funding Act would

be amended to exempt the teachers' pension plan under the Teachers' Pensions

Act from the Act, and, in particular, from the deficiency guarantee under

the Act.

The Bill would also transfer the value

of the assets contained in the pooled fund under the Pensions Funding Act respecting the teachers' pension plan to the

pension fund established under the Teachers ' Pensions Act .

The Teachers' Pensions Act would be amended to

establish

the Teachers' Pension Plan Corporation, which would act as administrator of the

pension plan and trustee of the fund;

transfer the assets relating to the pension plan

under the Act from the pooled fund under the Pensions Funding Act into the Teachers' Pension Plan Fund;

revise

a provision requiring a promissory note further to a joint sponsorship

agreement to clarify that the amount required to be amortized is to be valued

at September 1, 2015; and

make those other amendments as are necessary to

reflect the reform agreement, and to provide for the future administration of

the plan and management of the fund by the corporation.

A BILL

AN ACT TO AMEND THE PENSIONS FUNDING ACT

AND THE TEACHERS' PENSIONS ACT

Analysis

PENSIONS

FUNDING ACT

1. S.3 Amdt.

Interpretation

2. S.5.1 Amdt.

Transfer

3. S.9 Amdt.

Deficiency guarantee

TEACHERS'

PENSIONS ACT

S.2 R&S

Interpretation

S.4 Amdt.

Excluded teachers

S.5.1 Added

Fund established

S.6 Amdt.

Contributions by teachers

S.7 Amdt.

Deductions paid to fund

S.8 Amdt.

Government contributions

10. S.8.1 Amdt.

Government payments

S.8.2 Added

Termination and plan wind-up

S.9 Amdt.

Repayment of contributions

S.11 Amdt.

Purchase of prior substitute teaching service

S.12.1Amdt.

Strike and lockout

S.13 Amdt.

Purchase of leave without pay

S.16 Amdt.

Reciprocity

S.19 R&S

Disability retirement

S.20 Amdt.

Early retirement

S.21 Amdt.

Deferred pension

S.24 Amdt.

Re-employment

S.26 R&S

Survivor benefits

S.27 Amdt.

Designated beneficiary

S.29 Amdt.

When pensions payable

S.30 Amdt.

Pension payments

S.31 R&S

Attachment

26. S.33 Amdt.

Error or misrepresentation

S.34 Amdt.

Rectification

S.35 Rep.

Committee

S.38 Amdt.

Appeal

S.39 Amdt.

Procedure

Ss.39.1 to 39.8 Added

39.1 Corporation

established

39.2 Application of Acts

to corporation

39.3 Objects of corporation

39.4 Board

39.5 Corporation and board

bound

39.6 Funded status of plan

39.7 No liability

39.8 Binding effect

S.40 Amdt.

Conflict

S.42 R&S

Directives

S.43 Amdt.

Income Tax Act ( Canada )

requirements

Commencement

Be it enacted by the Lieutenant-Governor and

House of Assembly in Legislative Session convened, as follows:

PENSIONS FUNDING ACT

RSNL1990 cP-6

as amended

1. Paragraph 3(

b) of the Pensions Funding Act is repealed.

Section 5.1 of the Act is amended by renumbering it as subsection 5.1(1) and by adding

immediately after that subsection the following:

(2) The assets in the fund relating to the plan

under the Teachers' Pensions Act are

transferred to the Teachers' Pension Plan Fund established under

section 5.1 of

that Act.

Section 9 of the Act is amended by adding

immediately after subsection (2) the following:

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

established by the Teachers' Pensions Act.

TEACHERS' PENSIONS ACT

SNL1991 c17

as amended

Section 2 of the Teachers' Pensions Act is repealed and the following substituted:

Interpretation

(1) In

this Act

(a) "actuarially reduced pension" means a

pension that has been reduced by an amount determined by an actuary that

reflects the fact that the pension is being paid from a date that is earlier

than the date the teacher, based on his or her service, would be eligible for

an unreduced pension;

(b) "board" means the board of directors

of the corporation;

(c) "Canada Pension Plan" means the Canada Pension Plan ,

Chapter C-8 of the

Revised Statutes of Canada, 1985;

(d) "child" includes a natural child, a

stepchild or an adopted child;

