Regulations Amending Certain Regulations Made Under the Members of Parliament Retiring Allowances Act: SOR/2020-180

Canada Gazette, Part II, Volume 154, Number 18

Registration

SOR/2020-180 August 25, 2020

MEMBERS OF PARLIAMENT RETIRING ALLOWANCES ACT

P.C. 2020-573 August 23, 2020

Her Excellency the Governor General in Council, on the recommendation of the President of the Treasury Board, pursuant to subsection 64(1) ^{footnote a} of the Members of Parliament Retiring Allowances Act ^{footnote b}, makes the annexed Regulations Amending Certain Regulations Made Under the Members of Parliament Retiring Allowances Act.

Regulations Amending Certain Regulations Made Under the Members of Parliament Retiring Allowances Act

Members of Parliament Retiring Allowances Regulations

1 The heading before section 2 and sections 2 and 3 of the Members of Parliament Retiring Allowances Regulations ^{footnote 1} are replaced by the following:

Defined Benefit Limit

2 For the purposes of paragraph (b) of the definition defined benefit limit in subsection 2(1) of the Act, the amount of the defined benefit limit in respect of the 1995 calendar year is $1,722.22 and, in respect of any subsequent calendar year, is determined in accordance with the definition defined benefit limit in subsection 8500(1) of the Income Tax Regulations.

Credits to Retiring Allowances Account and Compensation Arrangements Account

3 The amounts referred to in paragraphs 5(1)(a) and 28(1)(a) of the Act must be credited to the Retiring Allowances Account and the Compensation Arrangements Account, respectively, in the calendar month following the month in which the contributions referred to in paragraphs 4(1)(a) and 27(1)(a) of the Act are paid.

2 The heading before section 3.1 and sections 3.1 and 4 of the Regulations are replaced by the following:

4 For the purposes of subsection 63(2) of the Act, interest must be calculated at the rate of 4% compounded annually.

3 Sections 5 and 6 of the Regulations are replaced by the following:

5 (1) The monthly instalment of an allowance payable under the Act must be paid on the last day of that month.

(2) When a member becomes entitled to an allowance after the first day of any calendar month, the amount of the instalment that is payable on the last day of that month is determined by prorating the instalment by the number of days in that month in respect of which the member is so entitled to the total number of days in that month.

(3) When a person to whom an allowance is payable under the Act dies and the date of death is a day other than the last day of that month of death, the amount of the instalment that is payable for that month is determined by prorating the instalment by the number of days in that month prior to death, including the day on which the person dies, to the total number of days in that month.

6 If a recipient is incapable of managing their own affairs and there is no person entitled by law to act as their representative in respect of managing their affairs, the Receiver General may pay the allowance or other benefit payable under the Act to any person designated by the Minister to receive it on the recipient’s behalf.

4 (1) Section 7 of the Regulations is amended by adding the following before subsection (1):

(0.1) For the purpose of subsection (1) and paragraph (3)(b), the actuarial valuation report is the one that was most recently laid before Parliament, in accordance with subsection 65(1) of the Act, before the day on which the member makes the election or, if that report was laid before Parliament in the month in which that day falls or in the preceding month, the report that was laid before Parliament immediately before that report.

(2) The portion of subsection 7(1) of the Regulations before subparagraph (a)(i) is replaced by the following:

(1) When a member has elected to pay in instalments in respect of any period of service for which they have elected to pay into the accounts,

• (a) the first instalment is due and payable on the last day of the month in which the election made by the member is received by the Minister, and succeeding instalments are payable during the lifetime of the member in equal amounts, with the exception of the last instalment, which may be less in amount than the preceding instalments, all instalments to be fully paid within a period of 20 years from the day on which the member makes the election and to be calculated in accordance with the mortality rates used in the preparation of the actuarial valuation report with interest at

(3) The portion of paragraph 7(1)(b) of the Regulations before subparagraph (i) is replaced by the following:

• (b) the member may from time to time amend their payment plan to provide for payment of the instalments still to be paid

(4) Subparagraph 7(1)(b)(iv) of the Regulations is replaced by the following:

• (iv) by smaller monthly instalments on a basis similar to that described in paragraph (a), calculated as of the date of the amendment and payable within a longer period than that previously arranged under paragraph (a), if they amend their payment plan in the time which they may elect under the Act to contribute in respect of previous sessions.

