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1998/99 Legislative Session: 3rd Session, 36th Parliament

FIRST READING

The following electronic version is for informational purposes only.

The printed version remains the official version.

HONOURABLE JOY K. MacPHAIL

MINISTER OF FINANCE AND CORPORATE RELATIONS

BILL 95 – 1999

PUBLIC SECTOR PENSION PLANS ACT

. . . continued . . .

Schedule B

Municipal Pension Plan

Definitions

1 In this Schedule:

"board" means the Municipal Pension Board

established under

section 3;

"investment management corporation" has the same

meaning as in

section 1 (1) of the Act;

"partners" means the plan employer partner and

the plan member partner;

"pension corporation" has the same meaning as in

section 1 (1) of the Act;

"pension fund" means the Municipal Pension Fund

continued under

section 9;

"pension plan" means the Municipal Pension Plan

continued under

section 2 (1);

"pension plan rules" means the regulations made

under

section 16 (1);

"plan administrator" means the pension

corporation;

"plan employer partner" means the government of

British Columbia, the municipal governments, including regional districts, as represented

by the Union of British Columbia Municipalities, and health sector employers as

represented by the Health Employers Association of British Columbia;

"plan member" has the same meaning as in

section

1 (1) of the Act;

"plan member partner" means the Municipal

Employees' Pension Committee which represents

(

a) the British Columbia Nurses' Union,

(

b) the Canadian Union of Public Employees,

(

c) the Health Sciences Association of British Columbia,

(

d) the Hospital Employees' Union,

(

e) the British Columbia Federation of Police Officers,

(

f) the British Columbia Professional Fire Fighters' Association,

and

(

g) the other unionized plan members.

Part 1 – Municipal Pension Plan

Municipal Pension Plan continued

(1) The plan provided for by and under the Pension

(Municipal) Act is continued as the Municipal Pension Plan under this

Schedule and the

pension plan rules.

(2) An employer to whom the Pension (Municipal) Act applied

immediately before the coming into force of this section, continues to be an employer, and

those eligible employees of that employer continue to be plan members, under the Municipal

Pension Plan.

(3) A person who, immediately before the coming into force of this

section, was a plan member under the Pension (Municipal) Act continues to be a plan

member under the Municipal Pension Plan.

(4) Any rights vested in each plan member or beneficiary under the

plan provided for by and under the Pension (Municipal) Act continue to apply to the

plan member or beneficiary, in the same manner and to the same extent, under the Municipal

Pension Plan.

(5) The fiscal year end of the pension plan is December 31, or any

other date that the board may establish as the fiscal year end for the pension plan.

Municipal Pension Board established

(1) There is established a Municipal Pension Board

comprising 13 members appointed by the Lieutenant Governor in Council as follows:

(a) 4 persons nominated by the government and 2 persons nominated

by the Union of British Columbia Municipalities, to be known as the plan sponsor

representatives;

(b) 6 persons nominated by the Municipal Employees' Pension

Committee, to be known as the plan member representatives;

(

c) one person nominated by the government and designated in the

appointment as chair of the board.

(2) A party that makes a nomination under subsection (1) may

nominate an alternate person and, if the member appointed under subsection (1) is unable

to act, that alternate person, upon appointment by the Lieutenant Governor in Council, is

authorized to act in the first appointee's place.

(3) Each member appointed under subsection (1) (

a) and (

b) or (2)

has one vote.

(4) An appointment to the board may be made for a term not

exceeding 2 years, and the appointment may be renewed or extended.

(5) An appointment to the board may, on the recommendation of the

party that nominated the member, be rescinded by the Lieutenant Governor in Council.

(6) The chair of the board is the trustee of the pension fund.

(7) The board must determine whether the chair has a vote and, if

so, whether the chair is entitled to a second or casting vote.

(8) Subject to subsections (9) and (10), a quorum of the board is

a majority of the members of the board.

(9) A quorum requires

(

a) one representative of the government,

(

b) one representative of the Union of British Columbia

Municipalities, and

(c) 2 representatives of the Municipal Employees' Pension

Committee.

