British Columbia Gazette Part II — B.C. Reg. 131/2004
B.C. Reg. 131/2004
British Columbia — Gazette
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Volume 47, No. 7
B.C. Reg. 131/2004
The British Columbia Gazette,
Part II
April 6, 2004
B.C. Reg. 131/2004, deposited March 26, 2004, pursuant
to the PENSION BENEFITS STANDARDS ACT [Section 74]. Order in
Council 300/2004, approved and ordered March 25, 2004.
On the recommendation of the undersigned, the Lieutenant Governor,
by and with the advice and consent of the Executive Council, orders that, effective
April 1, 2004, the Pension Benefits Standards Regulation, B.C. Reg. 433/93,
is amended as set out in the attached Appendix.
— G. COLLINS, Minister
of Finance; K. FALCON, Presiding Member of the Executive Council.
Appendix
Section 3 of B.C. Reg. 433/93, the Pension Benefits Standards Regulation, is amended by adding the following subsection:
(13) If a pension plan provides payments of pension benefits
similar to the method of payments available from a life income fund, those payments
are exempt from the application of
section 30 (1) of the Act provided
the plan complies with the requirements of
section 30.1 of this regulation.
Section 29 is amended by adding the following subsections:
(9.2) A former member who is the owner of a contract
is exempt from
section 30 of the Act and the requirements of subsections (2),
(4), (7) (a), (
b) and (
e) to (h), and (10) to (13) of this
section, and the contract is deemed to be amended to provide for such an exemption,
if the balance of the contract does not exceed 20% of the Year's Maximum Pensionable
Earnings.
(9.3) A contract for which the balance of the contract exceeds 20% of the Year's Maximum Pensionable Earnings must not be divided into two or more of any combination of RRSP or life income fund contracts, such that any of the contracts have a resulting balance less than 40% of the Year's Maximum Pensionable Earnings.
(14.1) If the money in the contract has been held during
the current year in a life income fund governed by this regulation, an underwriter
must not effect a transfer to another underwriter unless the transferring underwriter
has advised the transferee underwriter in writing
(
a) that the funds had been held under a life income
fund governed by this regulation, and
(
b) the date on which the funds were transferred out of that life income fund.
Section 30 is amended
(
a) in subsection (1) by adding the following
definitions:
"preceding year's investment returns" means the value of the contract at the end of the immediately preceding fiscal year, minus the value of the contract on the first day of that fiscal year, plus any money paid out of the contract during that fiscal year, minus any money transferred into the contract during that fiscal year;
"reference rate" means the greater of
(
a) the month-end nominal rate of interest earned on
preceding the year of the valuation, as compiled by Statistics Canada and published
in the Bank of Canada Banking and Financial Statistics as CANSIM Series B14013,
to which the following adjustments are applied successively to that nominal
rate:
(
i) an increase of 0.5%;
(ii) the conversion of the increased rate, based on interest compounded semi-annually, to an effective annual rate of interest;
(iii) the rounding of the effective interest rate to
the nearest multiple of 0.5%, and
(
b) a rate of 6%;
"value of the contract" means the market
value of the investments held under a contract plus any cash balances held under
the contract, including any earnings accrued but not yet received, any declared
dividends not yet received, and any other accrued or receivable income items,
whether or not the particular item is yet due and owing; ,
(
b) by adding the following subsection:
(5.1) A LIF appearing on the superintendent's list established
under subsection (3) on December 31, 2003, must either meet the
requirements of this
section no later than December 31, 2004, or be
removed from the list. ,
(
c) in subsection (8) by repealing paragraph (
a) and substituting the following:
(
a) subject to paragraph (
b) and subsection (10), all
money, including all investment earnings, is to be used to provide or secure
pension benefits as required by the Act and this regulation; ,
(
d) in subsection (8) by repealing paragraphs (
b) to (
d) and substituting the following:
(
b) the owner will be permitted to transfer all or part of the balance of the contract
(
i) to an underwriter's LIF contract on the relevant conditions specified in this section,
(ii) to an underwriter's RRSP contract on the relevant
conditions specified in
section 29,
(iii) to a pension plan on the conditions referred to
section 33 (2) (
