BILL 15 - An Act to Amend the Teachersí Pension Act

BILL 15

An Act to Amend the Teachersí Pension Act

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

1 Subsection 1(1) of the Teachersí Pension Act, chapter T-1 of the Revised Statutes, 1973, is amended

(a) in the definition "annual allowance" by striking out "subparagraph 12(1)(c)(ii), (iii) or (iv)" and substituting "subparagraph 12(1)(c)(ii), (iii), (iv) or (v)";

(b) in the definition "teacher" by adding after paragraph (a.1) the following:

(a.2) is a person who was a teacher employed under Part II of the public service of the Province as specified in the First Schedule of the Public Service Labour Relations Act immediately before becoming employed with the Department of Education in a position prescribed by regulation, if such person became employed with the Department of Education on or after March 1, 1996;

2 Subparagraph 4(1)(b)(ii) of the Act is amended

(a) by adding after clause (E) the following:

(E.01) subject to the approval of the Minister, any period of leave without pay to a maximum of two years

(I) with respect to any period of leave before 1992 for which service is credited after 1991, in the case of a person who was in full-time employment as a teacher and was granted a leave of absence by a board of school trustees or the superintendent of a school district, if he or she resumes active employment as a teacher, if there is written documentation acceptable to the Minister to verify such leave of absence, and if he or she elects to pay in respect of that period of leave an amount equal to the amount he or she would have been required to pay had he or she been a contributor during that period, but based on the salary authorized to be paid to him or her at the date of election and the contribution rates applicable at that date, except that this subclause does not apply in respect of any service during that period of leave that has been credited to that person under this Act or under any other act of the Province or any other jurisdiction, and

(II) with respect to any period of leave after 1991 for which service is credited after 1991, in the case of a person who was in full-time employment as a teacher and was granted a leave of absence by a board of school trustees or the superintendent of a school district, if that period is in accordance with section 8507 of the Income Tax Regulations under the Income Tax Act (Canada), if he or she resumes active employment as a teacher, if there is written documentation acceptable to the Minister to verify such leave of absence, and if he or she elects to pay in respect of that period of leave an amount equal to the amount he or she would have been required to pay had he or she been a contributor during that period, but based on the salary authorized to be paid to him or her at the date of election and the contribution rates applicable at that date, except that this subclause does not apply in respect of any service during that period of leave that has been credited to that person under this Act or under any other act of the Province or any other jurisdiction,

(b) in clause (E.2) by striking out "and" at the end of the clause;

(c) in subclause (E.3)(III) by striking out the period at the end of the subclause and substituting a comma followed by "and";

(d) by adding after clause (E.3) the following:

(E.4) any period of service, before the person became a contributor, during which the person was employed as a substitute teacher, if the period of service is in accordance with the Income Tax Regulations under the Income Tax Act (Canada), if there is written documentation acceptable to the Minister to verify such service, and if he or she elects to pay in respect of that period of service an amount equal to the amount he or she would have been required to pay had he or she been a contributor during that period, but based on the salary authorized to be paid to him or her at the date of election and the contribution rates applicable at that date, except that this clause does not apply where the person has received credit for that period of service under this Act or under any other act of the Province or any other jurisdiction.

(e) by adding after subsection (2) the following:

4(3) Pensionable service under clause (1)(b)(ii)(E.4) shall be accumulated at a rate that is proportional to the fraction of total teaching time that the person would have performed if he or she had been employed in full time employment as a teacher during that period.

3 Section 12 of the Act is amended

(a) in paragraph (1)(c)

(i) in subparagraph (iii) by striking out "or" at the end of the subparagraph;

(ii) in subparagraph (iv)

(A) by adding "and before April 1, 1999," after "on or after April 30, 1995,";

(B) by adding "or" after the comma at the end of the subparagraph;

(iii) by adding after subparagraph (iv) the following:

(v) in the case of a contributor who ceases to be employed on or after April 1, 1999, and whose age plus years of pensionable service totals eighty or a number falling between eighty and eighty-seven, an annual allowance payable immediately, which allowance is to be the actuarial equivalent of the immediate pension that would have been payable had the contributor been entitled to the immediate pension calculated in accordance with subsection 9(3) when the contributor actually ceased to be employed,

(b) in subsection (2)

(i) by repealing paragraph (a) and substituting the following:

(a) a person who, before the person attains the age of sixty-five years, has to the personís credit a period of pensionable service of at least twenty years may, any time after the person attains the age of sixty years, retire with an immediate pension; and

(ii) by repealing paragraph (a.1);

(iii) in paragraph (b) by striking out "; and" and substituting a period;

(c) in subsection (2.1) by striking out "subsection (2)" and substituting "paragraph (2)(b)";

(d) in subsection (3) by striking out "who immediately prior to September 1, 1966 was a contributor under the Teachersí Act and".

