No. 74 3rd Session, 15th Legislature, Alberta 14 Elizabeth II BILL 74 A Bill respecting Pension Benefits HON. MR. REIERSON Printed by L. S. WALL, Printer to the Queen's Most Excellent Majesty, Edmonton, Alberta, 1966

Explanatory Note General. This Bill will provide for the registration and regula­ tion of private pension plans in the Province and facilitate the integration of such plans with similar plans in other provinces. 2.

Definitions.

BILL No. 74 of 1966

An Act respecting Pension Benefits (Assented to ,1966) HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of Alberta, enacts as follows: 1.

This Act may be cited as "The Pension Benefits Act". 2. ( 1) In this Act, (a) "deferred life annuity" means a life annuity that commences at retirement age under a pension plan, but in any event not later than age seventy years; (b) "designated province" means a province or territory of Canada that is designated by regulation as a province or territory in which there is in force legislation SUbstantially similar to this Act; (c) "employee" means an individual who performs service in Alberta or in a designated province for a continuous period of not less than six months under a contract of service or of apprenticeship and in­ cludes an officer or director of a corporation or of an unincorporated organization and an agent acting for his principal on a SUbstantially full-time basis; (d) '''employer'' means, in relation to an employee, the person carrying on business or established in Al­ berta from whom the employee receiv'es his re­ muneration and includes the successors or assigns of the employer; (e) "life annuity" means an annuity that continues for the duration of the life of the annuitant, whether or not it is thereafter continued to some other (I) (

g) person; "Minister" means the member of the Executive Council charged with the administration of this Act; "pension benefit" means the aggregate annual, monthly or other perio~ic amounts to .which an em- ploy,ee will become entItled upon retIrement or to which any other person is entitled br virtue of his death after retirement under a penslOn plan;

(h) ')ensio~ benefit credit" means the value at a par­ tIcula! tIme ~f the pension benefits and any other 'benefIts provIded under the pension plan to which an employee has become entitled· ( .)"." ' 1, penSIOn plan means a superannuation or pension ft;tnd or pl~n organi~ed and administered to pro- vIde a pensIOn benefIt for employees and includes (

i) a unit benefit plan under which pension benefit~ are determined with reference to remuneration of an employee for each year of service or for a selected number of years of service, (ii) a money purchase plan under which pension benefits are determined at the retirement of an employee with reference to the accumulated amount of the aggregate contributions paid by or for the credit of the employee, (iii) a flat benefit plan under which the pension benefits are expressed either as a fixed amount in respect of each year of employment or as a fixed periodic amount, and (iv) a deferred profit sharing pension plan other than a. profit sharing plan as defined in

section 79C of the Income Tax Act (Canada); (j) "qualification date" means (

i) in respect of employment in Alberta, a date to be determined by the Lieutenant Governor in Council, and (ii) in respect of employment in a designated province, the date upon which, under the law of that province, a pension plan is required to maintain its qualification for registration; (k) "registered pension plan" means a pension plan that is registered with and certified by the Super­ intendent as a plan organized and administered in accordance with this Act; (l) "servic'e for a continuous period" means service for a period of time without regard to periods of temporary suspension of employment; (m) "Superintendent" means the Superintendent of Pensions; (n) "supplemental pension plan" includes a pension plan established for employees whose membership in another pension plan is a condition precedent to membership in the supplemental pension plan; (0) "voluntary additional contribution" means an ad­ ditionalcontribution by an employee to or under a pension plan except a contribution the payment of which, under the terms of the plan, imposes upon the employer an obligation to make a concurrent ad­ ditional contribution to or under the plan.

(2) For the purposes of this Act, a person shall be deemed to be employed in the province in which the establishment 2

3. Conflict with other Acts. 4. Superintendent of Pensions to be appointed. 5. Functions and powers of the Superintendent. 3

of his employer to which he reports for work is situated and where the employee is not required to report for work at any establishment of his employer, he shall be deemed to be employed in the province in which the establishment of his employer from which his remuneration is paid is situated. 3. In the event of conflict between any provision of this Act and any provision of any other Act, the provision of this Act prevails. 4. Subject to The Public Service Act, 1962 the Lieutenant Governor in Council shall appoint a Superintendent of Pensions who shall be the chief administrative officer charged with the administration of this Act. 5.