(5) Subsections 7(2) to (9) of the Regulations are replaced by the following:

(2) When a member has elected to pay a lump sum under paragraph 57(1)(a) of the Act and that sum has not been paid in full by the member within a period of 30 days after the day on which they make the election, the member is deemed to have elected to pay the amount owing by instalments calculated in accordance with subsection (1)(a).

(3) When an allowance is payable to a person under the Act and they are in default in respect of any instalment payable by them under this section, recovery may be made at any time by deductions or set-off out of any amount payable to them, as they elect,

• (a) by lump sum immediately; or
• (b) by monthly instalments — calculated in accordance with the mortality rates used in the preparation of the actuarial valuation report with interest at the rate set out in subparagraph (1)(a)(i) or (ii), whichever is applicable — for the shorter of
  • (i) the lifetime of the person, or
  • (ii) the remainder of the period during which instalments under this section are to be paid.

(4) Any amount payable under subsection 57(2) of the Act by a member or former member that remains unpaid at the time of their death and that is not paid within 30 days after the date of a demand by the Minister to the survivor of the member or former member, or if there is no such person, to the children of the member or former member to whom an allowance is payable, must be recovered by deductions as set out in subsections (4.1) to (4.4).

(4.1) Deductions must be made over the period required to pay the amount in monthly instalments equal to 10% of the gross monthly amount of the allowance payable to the person in question under the Act.

(4.2) Deductions must be made from the gross monthly amount of the allowance and the first deduction must be made in the month following the month in which the 30-day period referred to in subsection (4) ends.

(4.3) A person in respect of whom deductions are made under this section may at any time

• (a) pay the amount then owing in a lump sum; or
• (b) arrange to pay the amount then owing by
  • (i) larger monthly instalments, or
  • (ii) a lump sum payment and monthly instalments within the period referred to in subsection (4.1) or with a shorter period.

(4.4) If the person demonstrates that the monthly deductions referred to in subsection (4.1) would cause them financial hardship, the Minister may reduce the amount of deductions, and lesser monthly deductions may be made, commencing the month after the date of the notice of the Minister’s decision, but the deductions must not be less than 5% of the gross monthly amount of the allowance, or $10, whichever is greater.

(5) Subject to subsection (6), when an amount that is payable by a member or former member is paid after the day on which it is due, the amount must bear interest at the rate set out in subparagraph (1)(a)(i) or (ii), whichever is applicable, from the due date to the date on which it is paid.

(6) If a member or former member has authorized or directed that the amount payable by them under this section be deducted from moneys payable to them by or on behalf of Her Majesty and the member or the former member is in default because those deductions have not been made, interest is not payable under subsection (5) on the amount equal to the deductions that have not been made.

(7) Nothing in this section prohibits a person from paying at any time before it is due any amount that is payable by them or that is deductible from their benefit under this section.

5 Section 8 of the Regulations is repealed.

6 Section 10 of the Regulations is replaced by the following:

10 (1) For the purposes of the definition child in subsection 2(1) of the Act, the expression full-time attendance at a school or university means full-time attendance at a school, college, university or other educational institution that provides training or instruction of an educational, professional, vocational or technical nature.

(2) For the purposes of the definition child in subsection 2(1) of the Act, a child is deemed to be or to have been in full-time attendance at a school or university substantially without interruption during a scholastic vacation in the following circumstances:

• (a) they begin or resume full-time attendance at a school or university at the beginning of the academic year following the vacation; or
• (b) because of any reasonable cause, they cannot begin or resume full-time attendance at a school or university at the beginning of that academic year but they do so during that academic year or the next academic year.

(3) A child who is absent during the academic year because of any reasonable cause is deemed to be or to have been in full-time attendance at a school or university substantially without interruption

• (a) if, immediately after the absence, they begin or resume full-time attendance at a school or university during that academic year;
• (b) until the end of the academic year during which they are absent, if they begin or resume full-time attendance at a school or university during the next academic year; and
• (c) until their death, if they die during the academic year in which their absence commenced, or until the end of the academic year in which their absence commenced, if their death occurred after that academic year.

(4) A child who is deemed to be or to have been in full-time attendance at a school or university must submit to the Minister

• (a) a signed declaration by a responsible officer of the relevant institution that the child is or has been in full-time attendance at a school or university; and
• (b) a signed declaration by the child is or has been in full-time attendance at a school or university.