(10) The board may, by unanimous agreement of all of the members

of the board, change a requirement of subsection (8) or (9).

(11) Each member of the board must be a permanent resident of

Canada.

(12) The board may, from the pension fund, pay

(

a) to a member of the board or a person appointed to a committee

of the board an allowance for reasonable travel and other expenses necessarily incurred in

carrying out the business of the board,

(

b) to a member of the board or a person appointed to a committee

of the board, if the member or person is not receiving remuneration from any other source

for acting as a member or on a committee, remuneration that has been set by the board and

is consistent with Treasury Board guidelines, and

(

c) to an organization, if the organization is the source of

remuneration paid to a member of the board or person appointed to a committee of the

board, remuneration for the services of the member or person at the rate set by the board

under paragraph (b).

Legal capacity of the board

(1) For the purposes of this Schedule, the board may

(

a) retain the services of persons, and

(

b) enter into agreements.

(2) The board has the necessary legal capacity to sue and be sued

in its own name for the purposes of a matter arising under this

Schedule or the pension

plan rules.

(3) The board, on behalf of the pension fund, may recover and

enforce contributions, deductions and any interest payments that should have been made or

are due to the pension fund by action in any court in the name of the board as a debt due

to the board and, in that case, the Limitation Act does not apply.

Powers, functions and duties of the board

(1) The board is responsible for the administration of

the pension plan.

(2) The board must do all of the following:

(

a) subject to Treasury Board approval respecting any of the

matters described in subsection (3) (b), make recommendations to the Lieutenant Governor

in Council respecting the pension plan rules, or any amendments to the pension plan rules,

made under

section 16;

(

b) submit to Treasury Board and to the minister an annual report

on the operation of the board, the pension plan and the pension fund;

(

c) review reports on the investment of the pension fund;

(

d) direct the plan administrator respecting

(

i) the application of the pension plan rules,

(ii) the negotiation of agreements on behalf of the board with a

person, class of persons or body, including agreements which may differ from the pension

plan rules, respecting

(

A) portability of pension benefits,

(

B) pension-based early retirement incentive programs,

(

C) continuation of pension plan membership in the case of

employer merger or reorganization,

(

D) provision of benefits in addition to those provided for in the

pension plan rules,

(

E) reporting requirements on behalf of employers under the Income

Tax Act (Canada), and

(

F) any other agreements the board considers to be advisable, and

(iii) the implementation of any agreements entered into by the

board;

(

e) establish the practice and procedure for appeals to the board;

(

f) approve, in whole or in part and with or without

modifications, the annual budget for pension administration and investment activities;

(

g) carry out other prescribed duties and responsibilities.

(3) The board may do any of the following:

(

a) make recommendations to the minister respecting amendments to

this

Schedule and, before enactment, review any amendments to this Schedule;

(

b) make recommendations to Treasury Board respecting

(

i) changes in benefits,

(ii) funding policies for the pension plan,

(iii) contribution rates, and

(iv) modifications to the pension plan;

(

c) make recommendations to the Minister of Finance and Corporate

Relations and the trustee respecting the investment of the pension fund;

(

d) report to plan members on issues related to the pension plan;

(

e) establish rules, procedures and methods for board operations.

(4) The board may

(

a) pass resolutions it considers necessary or advisable to manage

and conduct its own affairs and to exercise the board's powers and perform its duties,

(

b) establish committees or panels of the board, and may determine

the composition, duties, responsibilities, limitations and operating procedures of those

committees or panels,

(

c) appoint persons other than members of the board to a committee

or panel referred to in paragraph (b), and may set the term of appointment to the

committee or panel that applies to those persons,

(

d) nominate members of the board to the boards of the pension

corporation and the investment management corporation, and

(

e) rescind an appointment made under paragraph (c).

Plan administration and investment

(1) The board must retain the services of the pension

corporation to carry out the board's responsibilities respecting the administration of the

pension plan.

(2) Subject to

section 12 (2), the trustee may retain the services

of the investment management corporation to carry out the trustee's responsibilities

respecting the investment of the assets of the pension fund.