(1) It is the function of the Superintendent and he has power (

a) to promote the establishment, extension and im­ provement of pension plans throughout Alberta, (

b) to accept for registration all pensjon plans required to be registered or filed for registration with the Superintendent und~r this Act, and to reject any pension plan that does not qualify for registration, (

c) to administer and enforce this Act, and to cancel pension plan certificates of registration issued in re­ spect of pension plans that :-(i)""'fail to meet the tests for solvency prescribed by the regulations, or (ii) otherwise cease to qualify for registration un­ der this Act, (

d) to conduct surveys and research programs and to obtain statistics for the purposes of the Superintend­ ent, (

e) to assess and collect fees for the registration and annual supervision of pension plans, and (

I) to perform such other functions and discharge such other duties as are assigned to him from time to time by the Lieutenant Governor in Council. (2)T'he Superintendent or his authorized representative may, at any reasonable time, (

a) inspect the books, files, documents and other rec­ ords respecting a pension plan kept. by an employer, an insurer, a trustee of the penSIOn plan or any other person, and (

b) require any employer, insurer, trustee of a pension plan or other person to furnish, ~n a for~ acceptable to the Superintendent, such InformatIOn as the Superintendent considers necessary for the pur~ose of ascertaining whether this Act and the regulatIOns have been or are being complied with. 3

6. Agreement with Federal and Provincial Governments. 7. Administrative expenses of the Act to be paid from appropri­ ation. 8. Annual audit of Superintendent's accounts. 9. Annual report by Superintendent. 10. No action for deducting sums in compliance with the Act. I I. Agreements to evade the Act are void. 12. Pension agency may be designated. 13. Appointment of beneficiaries under a pension plan are validated. 4

6. The Superintendent may, subject to the approval of the Lieutenant Governor in Council, (

a) enter into agreements with the authorized repre­ sentatives of a designated province or the Govern­ ~ent .of Can~da to provid~ for the reciprocal reg­ IstratIOn, aud~t and InspectIOn of pension plans and for theestabhshment of a Canadian association of pension commissions, and (

b) authorize a Canadian association of pension com­ missions to carry out such duties on behalf of the Superintendent as the Superintendent may require. 7. The moneys required for the purposes of the Superin­ tendent shall be paid out of the moneys appropriated there­ for by the Legislature. 8. The accounts and financial transactions of the Superin­ tendent shall be examined annually by the Provincial Auditor. 9.

(1) The Superintendent shall make an annual report of the affairs of his office to the Minister.

(2) The Minister shall submit the annual report to the Lieutenant Governor in Council and shall then lay the re­ port before the Assembly if it is in session or, if not, at the next ensuing 'session. 10. No action lies against any person for withholding, deducting, paying or cr'editing any sum of money in com­ pliance or intended compliance with this Act. 11. Where this Act requires an amount to be deducted, withheld, paid or credited, an agreement by the person on whom that obligation is imposed not to deduct, withhold, payor credit the amount is void. 12.

The Lieutenant Governor in Council may establish or designate an agency for the purposes, among ?thers, .of receiving, holding and disbursing pension benefIt credIts under this Act. 13.

(1) In this section, (a) "employee" means an ,employee or former employee who is a member of a pension plan, and (b) "employer" include,s the trustee or insurer under a pension plan.

(2) Where in accordance with the terms of a pension plan an employee has designated a pers~n or persons to re­ ceive a benefit payable under the plan In the event of the employee's death, 4

14. Existing and new plans are to be filed with the Superin­ tendent for registration. 15. Acceptance of plans for registration. 5

(

a) the employer's liability to provide the benefit is dis­ charged upon payment to the person or persons of the amount of the benefit, and (

b) the person or persons may upon the death of the employee enforce payment of the benefit but the employer is entitled to set up any defenc~ that he could have set up against the employee or his per­ sonal representatives. (3). An ~mployee may from time to time alter or revoke a desI~natIOn made. under a pension plan, but any such alteratIon or revocatIon may be made only in the manner set forth in the plan. (4). 'Fhis secti<?n does not apply to a designation· of a benefIcIary to whIch The Alberta Insurance Act applies. 14.

(1) Every employer of employees in Alberta covered by a pension plan established before the date to be de­ termined by the Lieutenant Governor in Council shall, unless under the terms of the plan the employer is not required to make contributions to or under the plan, (

a) file a copy of the pension plan with the Superin­ tendent for registration as soon as the Superintend­ ent requires, and (

b) while the plan remains in force, maintain its qualification for registration as required by this Act.