(e) "cohabiting partner " means

(

i) in relation to a teacher, pensioner or

deferred pensioner who has a spouse, means a person who is not the spouse who

has cohabited continuously with the teacher, pensioner or deferred pensioner in

a conjugal relationship for not less than 3 years,

(ii) in relation to a teacher, pensioner or

deferred pensioner who does not have a spouse, means a person who has cohabited

continuously with the teacher, pensioner or deferred pensioner, in a conjugal

relationship for not less than one year,

and is cohabiting or has cohabited with the

teacher, pensioner or deferred pensioner within the preceding year;

(f) "commuted value" means commuted

value as defined in the Pension Benefits

Act, 1997 ;

(g) "consumer price index" with respect

to a year, means the average for each month of that year of the Consumer Price

Index for Canada

as published by Statistics Canada;

(h) "corporation" means the Teachers'

Pension Plan Corporation established under

section 39.1;

(i) "deferred pensioner" means a person

who, under

section 9.1, has elected or is considered to have elected to receive

a deferred pension;

(j) "former Act" means The Education (Teachers' Pensions) Act ;

(k) "fund" means the Teachers' Pension

Plan Fund established under

section 5.1;

(l) "funding policy" means the funding

policy attached as Appendix A to the joint sponsorship agreement;

(m) "government" means the government of

the province;

(n) "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 and includes the appendices to the agreement;

(o) "life income fund" means the life

income fund as defined in the Pension

Benefits Act Regulations ;

(p) "locked in retirement fund" means

locked in retirement account as defined in the Pension Benefits Act Regulations ;

(q) "minister" means the minister appointed

under the Executive Council Act to

administer this Act;

(r) "normal retirement age" means the

end of the month in which a teacher reaches the age of 60 years, but not later

than the end of the teaching year in which the teacher reaches the age of 60

years;

(s) "pension" means an annual pension

payable to a former teacher in accordance with the pension plan;

(t) "pension plan" means the Teachers'

Pension Plan referred to in this Act;

(u) "pensionable service" means service

credited under the pension plan for the purpose of determining whether a

teacher has qualified for a pension and the amount of the pension;

(v) "pensioner" means a person in

receipt of a pension under this Act;

(w) "prescribed" means, except as

otherwise indicated, prescribed by the corporation;

(x) "principal beneficiary" means the

spouse of a teacher, pensioner or deferred pensioner, or where the teacher, pensioner

or deferred pensioner has a cohabiting partner, his or her cohabiting partner;

(y) "salary" means the normal

remuneration paid to a teacher for the normal working period or other

remuneration that may be prescribed;

(z) "sponsor body" means the body

appointed in accordance with

section 4 of the joint sponsorship agreement;

(aa) "spouse" means a person who

(

i) is married to the teacher, pensioner or

deferred pensioner,

(ii) is married to the teacher, pensioner or

deferred pensioner by a marriage that is voidable and has not been voided by a

judgment of nullity, or

(iii) has gone through a form of a marriage with the

teacher, pensioner or deferred pensioner, in good faith, that is void and is

cohabiting or has cohabited with the teacher, pensioner or deferred pensioner within

the preceding year;

(bb) "supplementary

account" means the Teachers' Supplementary Plan Account established under

subsection 5(2);

(cc) "survivor benefit" means a benefit

payable to the principal beneficiary of a deceased teacher, pensioner or

deferred pensioner;

(dd) "teacher" means a person holding a

valid and subsisting certificate or grade or licence not lower than the

emergency supply licence issued under the Teacher

Training Act, who is, subject to the

Schools Act, 1997 appointed or employed by a board of directors or a school

board to give instruction or to administer or supervise instructional services

in a college or a school and includes

(

i) a director, an associate director or an

assistant director, except the assistant director of finance and administration

appointed under

section 79 of the Schools

Act, 1997 , and

(ii) every person who is considered a teacher under

section 3;

(ee) "teaching service" means the total

period during which a person who holds a valid certificate or grade or a

licence is employed as a teacher in the province;

(ff) "teaching year" means the 12

calendar months beginning on July 1;

(gg) "terminating teacher" means a

teacher who terminates his or her employment or whose employment is terminated

for reasons other than disability and who is not retired or entitled to receive

a pension under subsection 20(1) or (3);

(hh) "year of pensionable service" means

190 days of teaching service unless otherwise prescribed; and

(ii) "YMPE" means the year's maximum

pensionable earnings as defined under the Canada Pension Plan.