a) of the Act,
(iv) to purchase a deferred life annuity contract that
meets the conditions of paragraphs (
k) and (k.1), or
(
v) to purchase an immediate life annuity contract; ,
(
e) in subsection (8) by repealing paragraph (
k) and substituting the following:
(
k) on the death of an owner who has a spouse, the money
will be used to provide a pension for the surviving spouse unless the surviving
spouse waives spousal entitlement in the form and manner set out in Form 4
of
Schedule 2, and the money must be transferred
(
i) to another LIF contract on the relevant conditions specified in this section,
(ii) to an underwriter's RRSP contract on the relevant
conditions specified in
section 29,
(iii) to a pension plan on the conditions referred to
section 33 (2) (
a) of the Act, or
(iv) to purchase a life annuity contract; ,
(
f) in subsection (8) by adding the following paragraph:
(k.1) if the owner dies and is not survived by a spouse
or the surviving spouse waives spousal entitlement in the form and manner set
out in Form 4 of
Schedule 2, the money will be paid by way of a lump
sum payment to the designated beneficiary or, if there is no valid designation
of beneficiary, to the owner's estate; ,
(
g) in subsection (8) by repealing paragraph (
q) and substituting the following:
(
q) the amount of income paid during a fiscal year of
the contract will not be less than the minimum amount required to be paid under
the Income Tax Act (Canada) and the regulations under the Income Tax
Act (Canada), if there is a minimum amount, and will not exceed the greater of
(
i) M as determined in accordance with the following formula:
M = C x F
where
C = the balance of money in the contract on the first day of the year, and
F = the factor in
Schedule III for the reference rate for the year and the owner's age at the end of the preceding year, and
(ii) the preceding year's investment returns for the contract, if there was a preceding year; ,
(
h) in subsection (8) by repealing paragraphs (
r) and (v),
(
i) in subsection (8) (
u) by striking out ", with paragraph (
r) applying",
(
j) in subsection (8) (
w) by striking out "paragraphs (q), (r), (
s) and (v)"
and substituting "paragraphs (
q) and (s)", and
(
k) by adding the following subsections:
(8.1) Despite subsections (8) and (13), a savings institution
or insurance company may issue to an owner during 2004 a contract that does
not comply with this section, provided that
(
a) the contract complies with this
section as it read immediately prior to the coming into force of this subsection,
(
b) the name of the contract appears on the list maintained
by the superintendent under subsection (3),
(
c) the contract issued to the owner is in the form of
a specimen contract, as amended if applicable, that has received the written
approval of the superintendent, and
(
d) the contract issued to the owner is subsequently
amended to comply with this section, or terminated, by December 31, 2004.
(8.2) A contract that was entered into under this section,
as it read prior to the coming into force of this subsection, and that has not
been terminated must be amended to comply with this
section by December 31, 2004.
(8.3) Despite subsections (8) (q), (12) (a), (13) and
the terms of a contract, an underwriter may permit the owner of a contract to
receive an amount of income during the 2004 fiscal year of the contract that
does not comply with subsection (8) (q), provided that the amount
of income
(
a) complies with subsection (8) (
q) as it read immediately
prior to the coming into force of this subsection, or
(
b) does not exceed the preceding year's investment returns
for the contract, if there was a preceding year.
(10.2) A former member who is the owner of a contract
is exempt from
section 30 of the Act and the requirements of subsections (2),
(5), (8) (
a) and (
g) to (j), (11) and (13) to
(16) of this section, and the contract is deemed to be amended to provide for such
an exemption, if the balance of the contract does not exceed 20 per cent
of the Year's Maximum Pensionable Earnings.
(10.3) A contract for which the balance of the contract
exceeds 20 per cent of the Year's Maximum Pensionable Earnings must
not be divided into two or more of any combination of RRSP or life income fund
contracts, if any of the contracts would have a resulting balance less than
40 per cent of the Year's Maximum Pensionable Earnings.
(17.1) An underwriter must not effect a transfer to another underwriter unless the transferring underwriter has advised the transferee underwriter in writing
(
a) that the funds had been held under a LIF contract
governed by this regulation, and
(
b) the date on which the funds were transferred out
of the LIF.