(2) Every ,employer who establishes a pension plan for employees in Alberta on or after the date to be determined by the Lieutenant Governor in Council shall, unless under the terms of the plan the employer is not required to make contributions to or under the plan, (

a) file a copy of the pension plan with the Super­ intendent for registration within sixty days after the establishment of the plan, and (

b) while the plan is in force, maintain its qualifica­ tion for registration as required by this Act.

(3) Notwithstanding subsections (1) and (2), ~ pension plan required to be registered shall be deemed to Include a supplemental pension plan establish~d by the e?1ployer un­ der the terms of which the employer IS not requIred to make contributions.

(4) Commencing in the year to be determined by the Lieutenant Governor in Council, every employer of em­ ployees in Alberta covered by a pension plan shall file with the Superintendent annually an information return. as pre­ scribed by the regulations in respect of every penSIOn plan administered by or on behalf of the employer or the em- ployees. 15. The Superintendent shall accept for re~istration ~nd issue his certificate in respect of each penSIOn plan flIed 5

16. Requirements of registerable pension plan. 6

for ~egistration u~der

section ~4. that, i~ his opinion, is a pe!1sIOn plan organIzed and admInIstered In accordance with thIS Act. 16. ~1) A l?ension plan filed for registration in accord­ ance wIth

sectIon 14 shall contractually provide that (

a) a member of the plan who has been in the service of the employer for a continuous period of ten years, or ~as been. a member of the plan for such period, whIcheve:t: fIrst occu.rs, an? who has attained the age o~ forty-fIve years ~s entItled, upon termination of hIS employment prIOr to his attaining retirement age or upon termination of his membership in the plan prior to his attaining retirement age to a de­ ferred life annuity commencing at his no~al retire­ men~ age eq~al to t~e pension benefits (except penSIOn benefIts prOVIded by voluntary additional contributions) provided in respect of service as an employee in Alberta or in a designated province, 6 (

i) under the terms of the plan in respect of service on or after the qualification date, (ii) by an amendment to the terms of the plan made on or after the qualification date, or (iii) by the creation of a new pension plan on or 'after the qualification date, (

b) both the pension benefits provided under the terms of the plan and the deferred life annuity prescribed by this

section are not capable of assignment or alienation and do not confer upon any employee, personal representative or dependant, or any other person, any right or interest in the pension benefits or the deferred life annuity capable of being as­ signed or otherwise aliena ted, and (

c) upon termination of his employment or upon ter­ mination of his membership in the plan, a member of the plan who is entitled to a deferred life annuity under clause (

a) is not entitled to withdraw any part of his contributions to or under the plan, except voluntary additional contributions, in r:espect of service in Alberta or in a designated provInce on or after the qualification date, and such contributions shall be applied under the ter!lls of th.e plan t?ward the provision of the deferred hfe annuIty reqUIred to be provided to the employee under clause (a).

(2) Notwithstanding any provision of a pension plan, (

a) the deferred life annuity prescribed by subsect!on (1) is not capable of surrender or commutatIon during the lifetime of the employee and does J}-ot confer upon any employee, personal repr:esentat~ve or dependant or any other person, any rIght or In­ terest in the deferred annuity capable of being sur­ rendered or commuted during the lifetime of the em· ployee, and

(

b) the pens!on benefits provided under the terms of the plan In respect of service after the qualification date are not, on or after the date of retirement of an ~mpl0.ye~, c~pable of surrender or commutation durIng hIS lIfetime and do not confer upon any em­ ployee, personal representative or dependant or any other person, any right or interest in ~uch pension benefits capable of being surrendered or commuted during the lifetime of the employee.

(3) Notwit~standing subsections (1) and (2), a pension plan may prOVIde for (a) ~esting or locking in at !in earlier age than forty­ fIve years or upon serVIce or membership in the plan for less than ten years, or for both, and (

b) payment to an employee of an amount equal to the commuted value of the deferred life annuity or pension benefit to which the employee is entitled if the amount thereof payable to the employee at normal retirement age is less than ten dollars a month payable during his lifetime.

(4) Notwithstanding subsections (1) and (2), where a pension plan so provides, an employee may receive in partial dis.charge of his rights under the plan as a lump sum, upon or after termination of employment or membership in the plan prior to his attaining normal retirement age as defined by the plan, an amount that in total does not exceed twenty­ five per cent of the commuted value of the deferred life annuity prescribed by subsection (1).