(2) Words and expressions used in paragraph (1)(dd)

and

section 3 and defined by the Schools

Act, 1997 have the meaning assigned to them by that Act.

5. Paragraph 4(

b) of the Act is repealed and the

following substituted:

(

b) is excluded from this Act by a directive of

the corporation.

6. The Act is amended by adding immediately after

section 5 the following:

Fund established

5.1

(1) There

is established a fund to be known as the Teachers' Pension Plan Fund.

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

corporation considers advisable in the securities and investments that conform

to the investment requirements of the regulations made under

section 37 of the Pensions Benefits Act, 1997 .

(3) The assets relating to the pension plan

contained in the Newfoundland

and Labrador Pooled Pension Fund under the Pensions

Funding Act are transferred to the fund under the authority of

section 5.1

of that Act.

(4) In addition to subsection (3), there shall be

deposited into the fund

(

a) contributions made by teachers and government

under this Act;

(

b) the income of the fund; and

(

c) any other income arising from the operation of

the pension plan.

(5) Where government does not make a contribution

or deposit to the pension plan in the manner required by this Act, a penalty

shall be assessed and levied upon the amount of that contribution or deposit in

a manner directed by the corporation.

(6) There shall be paid out of the fund

(

a) pensions, refunds and payments as they fall

due under the pension plan;

(

b) the operating costs of the fund; and

(

c) other expenditures arising from the operation

of the pension plan.

(7) 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.

7. Subsections 6(2) and (3) of the Act are

repealed and the following substituted:

(2) There shall be deducted from the salary of

every teacher to whom the pension plan applies 11.35% of that salary.

(2.1) Notwithstanding subsection (2), the sponsor

body may prescribe different amounts to be deducted from the salary of every

teacher to whom the pension plan applies.

(3) Where the amount of contributions made under

subsection (2) or (2.1) exceeds the amount of the annual deductible

contributions to a registered plan permitted under the Income Tax Act (Canada), the amount of the excess, as determined at

the end of the calendar year in which the contributions are made, shall be paid

from the fund to the supplementary account no later than the last day of

February in the immediately following calendar year.

Section 7 of the Act is amended by deleting the

word "pension".

9. (1) Subsections 8(1) and (1.1) of the Act

are repealed and the following substituted:

Government contributions

(1) The

government of the province shall pay out of the Consolidated Revenue Fund and

pay into the fund

(

a) an amount equal to the contributions of

teachers under this Act unless otherwise directed by this Act or a directive of

the sponsor body; and

(

b) an additional amount that may be prescribed by

the sponsor body.

(1.1) Where the amount of government contributions

under subsection (1) exceeds the amount of the annual deductible contributions

to a registered plan permitted under the Income

Tax Act (Canada), the amount of the excess, as determined at the end of the

calendar year in which the contributions are made, shall be paid from the fund

to the supplementary account no later than the last day of February of the

immediately following calendar year.

(2) Subsection 8(4) of the Act is repealed and the

following substituted:

(4) Where the contribution of the government of

the province is reduced under this Act, a teacher or a former teacher may elect

to contribute an amount, in addition to the amount which he or she is or was

required to contribute under

section 6, to be calculated in accordance with the

teacher in the position he or she would have been in respecting an award of

pension if the government of the province had not reduced its contribution.

10. Subsection 8.1(2) of the Act is repealed and

the following substituted:

(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.

11. The Act is amended by adding immediately after

section 8.1 the following:

Termination and

plan wind-up

8.2

(1) Where

the fund is to be terminated and wound up in accordance with the joint

sponsorship agreement, the assets of the fund shall be used to meet the accrued

benefit entitlements of teachers, pensioners, deferred pensioners and any other

persons entitled to a benefit under the pension plan before any other distribution

may be made.

(2) Where the assets of the fund are insufficient

to secure the benefit entitlements referred to in subsection (1), the assets of

the fund shall be allocated to teachers, pensioners, deferred pensioners and

any other persons entitled to a benefit under the pension plan on a pro-rated

basis, based on the actuarial present value of the accrued benefits of those

persons as of the date of the wind-up, and distributed in the manner determined

by the corporation.

