1998/99 Legislative Session: 3rd Session, 36th Parliament
THIRD READING


The following electronic version is for informational purposes only.
The printed version remains the official version.


Certified correct as passed Third Reading on the 15th day of July, 1999
E. George MacMinn, Q.C., Law Clerk


HONOURABLE JOY K. MacPHAIL
MINISTER OF FINANCE AND CORPORATE RELATIONS


BILL 95 -- 1999

PUBLIC SECTOR PENSION PLANS ACT

Contents

Section
Part 1 -- Introductory Provisions
1 Definitions and interpretation
2 Purposes of the Act
3 Application of other Acts
Part 2 -- British Columbia Pension Corporation
4 Definitions
5 British Columbia Pension Corporation established
6 Capital of the pension corporation
7 Powers, functions and duties of the pension corporation
8 Pension management board
9 Powers, functions and duties of the pension management board
10 Responsibilities of chief executive officer
11 Officers and employees of the pension corporation
12 Chief executive officer's power to delegate
13 Operating costs and capital expenditures of the pension corporation

14

Indemnification

Part 3 -- British Columbia Investment Management Corporation
15 Definitions
16 British Columbia Investment Management Corporation established
17 Capital of the investment management corporation
18 Powers, functions and duties of the investment management corporation
19 Investment management board
20 Powers, functions and duties of the investment management board
21 Responsibilities of the chief investment officer
22 Officers and employees of the investment management corporation
23 Chief investment officer's power to delegate
24 Operating costs and capital expenditures of the investment management corporation
25 Indemnification
Part 4 -- Regulations and Transitional
Division 1 -- Regulations
26 Regulations
Division 2 -- Transitional
27 Transitional -- pension corporation
28 Transitional -- investment management corporation
29 Transitional -- regulations
Schedule A -- College Pension Plan
Schedule B -- Municipal Pension Plan
Schedule C -- Public Service Pension Plan
Schedule D -- Teachers' Pension Plan
30-112 Consequential Amendments and Repeals
113-122 Amendments to this Act
123 Validation
124 Repeal
125 Commencement


HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of British Columbia, enacts as follows:

Part 1 -- Introductory Provisions

Definitions and interpretation

1 (1) In this Act:

"college board" means the College Pension Board of Trustees established under Schedule A;

"college plan" means the College Pension Plan continued under Schedule A;

"investment management board" means the board of directors of the investment management corporation;

"investment management corporation" means the British Columbia Investment Management Corporation established under section 16;

"municipal board" means the Municipal Pension Board established under Schedule B;

"municipal plan" means the Municipal Pension Plan continued under Schedule B;

"pension board" means the college board, municipal board, public service board or teachers' board, or all of them as the context requires;

"pension corporation" means the British Columbia Pension Corporation established under section 5;

"pension fund" means the money and securities of the college plan, municipal plan, public service plan or teachers' plan, or all of them as the context requires;

"pension management board" means the board of directors of the pension corporation;

"pension plan" means the college plan, municipal plan, public service plan or teachers' plan, or all of them as the context requires;

"plan member" means a person who

(a) is making contributions to the pension fund,

(b) has previously made contributions to the pension fund, which contributions were left on deposit, and is not receiving benefits from the pension fund, or

(c) has previously made contributions to the pension fund and is receiving benefits from the pension fund;

"public service board" means the Public Service Pension Advisory Board established under Schedule C;

"public service plan" means the Public Service Pension Plan continued under Schedule C;

"teachers' board" means the Teachers' Pension Board established under Schedule D;

"teachers' plan" means the Teachers' Pension Plan continued under Schedule D.

(2) Despite subsection (1), a definition in this section does not apply to a Schedule to this Act unless specifically provided for in the Schedule.

Purposes of the Act

2 The purposes of this Act are as follows:

(a) to establish an agency which must provide pension plan administration services to the pension boards;

(b) to establish an agency which may provide investment management services to the pension boards;

(c) to provide pension plan governance and risk and reward sharing alternatives for the management of the pension plans and pension funds;

(d) to provide benefits to eligible plan members under the pension plans.

Application of other Acts

3 The pension plans, and any supplemental benefit arrangements under those pension plans, are subject to the applicable requirements of

(a) the Income Tax Act (Canada),

(b) the Pension Benefits Standards Act,

(c) the Family Relations Act, and

(d) any other enactment applicable to the pension plans, the pension funds and the benefits payable under the pension plans.