(3) The trustee must ensure that the plan administrator keeps

(

a) an account of all money received and paid out of the pension

fund,

(

b) an account of the assets and liabilities of the pension fund,

and

(

c) an individual record of contributions made by each plan

member.

Appeals to the board

(1) A person or organization directly affected by a

decision of the plan administrator in the application of the pension plan rules may, by

written notice to the board, appeal all or part of the decision in accordance with the

practice and procedure for appeals to the board.

(2) The board must ensure that each appeal is dealt with promptly

and efficiently.

(3) The board may establish a panel consisting of one or more

persons, as determined by the chair, to consider appeals.

(4) If a panel consists of more than one person, the chair must

preside over the panel or designate the person who is to chair the panel.

(5) For an appeal referred to a panel,

(

a) the panel has all the jurisdiction and may exercise the powers

and perform the duties of the board, and

(

b) a decision or order of the panel is a decision or order of the

board.

(6) The board or panel must confirm, vary or reverse the decision,

order or ruling being appealed.

(7) For the purposes of this section, the board and each

of its members, or a panel of the board and each person on the panel, has the

powers, protection and privileges of a commissioner under sections 12, 15 and

16 of the Inquiry Act .

Indemnification

(1) The pension fund may indemnify a person who is a

member of the board or a person appointed to a committee or a panel under

section 5 (4)

(c), or a former member of the board or committee or panel member, against all costs,

charges and expenses actually and reasonably incurred by the person, including an amount

paid to settle an action or 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

board member or committee or panel member, and including an action brought by the board,

(

a) the board member or committee or panel member acted in good

faith, and

(

b) in the case of a criminal action or proceeding, the board

member or committee or panel member had reasonable grounds for believing that his or her

conduct was lawful.

(2) The board may purchase and maintain, for the benefit of the

board or a board member or committee or panel member referred to in subsection (1), or any

of them, insurance against liability incurred by the board or by the board member or

committee or panel member.

Municipal Pension Fund continued

(1) The Municipal Pension Fund continued under the

Pension (Municipal) Act is continued under this Schedule.

(2) The pension fund consists of the cash, investments and other

assets held by the trustee.

(3) The contributions from the employers and plan members and the

net income from investments and other sources must be paid into the pension fund.

(4) Benefits and disbursements payable under this

Schedule and the

pension plan rules must be paid from the pension fund and, for this purpose, the pension

fund must be considered one and indivisible.

(5) The following fees, expenses and disbursements, as are

reasonably necessary and approved by the board, must be paid from the pension fund:

(

a) the fees, expenses and disbursements of the board incurred in

administering the pension plan;

(

b) the fees, expenses and disbursements of the trustee with

respect to the pension fund;

(

c) the fees, expenses and disbursements of, and amounts

requisitioned by, the pension corporation and the investment management corporation, or

other investment managers, to operate and administer the pension plan and to manage the

pension fund;

(

d) any other expenses incurred in the administration of this

Schedule and the pension plan rules.

Financial administration

10 The trustee must provide for the financial

administration of the pension plan by

(

a) establishing an accounting system which ensures that there is

proper reporting and accountability to the board in a timely manner and at a reasonable

cost,

(

b) having annual financial statements of the pension plan

prepared in accordance with generally accepted accounting principles,

(

c) having an audit performed on the financial statements referred

to in paragraph (b), and

(

d) providing to the Minister of Finance and Corporate Relations

an annual report on the pension plan, including the audited financial statements.

Investments and records

(1) The plan administrator must advise the trustee of

the sums of money available for investment.

(2) The trustee must keep accounts and records in a form specified

by the Minister of Finance and Corporate Relations.

Investment by trustee

(1) The trustee must cause all money available for

investment to be invested in accordance with subsection (2).