(5) If a pension plan so provides, a person who is en­ titled to a deferred life annuity under subsection (1) may, before the commencement of payment of the life an­ nuity, elect to receive (

a) a deferred life annuity the amount of which is re~ duced or increased· by reason of early or deferred retirement by provision for the payment of an optional annuity to a survivor or to the estate of the employee or by variation of the terms of payment of the annuity to any person after the employee's death, and (

b) a payment or series of payments by reason of a mental or physical disability as prescribed by the regulations, partly or wholly in lieu of the deferred life annuity described by subsection (1).

(6) If a pension plan so provides, an employ~e may, on or before attaining normal re~irement age as defm~d ~y the plan, elect to receive an a,nnuity the amount of whIch IS varied by reference to benefIts payable under the .old Age Security Act (Canada) or under any other penSIOn plan administered by the Government of Canada or by the gov­ ernment of a province of Canada. 7

17. Funding and solvency requirements of pension plan. 18. Moneys in a pension fund may not be assigned or attached. 8

(7) Upon ~he .termination or winding-up of a pension plan, all contrI~)l~tIOl}S by an e·mployer and an employee made after. the quah.flCatIOn date in respect of the deferred life annuIty prescrIbed by subsection (1) shall be applied under the terms of the plan, (

a) il} ~he case of a former employee, toward the pro­ visipn of the deferred life annuity to which he was entItled at the date of termination of his employ­ment, and (

b) in the case of an employee, toward the provision of the deferred life annuity to which he would be en­ titled if he ceased to be an employee upon the date of termination or winding-up of the plan.

(8) A pension plan filed for registration in accordance with

section 14 shall provide for contributions and benefits calculated in accordance with a formula prescribed by the regulations. 17.

(1) A pension plan filed for registration in accord­ ance with

section 14 shall contractually provide for (

a) funding, in accordance with the tests for solvency prescribed by the regulations, that is adequate to provide for payment of all pension benefits, de­ ferred life annuities and other benefits required to be paid under the terms of the plan, (

b) a written explanation to each member of the plan of the terms and conditions of the plan and amend­ ments thereto applicable to him, together with an explanation of the rights and duties of the employee with reference to the benefits available to him under the terms of the plan and such other information as may be prescribed by the regulations, and (

c) investment of pension fund moneys in the securities and loans prescribed by the regulations.

(2) Upon the termination or winding-up of a pension plan filed for registration as required by

section 14, the employer is liable to pay all amounts that would otherwise have been required to be paid to meet the tests for solvency prescribed by the regulations.

(3) N o amendment of a pension plan consequent upon the coming into force of the Canada Pension Plan shall a?­ versely affect the pension benefit credits of any m~m?er In respect of remuneration and service or membershIp In the plan prior to the first day of January, 1966. 18. Moneys payable under 8; pension pl~n shall not .be assigned, charged, attached, ~ntIcipate~ or gIven as securIty and are exempt from executIOn and seIzure, and 8;nr trans­ action purporting to assign, charge, attach, antIcIpate or give as security such moneys is void. S

19. Notice of objection may ,be given when Superintendent refuses to register a plan. 20. Appeal to Appellate Division of the Supreme Court on Superintendent's refusal to register a plan. 9

~9.

(1) Where ~he Super~ntendent refuses to accept for regIstratIOn a penSIOn plan flIed for registration under this Act or .ca~cel~ a certificate of registration, the employer mar, WIthIn SIxty days of the day of mailing of a notifica­ cahon of refusal or cancellation of registration serve on the Superintendent a notice of objection in duplicate in the prescribed form setting out the reasons for the objection and all relevant facts.

(2) A notice of objection under this

section shall be served by being sent by registered mail addressed to the Superin­ tendent at Edmonton.

(3) Upo~ receipt of a notice of objection, the Superintend­ ent shall WIth all due despatch reconsider his opinion and vary or confirm his opinion, and he shall thereupon notify the employer of its actions by registered mail. 20.

(1) Where an employer has served a notice of objec­ tion under

section 19, he may appeal to the Appellate Division of the Supreme Court for an order requiring the Superintendent to accept the pension plan for registration under this Act, (

a) within ninety days after the Superintendent has confirmed its opinion that the pension plan is not acceptable for registration, or (

b) after ninety days and before one hundred and eighty days have elapsed after service of the notice of objection and the Superintendent has not notified the employer that he has confirmed or varied his opinion.