4 The following
section is added:
Life income fund type payments from pension plans
30.1
(1) A pension plan may provide for payments of pension
benefits similar to the method of payments available from a life income fund,
provided that
(
a) the payments are permitted under the Income Tax Act (Canada) and the regulations under the Income Tax Act (Canada),
(
b) the plan text contains provisions governing the payments, including the amount of income paid during a year,
(
c) if the member or former member had a spouse at the
date the payments commenced, the written consent of the spouse had been obtained,
before the payments commenced, in the form and manner set out in Form 3
of
Schedule 2,
(
d) the amount of income paid to a member or former member
during a calendar year meets the requirements of
section 30 (8) (
q) as if the member or former member's pension entitlement from which the payments
are being derived was being operated as a life income fund under
section 30,
(
e) the administrator, within 90 days of the beginning
of each calendar year, provides to the member or former member the information
described in
section 30 (12) (a), as if the member or former member's
pension entitlement from which the payments are being derived was being operated
as a life income fund under
section 30, and
(
f) the member or former member continues to have the
entitlements provided by
section 33 of the Act as long as the pension entitlement
from which the payments are being derived remains in the plan.
Schedule I is amended
(
a) in Column 1
(
i) of item 2 by striking out "Municipal Pension Plan
Regulation made under the Public Sector Pension Plans Act " and substituting
"Municipal Pension Plan Rules, made under the Municipal Pension Plan Joint Trust
Agreement, made under the Public Sector Pension Plans Act ",
(ii) of item 3 by striking out "Public Service Pension
Plan Regulation made under the Public Sector Pension Plans Act "
and substituting "Public Service Pension Plan Rules, made under the Municipal
Pension Plan Joint Trust Agreement, made under the Public Sector Pension
Plans Act ",
(iii) of item 4 by striking out "Teachers' Pension Plan
Regulation made under the Public Sector Pension Plans Act " and substituting
"Teachers' Pension Plan Rules, made under the Municipal Pension Plan Joint Trust
Agreement, made under the Public Sector Pension Plans Act ", and
(
b) in Column 2, opposite items 2 and 3 of Column 1,
by adding: "5.1
Section 33 (1) of the Act as it would otherwise
apply in relation to a member who terminates membership in the plan and is eligible
for an immediate pension".
Schedule 2 is amended by repealing Form 3 and substituting the following:
Form 3
(sections 30 (7)) and
(30.1) Spouse's Consent to Transfer Locked-in Pension Funds
to a LIF or To
Receive LIF Type Payments Directly from a Pension Plan
1 I, ..........................................................................................................................................................
am the "spouse" of (full name) ..................................................................................,
who is a member or former member of a pension plan regulated by the Pension
Benefits Standards Act of British Columbia.
2 Being the member or former member's "spouse" means that (check one)
I am married to the member or former member, and have not been living
separate and apart from that person for the preceding 2 years,
I have been living with the member or former member, as husband
and wife, for the preceding 2 years,
I am the same gender as, and have been living with, the member or
former member in a marriage-like relationship for the preceding 2 years.
3 I understand that my spouse wishes to transfer his/her pension benefit to
a Life Income Fund (a "LIF"), or to receive LIF type payments directly from
the pension plan, and that my written consent is required to enable my spouse
to do so.
4 I understand that
(
a) transferring the pension benefit to a LIF will allow
my spouse to manage his or her own pension fund money, and will allow some flexibility
in determining when the money is used,
(
b) the remaining funds in the LIF or in the pension
plan may be used to purchase a life annuity at any time, but there is no requirement
that the remaining funds be used to purchase a life annuity at any time, and
(
c) if the remaining funds are used to purchase a life
annuity, the life annuity must be a joint and last survivor annuity unless I
waive my entitlements by signing a separate spousal waiver form within 90 days
before the start of the annuity.
5 I further understand that before purchasing a life annuity, the LIF or the
pension plan as the case may be, will allow my spouse to withdraw some of the
money each year, subject to minimum and maximum withdrawal limits. The maximum
withdrawal limit is designed to try to ensure that sufficient money remains
to provide a lifetime income. I understand, however, that if
(
a) my spouse elects to withdraw the maximum amount permitted
each year, and/or
(
b) the investment performance of the fund is poor,
the level of pension income or survivor benefit available to me in later years may be significantly reduced.