7 Section 11 of the Regulations is repealed.

8 The schedule to the Regulations is repealed.

Recovery of Overpayments Made to Former Members of Parliament Regulations

9 The title of the Recovery of Overpayments Made to Former Members of Parliament Regulations ^{footnote 2} is replaced by the following:

Recovery of Overpayments Made to or in Respect of Former Members of Parliament Regulations

10 Section 2 of the Regulations and the heading before it are repealed.

11 (1) Subsections 3(1) to (4) of the Regulations are replaced by the following:

3 (1) A notice respecting recovery must be sent to the concerned person setting out the amounts referred to in subsection 56(3) and section 63.1 of the Act, or the amount of a reduction referred to in subsection 59.1(6) of the Act, and the manner in which the amounts may be recovered under this section.

(2) The person who receives a notice must elect, within 45 days after the date of the notice,

• (a) to pay the specified amounts in a lump sum; or
• (b) to arrange to pay the specified amounts by monthly deductions from their allowance or other benefit payable
  • (i) if the deductions are made under paragraph 56(3)(b) or section 63.1 of the Act, over the period required to pay the amounts by monthly deductions equal to 10% of the aggregate of the gross monthly amounts payable to the person under the Act as at the date the notice is sent under subsection (1), or
  • (ii) if the deductions are made under subsection 59.1(6) of the Act — calculated in accordance with the mortality rates used in the preparation of the actuarial valuation report that was most recently laid before Parliament, in accordance with subsection 65(1) of the Act, with interest at the rate of 4% compounded annually — during the shorter of
    • (A) the lifetime of the person, and
    • (B) the period required to pay the amounts by monthly deductions equal to 10% of the aggregate of the gross monthly amounts payable to the person under the Act as at the date the notice is sent under subsection (1).

(3) If an election is not made within the time limit under subsection (2), recovery must be made by monthly deductions as set out in subparagraphs (2)(b)(i) or (ii), as applicable.

(4) The deductions referred to in paragraph (2)(b) must be made in equal amounts — with the first to be made in the month following the day on which the 45-day period under subsection (2) ends and the other deductions every subsequent month — with the exception of the last deduction, which may be less in amount than the preceding deductions.

(5) The portion of subsection 3(6) of the Regulations before paragraph (a) is replaced by the following:

(6) The amount of the reduction that may be recovered under subsection 59.1(6) and section 63.1 of the Act must be recovered in the following order:

12 The portion of subsection 4(1) of the English version of the Regulations before paragraph (a) is replaced by the following:

4 (1) The Minister must perform a reconciliation of amounts of the reduction made under subsection 59.1(5) of the Act and make appropriate adjustments by way of recovery or refund

Coming into Force

13 These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

Consequential amendments to certain sections of the Members of Parliament Retiring Allowances Regulations and the Recovery of Overpayments Made to Former Members of Parliament Regulations (the regulations) are required due to amendments made to the Members of Parliament Retiring Allowances Act (the Act) by the Pension Reform Act, S.C. 2012, c. 22.

Background

The Pension Reform Act, S.C. 2012, c. 22, which received royal assent on November 1, 2012, implemented reforms designed to align the Members of Parliament Pension Plan (the Plan) with pension plans in the private sector, resulting in substantial savings for Canadian taxpayers. The Plan is a contributory defined-benefit plan, which currently covers more than 1 000 active and retired senators and members of the House of Commons and their eligible survivors.

One of the key features of the pension reform was to ensure that by January 2016, plan members’ contribution rates would reach a 50/50 current service cost sharing ratio with the Government of Canada. The reforms also increased the normal retirement age from 55 to 65 for all service accrued on or after January 1, 2016.

Objective

The objectives of the Regulations Amending Certain Regulations Made Under the Members of Parliament Retiring Allowances Act (the amendments) are to increase clarity of the regulations and to ensure that they are aligned with the 2012 amendments made to the Act under the Pension Reform Act, S.C. 2012, c. 22.

More specifically, the amendments make a number of revisions to the regulations for miscellaneous housekeeping amendments, added clarity and flexibility, and gender-neutral terminology.

Description

The amendments to the two sets of regulations ensure that provisions are aligned with the authority provided in the Act, and also make consequential and housekeeping changes that repeal, or repeal and replace, outdated titles, definitions, and provisions; reword for clarity; update references; add instructions for specific calculations; address bijuralism issues; and incorporate gender-neutral terminology.

