Legislative Assembly of New Brunswick
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# Pension Benefits Guarantee Fund Act +

Legislature :
55
Session :
2
Bill No. :
16
Member :
Mr. S. Graham
First Reading :
2004-12-14
Second Reading :
Committee of the Whole :
Amended :
Third Reading :
Royal Assent :
Download PDF :
Bill 16

Text of Bill :
Her Majesty, by and with the advice and consent of the Legislative Assembly of New Brunswick, enacts as follows:



Application of this Act

1(1)                   This Act binds the Crown.



1(2)                   For further certainty, this Act binds all government departments and agencies.



Amendments

2                           Section 1 of the Retirement Plan Beneficiaries Act, chapter R-10.21 of the Acts of New Brunswick, 1982, is amended in the definition "plan" by adding the following after paragraph (a):



(a.1)          the Guarantee Fund under the Pension Benefits Act;



3(1)                   Subsection 61(1) of the Pension Benefits Act, chapter P-5.1 of the Acts of New Brunswick, 1987, is amended by adding the following after paragraph (f):



(f.1)            the liability of the Guarantee Fund is likely to be substantially increased unless the pension plan is wound up in whole or in part,



3(2)                   Subsection 65(1) of the Act is amended by



(a)               striking out "and" at the end of paragraph (a);



(b)               striking out the period at the end of paragraph (b) and substituting a comma followed by "and";



(c)               adding after paragraph (b) the following:



(c)                an amount equal to the amount by which the value of the benefits under the plan that would be guaranteed by the Guarantee Fund under this Act and the regulations if the Superintendent declares that the Guarantee Fund applies to the pension plan, exceeds the value of the assets of the pension fund allocated as prescribed for payment of pension benefits accrued with respect to employment in New Brunswick.



3(3)                   Section 66 of the Act is repealed and the following is substituted:



66                        Subject to the application of the Guarantee Fund, upon the wind-up of a pension plan in whole or in part, if insufficient funds are available to pay the pensions and benefits under the plan, the amount of the pension or benefit to which a person is entitled may be reduced in accordance with the regulations.



3(4)                   The Act is amended by adding after section 71 the following:



PENSION BENEFITS GUARANTEE FUND

Administration

71.1(1)          The Superintendent is responsible for the administration of the Guarantee Fund including the investment of the assets of the Guarantee Fund.



71.1(2)          The Superintendent may charge to the Guarantee Fund the reasonable expenses incurred by the Superintendent in the administration of the Guarantee Fund.



71.1(3)          If at any time the amount standing to the credit of the Guarantee Fund is insufficient for the purpose of paying claims, the Lieutenant-Governor in Council may authorize the Minister of Finance to make loans out of the Consolidated Fund to the Guarantee Fund on such terms and conditions as the Lieutenant-Governor in Council directs.



Guarantee Fund declaration

71.2(1)          Subject to section 73, the Superintendent shall by order declare, in the circumstances mentioned in subsection (2), that the Guarantee Fund applies to a pension plan.



71.2(2)          The Superintendent shall make the declaration if



(a)               the pension plan is registered under this Act or is registered in a designated province to provide for the reciprocal application of this Act;



(b)               the pension plan provides defined benefits that are not exempt from the application of the Guarantee Fund by this Act or the regulations;



(c)                the pension plan is wound up in whole or in part; and



(d)               the Superintendent is of the opinion, upon reasonable and probable grounds, that the funding requirements of this Act and the regulations cannot be satisfied.



Guaranteed benefits

71.3(1)          If the Superintendent by order declares that the Guarantee Fund applies to a pension plan, the following are guaranteed by the Guarantee Fund, subject to the limitations and qualifications as are set out in this Act or are prescribed:



(a)               any pension in respect of employment in New Brunswick;



(b)               any deferred pension in respect of employment in New Brunswick to which a former member is entitled, if the former member's employment or membership was terminated before the 1st day of January, 2005 and the former member was at least forty-five years of age and had at least ten years of continuous employment with the employer, or was a member of the pension plan for a continuous period of at least ten years, at the date of termination of employment;



(c)                a percentage of any defined pension benefits in respect of employment in New Brunswick to which a member or former member is entitled under section 35, if the member's or former member's employment or membership was terminated on or after the 1st day of January, 2005, equal to 20 per cent if the combination of the member's or former member's age plus years of employment or membership in the pension plan equals fifty, plus an additional 2/3 of 1 per cent for each additional one-twelfth credit of age and employment or membership to a maximum of 100 per cent;



(d)               all additional voluntary contributions, and the interest thereon, made by members or former members while employed in New Brunswick;



(e)                the minimum value of all required contributions made to the pension plan by a member or former member in respect of employment in New Brunswick plus interest;



(f)                that part of a deferred pension guaranteed under this subsection to which a former spouse of a member or of a former member is entitled under a domestic contract or a support order; and



(g)               any pension to which a spouse of a former member is entitled under subsection 43(1).



71.3(2)          For the purpose of this section, where a member or former member has at least ten years of continuous employment with the employer, a deferred pension or a pension benefit includes bridging benefits.



71.3(3)          In determining the combination of age and membership or employment for subsection (1), one-twelfth credit shall be given for each full month of age and for each full month of continuous employment or membership as of the date of termination of employment.



Payments not guaranteed

71.4                  The following are not guaranteed by the Guarantee Fund:



(a)               the payment of a pension or pension benefit under a pension plan that has been established or maintained for less than three years at the date of wind up;



(b)               any increase to a pension or pension benefit or the value of a pension or pension benefit that became effective within three years before the date of wind up;



(c)                the amount of any pension or pension benefit, including any bridging supplement, in excess of $1,000 per month or such greater amount as is prescribed by the regulations;



(d)               pension benefits provided under a multi-employer pension plan;



e)                  pension benefits provided under a pension plan that provides defined benefits, if the obligation of the employer to contribute to the pension fund is limited to a fixed amount set out in a collective agreement; and



f)                   pension benefits provided by prescribed pension plans or prescribed classes of pension plans.



Lien for payment out of Guarantee Fund

71.5(1)          Where money is paid out of the Guarantee Fund as a result of the wind up, in whole or in part, of a pension plan, the Superintendent has a lien and charge on the assets of the employer or employers who provided the pension plan.



71.5(2)          The lien and charge is in an amount equal to the amount of the payment out of the Guarantee Fund plus interest thereon calculated at the rate and in the manner prescribed by the regulations.



71.5(3)          The lien and charge does not affect assets that are real property until a notice of the lien and charge that includes a description of the real property is registered in the proper land registry office, and the Superintendent may so register notice of the lien and charge.



71.5(4)          The Superintendent is subrogated to the rights of the administrator of a pension plan in respect of which the Superintendent authorizes payment from the Guarantee Fund in satisfaction of a pension, deferred pension, pension benefit or contribution guaranteed under section 71.3.



3(5)                   Subsection 100(1) of the Act is amended by



(a)               striking out the period at the end of paragraph (x) and substituting a semicolon;



(b)               adding after paragraph (x) the following:



(y)                prescribing pension benefits that are not guaranteed by the Guarantee Fund;



(z)                prescribing assessments for the purposes of the Guarantee Fund and prescribing the classes of employers that shall pay such assessments.



Commencement

4                           This Act or any provision of it comes into force on a day or days to be fixed by proclamation.

 

Legislative Assembly of New Brunswick
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