(2) The trustee may

(

a) subject to the prior approval in writing of the Minister of

Finance and Corporate Relations,

(

i) invest the money in investments permitted for a pension

plan registered in compliance with the Pension Benefits Standards Act ,

(ii) exchange an investment made under subparagraph (

i) for

another investment permitted under that subparagraph, and

(iii) realize an investment held under this paragraph, or

(

b) place the money with the investment management corporation for

funds management services.

Appointment of an actuary

(1) The board must engage the services of an actuary for

the purposes of this

Schedule and the pension plan rules.

(2) The actuary must

(

a) make all actuarial reports and computations required by the

board,

(

b) make actuarial valuations of assets and liabilities under this

Schedule and the pension plan rules when requested by the board, and

(

c) report to the board the results of each actuarial valuation.

(3) Despite subsection (2) (b), actuarial valuations must be made

at least once in each 3 year period.

(4) An amount paid to the actuary for his or her services is an

expense incurred in the administration of this

Schedule and the pension plan rules.

Appointment of an auditor

(1) At least once in each year the financial statements

of the pension plan, including the accounts of the board and the trustee, must be audited

by the Auditor General or by an auditor appointed by the Lieutenant Governor in Council

for that purpose.

(2) The salary or remuneration of an auditor appointed by the

Lieutenant Governor in Council must be paid by the government.

Surplus or unfunded liability

(1) If an actuarial valuation, completed by an actuary

in accordance with the requirements of

section 13, discloses that

(

a) there has been an increase in the unfunded actuarial liability

for the pension plan when measured on a statutory basis as a percentage of payroll, and

(

b) the increase has occurred since the immediately preceding

actuarial valuation,

then additional employer contributions determined by the actuary

as sufficient to

(

c) meet the normal costs of the pension plan,

(

d) hold the unfunded actuarial liability constant as a percentage

of payroll, and

(

e) amortize the identified increase in the unfunded actuarial

liability over a period not exceeding 15 years

must be paid to the pension fund in a manner prescribed by the

Lieutenant Governor in Council.

(2) If an actuarial valuation, completed by an actuary in

accordance with the requirements of

section 13, discloses that

(

a) a surplus has been created or an existing surplus has been

increased, and

(

b) the surplus or the increase has occurred since the immediately

preceding actuarial valuation,

then employer contributions may be reduced by the amount

determined by the actuary as sufficient to amortize the identified surplus or increase

over a period of at least 15 years.

Regulations establishing the pension plan rules

(1) The Lieutenant Governor in Council may, on the

recommendation of the board, make regulations, applicable generally or to a specified

person or class of persons, prescribing the pension plan rules, including, without

limitation, regulations as follows:

(

a) respecting the pension fund, the funding for and payment from

different accounts and the establishment of different accounts for different purposes

within the pension fund, including

(

i) an account for basic pension benefits provided within

the Income Tax Act (Canada) maximums for a registered pension plan,

(ii) an account for pension indexing,

(iii) an account for supplemental benefits not paid from the other

accounts, and

(iv) an account for retirement annuities;

(

b) governing employer and employee eligibility to participate in

the pension plan, including any information required to establish the status of employers

and the enrollment of particular employees as members, and providing for continuity of

service on transfer between different employers, and providing differently for different

employee groups;

(

c) prescribing employer and plan member contributions to the

pension fund, including

(

i) prescribing different rates for different circumstances, and

the timing and reporting of contributions,

(ii) prescribing what constitutes the salary of a plan member for

the purposes of determining contributions,

(iii) imposing restrictions on access to amounts contributed to

the pension fund and interest on those amounts, including restrictions on demanding or

enforcing payment, and

(iv) prescribing contribution limits;

(

d) respecting pensionable service, including

(

i) prescribing requirements for calculating annual service

accrual for full time and less than full time employment,

periods of short term and long term disability, and

(iii) restricting recognition of pensionable service on partial

payment of arrears;

(

e) respecting contributory service, including

(

i) prescribing requirements for calculating service accrual for

full time and less than full time employment,

periods of short term and long term disability,

periods of child rearing, and

(iv) recognition of contributory service on payment or partial

payment of arrears;