(2) An appeal to the Court shall be instituted by filing with the Registrar of the Court or by sending by registered mail addressed to him at Edmonton three copies of a notice of appeal.

(3) Upon receipt of the copies of the notice of appeal, the Registrar shall transmit two copies to the Superintendent.

(4) Immediately after receving a copy of the notice of appeal, the Superintendent shall forward to the Registrar copies of all documents relevant to the appeal.

(5) An appeal may, in the discretion of the Court, be heard in camera or in public unless the appellant requests that it be heard in camera, in which case it shall be so heard.

(6) The ,Court may dispose of an appeal by dis~issing it, by referring the matters in issue back to the SuperIntendent for reconsideration or by allowing the appeal.

(7) Where the Court allows an appeal ~nder this section, the Superintendent shall accept the, pen~IOn plan for reg­ istration in accordance with the dIrectIOn of, ~he . Court, which may include conditions precedent to qualIfICatIOn for registration of the plan imposed upon the appellant. 9

21. Authority of Lieutenant Governor in Council to make reg­ ulations. 10

2:1 •. The Lieutenant Governor in Council may make regulatIons 10 (

a) respecting methods of computing pension benefit credits and pension benefits and the commuted value of a deferred life annuity, (

b) respecting the variation of pension benefits and deferred life annuities by reference to pensions pay­ able under the Old Age Security Act (Canada) or under any other pension plan administered by the Government of Canada or by the government of a province of :Canada, (

c) prescribing the classes of investments and loans both qualitative and quantitative, in which pensiOl~ fund moneys heretofore or hereafter accumulated may be invested, and governing the making of such investments and loans, (

d) prescribing tests and standards for solvency of pension plans, (

e) prescribing the conditions under which, upon ter­ mination of employment of an employee, upon ter­ mination of an employee's membership in a pension plan or upon the termination or winding-up of a pension plan, pension benefit credits may be held in trust by the administrator, insurer or trustee of the pension plan or transferred to the administrator, insurer or trustee of another pension plan or to a registered retirement savings plan or to the agency described in

section 12, (/) designating employees or pension plans, or any class thereof, that are excepted from the application of the Act and the regulations, (

g) designating any province or territory of Canada as a province or territory, as the case may be, in which there is in force legislation substantially similar to this Act, (

h) prescribing mental or physical disability for the purpose of clause (

b) of subsection (5) of

section 16, (

i) providing for, regulating and. governing th~ d~s­ position of the assets of a penSIOn plan that IS dIS­ continued, terminated or wound up, (

j) requiring the furnishing of inf?rmation to the Superintendent in respect of penSIOn plans, (

k) prescribing forms and providing for their use, (

l) prescribing fees for registration and the annual supervision of pension plans, (

m) prescribing approved con!ributions anq benefit formulae in respect of penSIOn plans reqUIred to be registered under this Act, and (

n) respecting any matter necessary or advisable ~o carry out effectively the intent and purpose of thIS Act.

22. Offences and penalties. 23. Commencement of Act. 11

· 22.

(1) Every per~on who contravenes any provision of thIS Act or the regulatIOns or who obstructs an officer or agent of the Superintendent in the performance of his duties is guilty of an offence and is liable on

summary conviction to a fine of not more than ten thousand dollars.

(2) Every employer who is convicted of an offence under subsection (1) shall pay to the insurer, trustee or adminis­ trator of the pension plan in respect of which the offence was committed all amounts that the employer has wrongly failed to pay as required by this Act and the regulations.

(3) Where a corporation is guilty of an offence under this Act, an officer, director or agent of the corporation who directed, authorized, assented to, acquiesced in or par­ ticipated in the commission of the offence is a party to and guilty of the offence and is liable on conviction to the punish­ ment provided for the offence whether or not the corpora­ tion has been prosecuted or convicted. 23. This Act comes into force on a day to be fixed by proclamation of the Lieutenant Governor. 11

No. 74 THIRD SE:SISION FIFTEENTH LEGISLATURE 14 ELIZABETH II 1966 BILL

An Act respecting Pension Benefits Received and read the First time Second time ..................................... . Third time ..................................... . HON. MR. REIERSON Title: 1966 (15th, 3rd) Bill 74,

An Act respecting Pension Benefits