(3) The government or a teacher is not required to

pay any additional amount to the pension plan in respect of a shortfall in the

fund upon the wind-up of the pension plan.

(4) Nothing in subsection (3) affects in any way

government's obligation to continue to make payments under subsection 8.1(2) in

the manner contemplated in that subsection.

12. Subsections 9(3) and (4) of the Act are amended

by deleting the word "minister" wherever it occurs and substituting

the word "corporation".

13. Subsection 11(1) of the Act is amended by

deleting the word "minister" and substituting the word

"corporation".

14. Subsection 12.1(4) of the Act is amended by

deleting the words "by the minister".

15. Subsection 13(4) of the Act is amended by

deleting the word "minister" and substituting the word

"corporation".

16. Subsection 16(2) of the Act is repealed and the

following substituted:

(2) The corporation may enter into a reciprocal

agreement with a government, company, corporation, institution or legal entity

referred to in subsection (1) to give effect to the purposes set out in that

subsection and to provide for payments to be made into and out of the fund

under that agreement.

Section 19 of the Act is repealed and the

following substituted:

Disability retirement

(1) Every

teacher shall be retired under the pension plan where he or she is suffering

from a physical or mental impairment that prevents the teacher from performing

the duties of the employment in which he or she was engaged before the

commencement of the impairment provided that the impairment is medically

certified to the satisfaction of the corporation as likely to be permanent.

(2) The corporation may, by notice in writing,

require a pensioner who has retired under subsection (1) or who is receiving a

pension under subsection 21(3.1) and who has not attained normal retirement age

to be available for a medical examination that may be prescribed.

(3) Where a pensioner referred to in subsection (2)

(

a) fails to be present for a medical examination

in accordance with that subsection, his or her pension shall be discontinued during

the period in which he or she fails to comply with the request contained in the

notice; or

(

b) who, upon the medical examination referred to

in that subsection, is found to be in good health, his or her pension shall be

discontinued immediately.

Section 20 of the Act is amended by adding

immediately after subsection (1) the following:

(1.1) A teacher who has reached early retirement age

and has been credited with not less than 5 years of pensionable service may

elect to retire and receive an actuarially reduced pension.

19. (1) Subsection 21(1) of the Act is

repealed and the following substituted:

Deferred pension

(1) Effective

September 1, 2016, a teacher who terminated employment, or whose employment was

terminated for a reason other than disability, and who has been credited with

not less than 5 years but less than 24.5 years of pensionable service may elect

to receive a deferred pension calculated in accordance with

section 22 and 22.1

and paid from age 62 or, if he or she so qualifies, paid in accordance with

section

20 and the other provisions of this Act.

(2) Subsection 21(3.1) of the Act is amended by

deleting the word "minister" and substituting the word

"corporation".

(3) Paragraph 21(4)(

b) of the Act is amended by

deleting the word "minister" and substituting the word

"corporation".

20. Subsection 24(2) of the Act is repealed.

Section 26 of the Act is repealed and the

following substituted:

Survivor benefits

(1) A

surviving principal beneficiary of

(

a) a pensioner;

(

b) a deferred pensioner; or

(

c) a teacher with at least 5 years of pensionable

service

is entitled, upon the death of the

pensioner, deferred pensioner or teacher to a survivor benefit equal to 60% of

the pension entitlement of the pensioner, deferred pensioner or teacher.

(2) Where the pension entitlement of the

pensioner, deferred pensioner or teacher on his or her death includes the

bridge benefit determined under subsections 22(3) and 22.1(3), the bridge

benefit shall continue until the last day of the month in which the deceased pensioner,

deferred pensioner or teacher would have reached 65 years and the survivor

benefit shall be adjusted accordingly.

(3) The survivor benefit shall be paid to the

surviving principal beneficiary for life and shall commence on the first day of

the month following the month in which the pensioner or teacher dies.

(4) Where a surviving principal beneficiary dies

while in receipt of a survivor benefit, the survivor benefit shall be paid to

or for the benefit of any surviving children of the teacher, pensioner or

deferred pensioner, while they are under the age of 18 years, or under the age

of 24 years while they are in full-time attendance at a recognized school or

post-secondary institution.

(5) Where a pensioner referred to in paragraph

(1)(

a) dies leaving no surviving principal beneficiary, the survivor benefit

shall be paid to or for the benefit of his or her surviving children, while

they are under the age of 18 years, or under the age of 24 years while they are

in full-time attendance at a recognized school or post-secondary institution.

