First

Session, 49th General Assembly

Elizabeth II, 2020

BILL 54

AN ACT TO

AMEND THE PENSION BENEFITS ACT, 1997

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

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

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

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

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

HONOURABLE SARAH STOODLEY

Minister

of Digital Government and Service Newfoundland and Labrador

Ordered

to be printed by the Honourable House of Assembly

EXPLANATORY NOTES

This Bill would amend the Pension Benefits Act, 1997 to

allow a person who had

previously transferred his or her pension benefit to a class or type of

retirement savings arrangement approved by the superintendent to withdraw from

the retirement savings arrangement an amount not exceeding a prescribed amount where

the person is experiencing a circumstance of financial hardship and satisfies the

prescribed requirements; and

allow a person who had

previously transferred his or her pension benefit to a class or type of

retirement savings arrangement approved by the superintendent to withdraw the

full amount held in the retirement savings arrangement where the person has

resided outside Canada for at least 2 consecutive calendar years and satisfies the

prescribed requirements.

A BILL

AN ACT TO AMEND THE PENSION BENEFITS ACT,

Analysis

S.2 Amdt.

Definitions

Ss. 44.1 & 44.2 Added

44.1 Withdrawal financial hardship

44.2 Withdrawal non-resident

Commencement

Be it enacted by the Lieutenant-Governor and

House of Assembly in Legislative Session convened, as follows:

SNL1996 cP-4.01

as amended

Section 2 of the Pension Benefits Act, 1997 is amended by adding immediately after paragraph

(dd.1) the following:

(dd.2) "principal residence" means the

property in which a person is ordinarily resident;

2. The Act is amended by adding immediately after

section 44 the following:

Withdrawal

financial hardship

44.1

(1) A

former member or a surviving principal beneficiary of a member or former member

who has transferred the commuted value of his or her pension benefit to a class

or type of retirement savings arrangement approved by the superintendent may,

in accordance with this section, make a withdrawal from the retirement savings

arrangement where he or she

(

a) is experiencing a circumstance of financial

hardship prescribed in subsection (3); and

(

b) provides the documentation prescribed in the

regulations.

(2) A person referred to in subsection (1) may withdraw

an amount not exceeding an amount prescribed in subsection (4) from each

retirement savings arrangement owned by the person once within a calendar year

for each circumstance of financial hardship.

(3) For the purpose of subsection (1), a person

referred to in subsection (1) is experiencing a circumstance of financial

hardship where

(

a) the person's expected total income for the one

year period following the date on which the person seeks to make the withdrawal

is not more than 66.66% of the YMPE for the year in which the person seeks to

make the withdrawal;

(

b) the person is unable to pay for medical

expenses incurred or to be incurred by the person, the person's principal

beneficiary or a dependent of either and the medical expenses are not paid by

and are not subject to reimbursement from any other source;

(

c) the person is unable to pay for disability

related expenses incurred or to be incurred by the person, the person's

principal beneficiary or a dependent of either and the expenses are not paid by

and are not subject to reimbursement from any other source;

(

d) the person or the person's principal

beneficiary has received a written notice in respect of a default on a mortgage

that is secured against the principal residence of the person or the person's

principal beneficiary and there is a risk of foreclosure or power of sale if

the default is not rectified;

(

e) the person or the person's principal

beneficiary has received a written notice in respect of arrears in the payment

of rent for the principal residence of the person or the person's principal

beneficiary and the person or the principal beneficiary could be evicted if the

arrears remain unpaid; or

(

f) the person is unable to pay the first month's

rent and the security deposit required to rent a principal residence for the

person or his or her principal beneficiary.

(4) For the purpose of subsection (2), the prescribed

amount is the total of

(

a) the amount for the applicable circumstance of

financial hardship as follows:

(

i) for a circumstance referred to in paragraph (3)(a),

the amount determined by subtracting 75% of the expected total income referred

to in paragraph (3)(

a) from 50% of the YMPE for the year in which the person

seeks to make the withdrawal,

(ii) for a circumstance referred to in paragraph (3)(b),

the amount required to pay the medical expenses incurred or to be incurred in

the one year period following the date on which the person seeks to make the

withdrawal,

(iii) for a circumstance referred to in paragraph (3)(c),

the amount required to pay the disability related expenses incurred or to be

incurred in the one year period following the date on which the person seeks to

make the withdrawal,

(iv) for a circumstance referred to in paragraph (3)(d),

the amount required to rectify the default,

(

v) for a circumstance referred to in paragraph (3)(e),

the amount required to pay the rental arrears, and

(vi) for a circumstance referred to in paragraph (3)(f),

the amount required to pay the first month's rent and the security deposit; and

(

b) the amount of any applicable withholding tax.

(5) Notwithstanding subsection (1), a person

referred to in subsection (1) is not entitled to make the withdrawal and the savings

institution or insurance company shall not allow the withdrawal unless

(

a) the person confirms in writing that he or she

has been advised of and understands the impacts of making the withdrawal as set

out in a directive of the superintendent; and

(

b) where the person is a former member and has a

principal beneficiary, the principal beneficiary consents to the withdrawal in

the form and manner determined by the superintendent.

(6) A savings institution or insurance company

that has filed with the superintendent a specimen contract for a retirement

savings arrangement that complies with this Act and the regulations shall

submit a report to the superintendent in accordance with subsection (7) stating

(

a) the number; and

(

b) the total amount,

of the

withdrawals that were made under this

section for each circumstance of

financial hardship during the period of the report.

(7) A report referred to in subsection (6) shall

be submitted on or before

(

a) September 30 each year for the 6 month period

ending on June 30; and

(

b) March 31 each year for the 6 month period

ending on December 31 of the previous year.

Withdrawal non-resident

44.2

(1) A

former member or a surviving principal beneficiary of a member or former member

who has transferred the commuted value of his or her pension benefit to a class

or type of retirement savings arrangement approved by the superintendent may

withdraw the full amount held in the retirement savings arrangement where he or

she

(

a) has resided outside Canada for at least 2

consecutive calendar years; and

(

b) provides the documentation prescribed in the

regulations.

(2) Notwithstanding subsection (1), where the

person is a former member and has a principal beneficiary the person is not

entitled to make the withdrawal and the savings institution or insurance

company shall not allow the withdrawal unless the principal beneficiary consents

to the withdrawal in the form and manner determined by the superintendent.

Commencement

3. This Act comes into force on March 1, 2021.

Queen's Printer