6 Nevertheless, I consent to the transfer of locked-in funds to a LIF, or the receipt of LIF type payments directly from the pension plan, and certify that
(
a) I have read this form and understand it,
(
b) I have read the LIF transfer document and understand
it,
(
c) neither my spouse nor anyone else has put any pressure
on me to sign this form,
(
d) my spouse is not present while I am signing this
form,
(
e) I realize that
(
i) this form gives only a general description of the
legal rights I have under the Pension Benefits Standards Act and regulations, and
(ii) if I wish to understand exactly what my legal rights
are I must read the Pension Benefits Standards Act and regulations, and/or
seek legal advice, and
(
f) I realize that I am entitled to a copy of this consent form, and a copy
of the LIF contract.
7 To consent to the transfer, I sign this consent form at ..........................................................................................[ city ],
...................................................................... [ province ],
on .................................. [ date ]
............................................................................
Signature of Spouse
............................................................................
............................................................................
............................................................................
Address of Spouse
(home telephone number): .................................................
(work telephone number): ..................................................
STATEMENT OF WITNESS
I certify that
(
a) My full name is ............................................................................................
(
b) My address is ...............................................................................................
(
c) I witnessed this spouse sign this consent in the
absence of his/her spouse.
........................................................................... .................................
[ date )
Signature of Witness
(home telephone number): ................................................
(work telephone number): .................................................
Comments and Instructions
This form must be completed if a member or former member is eligible and wishes
to transfer locked-in money to a LIF under the Pension Benefits Standards Act
of British Columbia.
The form must be
completed in its entirety,
signed by the spouse outside of the immediate
presence of the member or former member and witnessed independently prior to
the transfer, and
filed with the pension plan administrator, RRSP
underwriter or LIF contract issuing company, as the case may be.
For further information please contact the plan administrator, underwriter,
your employer or union, or the Pensions Department of the Financial Institutions
Commission of British Columbia, 1050 Pender St. W., Suite 1900,
Vancouver, B.C., V6E 3S7.
7 The following
Schedule added:
Schedule 3 — Life Income Fund Factor F
(Section 30)
Reference Rate
Age
6.00%
6.50%
7.00%
7.50%
8.00%
8.50%
9.00%
9.50%
under 55
88 or over
0.061
0.064
0.065
0.065
0.066
0.067
0.067
0.068
0.069
0.070
0.071
0.072
0.073
0.074
0.076
0.077
0.079
0.081
0.083
0.085
0.088
0.091
0.094
0.098
0.103
0.108
0.115
0.121
0.129
0.138
0.148
0.160