Members of Parliament Retiring Allowances Regulations

• Amendments made to the Act in 1992 defined the President of the Treasury Board as the minister responsible for the Act. Accordingly, the regulatory provision prescribing the Minister of Finance as the responsible minister is obsolete and is being deleted.
• The funding and financing directions contained in the Pension Reform Act, S.C. 2012, c. 22, include provisions for the credits to be made to the Retiring Allowances Account and the Compensation Arrangements Account, and the amendments include the repeal of the provisions that have been overtaken by the statutory amendments.
• The various forms to be used by members will no longer be prescribed in these Regulations, which will allow more flexibility and responsiveness in managing the administrative elements in the delivery of the program.
• The applicable regulatory provision will not inadvertently permit someone to receive an allowance under the Act in respect of any portion of a month where, after having become a pensioner, they have again become a member of Parliament.
• The directions in these Regulations with respect to assumptions on mortality rates are replaced with the most recent actuarial report, which is both a current and dynamic reference.

Recovery of Overpayments Made to Former Members of Parliament Regulations

• These Regulations apply to any overpayment of any allowance or benefit paid under the Act, not just former members, and also to the collection of certain other amounts. To reflect this, the title of these Regulations is being changed to Recovery of Overpayments Made to or in Respect of Former Members of Parliament Regulations.
• Section 2 refers to the defined benefit limit, as defined under subsection 8500(1) of the Income Tax Regulations. This section does not belong in these standalone Regulations, as the limit has no application to the recovery of overpayments. This provision is repealed from these Regulations and added to the Members of Parliament Retiring Allowances Regulations because the term is of such importance in the calculation and apportionment of contributions and benefits.
• In order to align these Regulations with the explicit statutory authority, subsection 3(2) must be revised so that the rules with respect to life-insured repayment and the addition of interest apply only to the collection of the reductions referred to in subsection 59.1(6) of the Act.
• In addition, the direction for the calculation of the life-insured instalments for the reduction collection is being amended to replace the reference to outdated mortality rate assumptions with a current and dynamic reference to the most recent actuarial valuation.

Regulatory development

Consultation

Consultations were undertaken during the development of these amendments with officials from the Department of Justice, the Department of Public Works and Government Services, the House of Commons Employee Relations, the Senate of Canada Human Resources Directorate and the Office of the Superintendent of Financial Institutions.

Comments received during this consultation process have been addressed in the amendments.

Modern treaty obligations and Indigenous engagement and consultation

The amendments have no impact on Indigenous peoples or modern treaty obligations.

Instrument choice

The regulations under the Members of Parliament Retiring Allowances Act are the only existing instruments that govern the Plan and the only viable option to implement the government initiative proposed in the Pension Reform Act, S.C. 2012, c. 22.

Regulatory analysis

Benefits and costs

There are no costs associated with the amendments, as they simply involve modifications needed to align the regulations under the Act in order to implement the intent of the Act in the day-to-day administration of the Plan. This will ensure effectiveness, efficiency, and consistent application of the amendments that were made to the Act in 2012.

Small business lens

The small business lens does not apply, as there are no costs to small businesses.

One-for-one rule

The one-for-one rule does not apply, as there is no impact in administrative costs to businesses. The amendments apply to Members of Parliament Pension Plan active members, pensioners, and their eligible survivors.

Regulatory cooperation and alignment

The amendments are not related to a work plan or commitment under a formal regulatory cooperation forum.

Strategic environmental assessment

A strategic environmental assessment was not conducted for the amendments, as the changes are consequential and housekeeping in nature.

Gender-based analysis plus

No gender-based analysis plus (GBA+) impacts have been identified for the amendments.

Rationale

The amendments are necessary in order to complete the implementation of the pension reforms already enacted by Parliament in the Pension Reform Act, S.C. 2012, c. 22.

Benefit justifications were provided in the Government of Canada’s explanation and rationale for the 2012 amendments to the Act. This exercise is simply to align the regulations under the Act in order to properly implement the intent of the Act in the day-to-day administration of the Plan and ensure effectiveness, efficiency, and consistent application of the amended provisions. There are no expected costs for the Government or Canada or substantive impacts on members and beneficiaries.

These regulatory amendments are internal to the operations of the Government. Without a change in the enabling statute, there is no alternative to the regulatory route.

Implementation

The amendments to the regulations will come into force immediately upon registration and will be communicated to plan members and the plan administrator.

Contact

Deborah Elder
Senior Director
Pensions and Benefits Sector
Office of the Chief Human Resources Officer
Telephone: 613‑907‑7819
Email: Deborah.Elder@tbs-sct.gc.ca