(6) Subsection (2) is considered to have come into

force on September 1, 1998.

22. Subsection 27(2) of the Act is amended by

deleting the word "minister" and substituting the word

"corporation".

23. Subsection 29(1) of the Act is amended by

deleting the word "minister" and substituting the word

"corporation".

24. (1) Paragraph 30(1)(

a) of the Act is

repealed and the following substituted:

(

a) a pension calculated under sections 22 and

22.1, not exceeding the maximum annual allowable registered pension permitted

under the Income Tax Act (Canada),

shall be paid from the fund; and

(2) Subsection 30(2) of the Act is repealed and

the following substituted:

(2) Benefits payable under sections 26, 27, 27.1

and 28 and a return of contributions, commuted value or other lump sum payment

in respect of an entitlement under this Act shall be paid from the fund and the

supplementary account on the same basis and in the same proportions as a

pension payment under subsection (1).

Section 31 of the Act is repealed and the

following substituted:

Attachment

31. A

pension payable under the 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 as security that pension is void, except where this

section is

overridden by another Act, subject to the provisions of the Pensions Benefits Act, 1997 .

Section 33 of the Act is amended by deleting

the word "minister" wherever it occurs and by substituting the word

"corporation".

Section 34 of the Act is amended by deleting

the word "minister" and substituting the word "corporation".

Section 35 of the Act is repealed.

29. (1) Subsection 38(1) of the Act is amended

by deleting the words "minister or of the Lieutenant-Governor in

Council" and substituting the word "corporation".

(2) Subsection 38(2) of the Act is repealed and

the following substituted:

(2) Where a teacher or other person proposes to

appeal under subsection (1), he or she shall, within 60 days after he or she

has received the decision of the corporation, serve on the corporation a written

notice of his or her intention to appeal to a judge of the Trial Division.

Section 39 of the Act is amended by deleting

the word "minister" wherever it occurs and substituting the word

"corporation".

31. The Act is amended by adding immediately after

section 39 the following:

Corporation established

39.1

(1) There

is established a corporation without share capital to be known as the Teachers'

Pension Plan Corporation.

(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

39.2 to

section 39.7 constitute the articles of the corporation.

(5) A director or a person employed by the

corporation does not become, by reason of that office or employment only, an

officer or employee of the Crown.

Application of

Acts

to corporation

39.2

(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

39.3 The

objects of the corporation are

(

a) to act as trustee of the fund; and

(

b) to act as administrator of the pension plan,

and to exercise those other powers and perform those other duties as may be

expressly conferred upon the corporation under the joint sponsorship agreement.

Board

39.4

(1) For

the exercise and discharge of the powers and duties of the corporation, there

shall be a board of directors comprised of not less than 6 and not more than 16

persons.

(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

39.5 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

39.6 Actuarial

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

accordance with the funding policy as follows:

(a) 50% shall be shared with and borne by

government; and

(b) 50% shall be shared with and borne by the

members of the pension plan.

No liability

39.7 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 39.4(2).

Binding effect

39.8

(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, government, 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, government, teachers,

pensioners and deferred pensioners and their respective beneficiaries,

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

32. Subsection 40(2) of the Act is repealed and the

following substituted:

(2) Unless otherwise specified, the Pensions Benefits Act, 1997 does not

apply to this Act.

Section 42 of the Act repealed and the

following substituted:

Directives

(1) The

corporation or the sponsor body, as applicable, may issue directives for the purpose

of this Act.

(2) Where, before the coming into force of this

section, the minister issued a directive to give effect to the purpose of this

Act, that directive shall continue in force for one year after the coming into

force of this subsection as if it had been made by the corporation or sponsor

body, as appropriate, unless it has been superseded by a directive of the

corporation or the sponsor body under the authority of subsection (1).

(3) A directive which has not been superseded

under subsection (2) shall expire at the end of the period referred to in that

subsection.

34. Paragraph 43(

c) of the Act is amended by

deleting the word "minister" and substituting the word

"corporation".

Commencement

35. A section, subsection, paragraph, subparagraph

or clause of this Act comes into force on a day or days to be proclaimed by the

Lieutenant-Governor in Council.

Queen's Printer