(

f) respecting the purchase of service, including specifying the

periods of

(

i) leave of absence,

(ii) service that can be reinstated,

(iii) service during which the plan member was not eligible to

make contributions or elected not to make contributions, and

(iv) any other service approved by the board, including service

with any employer, whether or not the employer is an employer under this Schedule;

(

g) prescribing the earliest retirement age, pensionable age,

normal retirement age or latest retirement age applicable to any plan member or group or

class of plan members;

(

h) respecting benefits, including

(

i) the eligibility and entitlement to receive a benefit and the

criteria and methods for determining a benefit,

(ii) the calculation of the highest average salary,

(iii) the calculation of the benefit amount on termination of

membership, pre-retirement death, disability retirement, early retirement, normal

retirement, late retirement, shortened life expectancy and death, and prescribing

available options for receiving pension benefits,

(iv) the nature of a benefit, whether pre-retirement, on

retirement or post retirement, including spousal benefits, the protection of spousal

benefits, the nomination of beneficiaries, a change of beneficiaries or benefit selection,

minor beneficiaries, spousal waivers and the nomination of a beneficiary on marriage

breakdown,

(

v) post retirement group benefits, and the type and level of

funded, and how and by whom they are funded, and

(vi) supplemental benefits, including

(

A) benefit calculations and available options for receipt

of those benefits with reference to the Income Tax Act (Canada),

provided, funded and paid, and by whom they are funded, and

(

C) the indexing of supplemental benefits;

including

(

i) the eligibility and entitlement to receive indexing and the

criteria and methods for determining indexing, and

(ii) determining the highest average salary for long term

disability, deferred pensions and pensions for members with less than full time

employment;

(

j) respecting the manner of making an application for, and the

granting or continuation of, benefits, supplemental benefits and disability benefits,

including the information required and the form of proof required for that information;

(

k) respecting applications for monthly pension benefits,

including

(

i) requirements for filing applications,

(ii) the effective date for monthly pension benefits on late

filing of applications, and

(iii) exceptions for persons incapable of managing their affairs

or other sufficient reason;

(

l) respecting the requirements for filing written agreements and

court orders made under Parts 5 and 6 of the Family Relations Act , or similar

orders of a court outside British Columbia that are enforceable in British Columbia and,

in case of late filing, whether or not adjustments are required;

(

m) respecting the methodology and assumptions for any

calculations required to administer the pension plan;

(

n) establishing general administrative requirements and imposing

administrative obligations on employers;

(

o) prescribing administrative penalties or the payment of

interest by employers, plan members or the pension plan in the case of delay or

noncompliance;

(

p) exempting a person or class of persons, or allowing the board

to exempt a person or class of persons, with or without conditions, from any provision of

the pension plan or pension plan rules;

(

q) defining any word or expression used in this

Schedule or in

the regulations;

(

r) providing for any matter necessary or advisable to carry out

effectively the intent and purposes of this Schedule.

(2) In making a regulation under this Schedule, the Lieutenant

Governor in Council may delegate a matter to a person or the board and confer a

discretionary power on a person or the board.

(3) The Lieutenant Governor in Council may, on the recommendation

of the board, amend, repeal or replace the pension plan rules made under subsection (1).

Application of pension plan rules

17 The following conditions apply to, and are deemed to be

included in, the pension plan rules:

(

a) if, on the death of a plan member, a benefit becomes payable

(

i) the spouse of the plan member if there is a spouse and a valid

spousal waiver has not been filed with the plan administrator, or

(ii) the person nominated by the plan member as beneficiary if

there is no spouse or a valid spousal waiver has been filed with the plan administrator,

the amount

(iii) is not subject to the control of the creditors of the

deceased plan member, and

(iv) does not form part of the estate of the plan member;

(

b) if, on the death of a plan member, a benefit becomes payable

to his or her estate or to the personal representative of the deceased plan member, the

benefit forms part of the estate of the plan member and is subject to the control of the

creditors;

(

c) if, on the death of a plan member, a benefit becomes payable

to a minor, the benefit must be paid to the Public Trustee, in trust for the minor, for

payment to the minor on reaching the age of 19 years;

(

d) a pension or refund of any amount to the credit of any plan

member in the pension fund may not be assigned, charged, attached, anticipated or given as

security, and any instructions purporting to assign, charge, attach, anticipate or give as

security a pension or refund are void;

(

e) nothing in the pension plan impairs or affects the rights of

an employer to remove or dismiss a person from service.