4 Section 13 of the Act is amended

(a) by adding after subsection (4) the following:

13(4.1) If a contributor has a spouse at the time when payments of an immediate pension, annual allowance or deferred pension are to begin to be made to the contributor, that contributor may elect

(a) an immediate pension, annual allowance or deferred pension in an amount that is less than the amount otherwise payable to the contributor under this Act, and

(b) notwithstanding subsection (1), an increased surviving spouseís pension in an amount that is equal to sixty per cent, sixty-six and two-thirds per cent, seventy-five per cent or one hundred per cent of the reduced immediate pension, annual allowance or deferred pension of the contributor under paragraph (a).

13(4.2) Where a contributor makes an election under subsection (4.1), the amount of the reduced immediate pension, annual allowance or deferred pension of the contributor and the amount of the increased surviving spouseís pension in total shall be the actuarial equivalent of the total amount of the immediate pension, annual allowance or deferred pension and the surviving spouseís pension that the contributor and the surviving spouse would or could have been paid if the election had not been made.

13(4.3) Where a contributor makes an election under subsection (4.1), the contributor is not entitled to re-elect to be paid a different reduced immediate pension, annual allowance or deferred pension or an unreduced immediate pension, annual allowance or deferred pension at any other time.

13(4.4) Where a contributor makes an election under subsection (4.1), the increased surviving spouseís pension shall only be paid to the person who was the spouse of the contributor on the date that payments of the contributorís reduced immediate pension, annual allowance or deferred pension began.

13(4.5) Where a contributor makes an election under subsection (4.1), subsections (2), (3) and (4) apply with the necessary modifications.

13(4.6) Where a contributor makes an election under subsection (4.1), paragraph 8503(2)(k) of the Income Tax Regulations under the Income Tax Act (Canada) applies to subsections (4.1) to (4.5).

(b) in subsection (8) by striking out "subsection 22.01(3)" and substituting "subsections (4.4) and 22.01(3)".

5 Section 14 of the Act is amended by adding after subsection (2) the following:

14(2.1) Notwithstanding subsections (1) and (2), no childrenís pension is payable where a contributor makes an election under subsection 13(4.1).

6 Section 16 of the Act is amended

(a) by renumbering the section as subsection 16(1);

(b) by adding after subsection (1) the following:

16(2) Subsection (1) does not apply where a contributor makes an election under subsection 13(4.1).

7 Section 27 of the Act is amended

(a) in subsection (1) by adding after paragraph (a) the following:

(a.01) prescribing positions in the Department of Education for the purposes of paragraph (a.2) of the definition "teacher" in subsection 1(1);

(b) by adding after subsection (3) the following:

27(4) A regulation under paragraph (1)(a.01) may be made retroactive to April 1, 1999, or to any date after April 1, 1999.

8 This Act shall be deemed to have come into force on April 1, 1999.

EXPLANATORY NOTES

Section 1

(a) The existing definition is as follows:

"annual allowance" means an allowance described in subparagraph 12(1)(c)(ii), (iii) or (iv);

(b) The definition "teacher" is expanded to include a person who was a teacher under Part II of the public service of the Province as specified in the First Schedule of the Public Service Labour Relations Act immediately before becoming employed with the Department of Education in a position prescribed by regulation, if such person became employed with the Department of Education on or after March 1, 1996.

Section 2

(a) A teacher may purchase a period of leave without pay, to a maximum of two years, as pensionable service in accordance with the conditions in the new provision.

(b) and (c) The amendments are consequential on the amendment made in paragraph 2(d) of this amending Act. Grammatical and punctuation changes are made.

(d) A teacher may purchase substitute teaching service as pensionable service in accordance with the conditions in the new provision.