0.173
0.189
0.200
0.063
0.067
0.067
0.068
0.069
0.069
0.070
0.071
0.072
0.073
0.074
0.075
0.076
0.077
0.078
0.080
0.082
0.084
0.086
0.088
0.091
0.094
0.097
0.101
0.106
0.111
0.117
0.124
0.132
0.140
0.151
0.163
0.176
0.191
0.200
0.066
0.070
0.070
0.071
0.071
0.072
0.073
0.074
0.074
0.075
0.076
0.077
0.079
0.080
0.081
0.083
0.085
0.087
0.089
0.091
0.094
0.097
0.100
0.104
0.109
0.114
0.120
0.127
0.134
0.143
0.153
0.165
0.179
0.194
0.200
0.069
0.073
0.073
0.074
0.074
0.075
0.076
0.077
0.077
0.078
0.079
0.080
0.082
0.083
0.084
0.086
0.088
0.089
0.092
0.094
0.097
0.100
0.103
0.107
0.111
0.117
0.123
0.129
0.137
0.146
0.156
0.168
0.182
0.197
0.200
0.072
0.076
0.076
0.077
0.077
0.078
0.079
0.079
0.080
0.081
0.082
0.083
0.085
0.086
0.087
0.089
0.091
0.092
0.095
0.097
0.099
0.102
0.106
0.110
0.114
0.119
0.125
0.132
0.139
0.148
0.159
0.171
0. l84
0.200
0.200
0.075
0.079
0.079
0.080
0.080
0.081
0.082
0.082
0.083
0.084
0.085
0.086
0.088
0.089
0.090
0.092
0.094
0.095
0.098
0.100
0.102
0.105
0.109
0.112
0.117
0.122
0.128
0.135
0.142
0.151
0.161
0.173
0.187
0.200
0.200
0.078
0.082
0.082
0.083
0.083
0.084
0.085
0.086
0.086
0.087
0.088
0.089
0.091
0.092
0.093
0.095
0.097
0.098
0.101
0.103
0.105
0.108
0.112
0.115
0.120
0.125
0.131
0.137
0.145
0.154
0.164
0.176
0.190
0.200
0.200
0.081
0.085
0.085
0.086
0.086
0.087
0.088
0.089
0.089
0.090
0.091
0.093
0.094
0.095
0.096
0.098
0.100
0.102
0.104
0.106
0.108
0.111
0.114
0.118
0.123
0.128
0.133
0.140
0.147
0.156
0.167
0.179
0.193
0.200
0.200
SCHEDULE 3 — LIFE INCOME FUND FACTOR F
(Section 30)
Age
10.00%
10.50%
11.00%
11.50%
12.00%
12.50%
13.00%
13.50%
under 55
88 or over
0.084
0.088
0.088
0.089
0.090
0.090
0.091
0.092
0.093
0.094
0.095
0.096
0.097
0.098
0.100
0.101
0.103
0.105
0.107
0.109
0.111
0.114
0.117
0.121
0.126
0.131
0.136
0.143
0.150
0.159
0.169
0.181
0.195
0.200
0.200
0.087
0.091
0.091
0.092
0.093
0.093
0.094
0.095
0.096
0.097
0.098
0.099
0.100
0.101
0.103
0.104
0.106
0.108
0.110
0.112
0.114
0.117
0.120
0.124
0.128
0.134
0.139
0.145
0.153
0.161
0.172
0.184
0.198
0.200
0.200
0.090
0.094
0.095
0.095
0.096
0.097
0.097
0.098
0.099
0.100
0.101
0.102
0.103
0.104
0.106
0.107
0.109
0.111
0.113
0.115
0.117
0.120
0.123
0.127
0.131
0.137
0.142
0.148
0.155
0.164
0.174
0.187
0.200
0.200
0.200
0.093
0.097
0.098
0.098
0.099
0.100
0.101
0.101
0.102
0.103
0.104
0.105
0.106
0.108
0.109
0.111
0.112
0.114
0.116
0.118
0.120
0.123
0.126
0.130
0.134
0.139
0.144
0.151
0.158
0.167
0.177
0.189
0.200
0.200
0.200
0.097
0.101
0.101
0.102
0.102
0.103
0.104
0.105
0.105
0.106
0.107
0.108
0.110
0.111
0.112
0.114
0.115
0.117
0.119
0.121
0.124
0.126
0.129
0.133
0.137
0.142
0.147
0.153
0.161
0.169
0.180
0.192
0.200
0.200
0.200
0.100
0.104
0.104
0.105
0.106
0.106
0.107
0.108
0.109
0.110
0.111
0.112
0.113
0.114
0.115
0.117
0.119
0.120
0.122
0.124
0.127
0.129
0.132
0.136
0.140
0.145
0.150
0.156
0.163
0.172
0.182
0.194
0.200
0.200
0.200
0.103
0.107
0.108
0.108
0.109
0.110
0.110
0.1l1
0.112
0.113
0.114
0.115
0.116
0.117
0.119
0.120
0.122
0.123
0.125
0.127
0.130
0.132
0.135
0.139
0.143
0.148
0.153
0.159
0.166
0.175
0.185
0.197
0.200
0.200
0.200
0.107
0.111
0.111
0.112
0.112
0.113
0.114
0.115
0.115
0.116
0.117
0.118
0.119
0.121
0.122
0.123
0.125
0.127
0.129
0.131
0.133
0.135
0.138
0.142
0.146
0.151
0.155
0.161
0.169
0.177
0.187
0.200
0.200
0.200
0.200
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