Part 2 – Joint Trusteeship

Joint management agreement

(1) In this

section "agreement" means the joint management agreement

referred to in subsection (2).

(2) The partners may enter into a unanimous joint management

agreement that provides for, but is not limited to, all of the following:

(

a) the continuation of the pension plan and pension fund for the

benefit of plan members;

(

b) the joint management of the pension plan and the pension fund;

(

c) establishing who will manage the agreement;

(

d) the establishment of an arrangement to hold and invest the

pension fund;

(

e) the composition of the board of trustees of the pension plan,

including the appointment of trustees and the delineation of their powers, functions and

duties;

(

f) the sharing by employers and plan members of gains or surplus

and of liability for deficiencies in the pension fund;

(

g) the method for amending the pension plan by the agreement of

the partners;

(

h) the resolution of disputes;

(

i) any other matter on which agreement is reached.

(3) The partners must establish appropriate mechanisms whereby the

views and interests of the plan members who are

(

a) non-unionized employees, and

(

b) retirees,

are fairly represented in the negotiation of the agreement.

(4) The pension plan continued under the agreement must provide

for all of the following:

(

a) employer and employee eligibility to participate in the

pension plan;

(

b) employer and plan member contributions to the pension fund;

(

c) pensionable service, including the calculation of pensions,

purchase of service, reinstatement and portability;

(

d) eligibility to receive a benefit and the determination of the

amount of that benefit;

(

e) benefits on termination, early retirement, normal retirement,

late retirement, disability retirement and pre-retirement death;

(

f) post retirement group benefits;

(

g) pension indexing;

(

h) general administrative requirements;

(

i) supplemental benefits;

(

j) continued recognition of any rights vested in a plan member or

beneficiary, in the same manner and to the same extent as provided under the pension plan;

(

k) any matter necessary or advisable to establish the pension

plan rules, including those matters described in

section 16 (1).

(5) The partners must ensure that

(

a) the money of the pension fund is invested or loaned in the

best financial interests of the plan members and, in doing that, must

(

i) exercise the care, diligence and skill that a person of

ordinary prudence would exercise when dealing with the property of another person, and

(ii) ensure that the investments and loans are made in accordance

with the provisions of the Pension Benefits Standards Act and other regulatory

requirements,

(

b) the plan administrator keeps an account of all money received

and paid out of the pension fund and keeps an accounting of the assets and liabilities of

the pension fund, and

(

c) the plan administrator keeps an individual record of

contributions made by each plan member.

(6) Either of the partners may initiate discussions respecting the

agreement.

(7) Despite subsection (2), the non-unionized employees and the

retirees not represented by the partners may benefit from and be subject to the agreement

and the partners have the power to enter into the agreement on behalf of those persons

and, if entered into, the agreement is binding on those persons.

Part 3 – Transitional

Transitional – validation of existing

calculations

19 All benefit calculations based on the rules that were in

effect at the time of the calculation under the Pension (Municipal) Act and the

regulations to that Act are deemed to have been validly made for the purposes of this

Schedule.

Transitional – agreements

20 This

Schedule continues to apply to all agreements made

under the Pension (Municipal) Act that were in effect on the date of the repeal of

that Act, as if those agreements had been made by the board under the authority of this

Schedule.

Transitional – regulations

21 The Lieutenant Governor in Council may, on the

recommendation of the board, make regulations that are necessary or advisable for meeting

or removing any difficulty arising out of the transition from the Pension (Municipal)

Act repealed by this Act, and for preserving and giving effect to the rights of all

persons accrued or accruing under the Pension (Municipal) Act except as those

rights are expressly varied by this Schedule, and the regulations may be made to apply

generally or to a particular case.

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