(e) Pensionable service under the new clause 4(1)(b)(ii)(E.4) of the Teachersí Pension Act, added by paragraph 2(d) of this amending Act, shall be calculated at a proportional rate in accordance with the new subsection 4(3) of the Teachersí Pension Act.

Section 3

(a)(i) and (ii) The amendments are consequential on the amendment made in subparagraph 3(a)(iii) of this amending Act. Grammatical and punctuation changes are made. A period of time is clarified.

(a)(iii) The amendment will allow a teacher who ceases to be employed on or after April 1, 1999, to retire on a reduced pension if the age plus years of pensionable service of the teacher totals eighty or a number between eighty and eighty-seven.

(b)(i) The existing provision is as follows:

12(2) Notwithstanding anything in subsection (1),

(a) a person who immediately prior to September 1, 1966 was a contributor under the Teachersí Act and who, before he attains the age of sixty-five years, has to his credit a period of pensionable service of at least twenty years may, any time after he attains the age of sixty years, retire with an immediate pension;Ö

(b)(ii) The existing provision is as follows:

12(2) Notwithstanding anything in subsection (1),

(a.1) a person who prior to September 1, 1966 was a contributor under the Teachersí Act and who, before the person attains the age of sixty-five years, has to the personís credit a period of pensionable service of at least twenty years may, any time after the person attains the age of sixty years, retire with an immediate pension if the person ceases to be employed as a teacher on or after April 30, 1995;Ö

(b)(iii) The amendment is consequential on the amendments made in subparagraphs 3(b)(i) and (ii) of this amending Act. A punctuation change is made.

(c) The amendment is consequential on the amendments made in paragraph 3(b) of this amending Act. An internal reference is changed.

(d) The existing provision is as follows:

12(3) Notwithstanding subsection (1), a person who immediately prior to September 1, 1966 was a contributor under the Teachersí Act and who has elected to receive a deferred pension, shall be entitled to an immediate pension upon attaining the age of sixty years if he has to his credit a period of pensionable service of at least twenty years.

Section 4

(a) In exchange for a reduced immediate pension, annual allowance or deferred pension, a teacher may select a surviving spouseís pension that is higher than the current fifty per cent of the immediate pension, annual allowance or deferred pension of the teacher. The higher rate may be sixty, sixty-six and two-thirds, seventy-five or one hundred per cent of the reduced immediate pension, annual allowance or deferred pension of the teacher. The amount of the reduced immediate pension, annual allowance or deferred pension of the teacher and of the increased surviving spouseís pension will be the actuarial equivalent of the total amount of the immediate pension, annual allowance or deferred pension and the surviving spouseís pension that the teacher and the surviving spouse would or could have been paid if the election had not been made. The surviving spouseís pension will only be paid to the person who was the spouse of the teacher on the date that payments of the teacherís reduced immediate pension, annual allowance or deferred pension began.

(b) The amendment is consequential on the amendment made in paragraph 4(a) of this amending Act. The existing provision is as follows:

13(8) If two persons claim the surviving spouseís pension under this section, and one of those persons is a spouse because he or she was married, other than in a void or voidable marriage, to the contributor at the time of the contributorís death, that spouse is entitled to the surviving spouseís pension, if otherwise eligible and subject to subsection 22.01(3), unless there is a valid written agreement between the contributor and that spouse, or a court order or judgment, that bars that spouseís claim.

Section 5

Where a teacher selects a surviving spouseís pension that is higher than the current fifty per cent of the immediate pension, annual allowance or deferred pension of the teacher, no childrenís pension is payable.

Section 6

(a) The existing provision is as follows:

16 Where, upon the death of a contributor employed as a teacher who had to his credit five or more years pensionable service, there is no person to whom a pension may be paid, an amount equal to a return of contributions and interest calculated from September 1, 1966 shall be paid to his estate.

(b) Where a teacher selects a surviving spouseís pension that is higher than the current fifty per cent of the immediate pension, annual allowance or deferred pension of the teacher, no return of contributions is payable to the teacherís estate if the teacherís spouse dies before the teacher.

Section 7

(a) Regulation-making authority is added. The amendment is consequential on the amendment made in paragraph 1(b) of this amending Act.

(b) Regulations under the new paragraph 27(1)(a.01) of the Teachersí Pension Act, added by paragraph 7(a) of this amending Act, may be made retroactive.

Section 8

Commencement provision.