Part 2 -- British Columbia Pension Corporation

Definitions

4 In this Part:

"chief executive officer" means the person appointed under section 9 (1) (a) as chief executive officer of the pension corporation;

"other clients" means British Columbia public sector pension plan clients of the pension corporation other than the pension boards.

British Columbia Pension Corporation established

5 (1) A corporation to be known as the British Columbia Pension Corporation is established consisting of the pension management board appointed under section 8.

(2) The pension corporation has the power and capacity of a natural person of full capacity.

(3) The fiscal year end of the pension corporation is March 31.

(4) The pension corporation is an agent of the government.

(5) The pension corporation, as an agent of the government, is not liable for taxation except as the government is liable for taxation.

(6) The pension corporation may, with the approval of the pension management board, borrow or raise money for its purposes in the amounts and for the periods determined by the pension corporation.

(7) The Company Act and the Company Clauses Act do not apply to the pension corporation, but the Lieutenant Governor in Council may, on the recommendation of the pension management board, direct that certain provisions of the Company Act apply to the pension corporation.

Capital of the pension corporation

6 (1) The capital of the pension corporation is one share with a par value of $10.

(2) The share in the pension corporation must be issued to and registered in the name of the Minister of Finance and Corporate Relations and must be held by that minister on behalf of the government.

Powers, functions and duties of the pension corporation

7 (1) The purpose of the pension corporation is to provide plan administration services

(a) to the pension boards responsible for the pension plans, and

(b) to any other clients that retain the services of the pension corporation.

(2) Plan administration services are those administrative services, excluding funds management services, required to deliver pension benefits to plan members, and includes all of the following:

(a) enrolling employers and plan members;

(b) collecting and recording contributions and other information received from employers and plan members necessary to properly administer the pension plans;

(c) auditing the information collected under paragraph (b);

(d) communicating information about the pension plan provisions to employers and plan members;

(e) establishing and maintaining plan member records and accounts;

(f) calculating and processing pension benefits and other related benefits;

(g) managing, in coordination with the investment management corporation, the cash flow of the pension funds in order to maximize investment returns;

(h) paying, and recording the payment of, pension benefits and other related benefits;

(i) filing documentation with the appropriate authorities and performing other regulatory duties as may be required under other enactments;

(j) providing secretariat and other services required by the pension boards;

(k) providing additional services to a pension plan if the pension management board and the pension board agree on the budget required for the additional services.

(3) The pension corporation must discharge the responsibilities of the pension boards under the Income Tax Act (Canada) for administration of the pension plans.

(4) The pension corporation may enter into agreements

(a) with a person or body to provide benefits to plan members or to provide other services in respect of the pension plans, or

(b) to administer plans for other clients.

Pension management board

8 (1) The pension management board must have at least 8 directors as follows:

(a) 2 directors appointed by the college board from among its members, one to be nominated by the plan employer partners and one to be nominated by the plan member partners, as those terms are defined in section 1 of Schedule A;

(b) 2 directors appointed, on the recommendation of the municipal board, by the trustee of the pension fund from among the members of the municipal board, one to be nominated by the plan sponsor representatives and one to be nominated by the plan member representatives, as those terms are used in section 3 (1) (a) and (b) of Schedule B;

(c) 2 directors appointed, on the recommendation of the public service board, by the trustee of the pension fund from among the members of the public service board, one to be nominated by the plan sponsor representatives and one to be nominated by the plan member representatives, as those terms are used in section 3 (1) (a) and (b) of Schedule C;

(d) 2 directors appointed, on the recommendation of the teachers' board, by the trustee of the pension fund from among the members of the teachers' board, one to be nominated by the plan sponsor representatives and one to be nominated by the plan member representatives, as those terms are used in section 3 (1) (a) and (b) of Schedule D.

(2) Each director appointed under subsection (1) has one vote.

(3) The directors must

(a) designate one of the directors appointed under subsection (1) as chair of the board, or

(b) appoint a person, not referred to in subsection (1), as a director and designate that person as chair of the board.

(4) The pension management board must determine whether

(a) the chair designated under subsection (3) (a) is entitled to a second or casting vote, or

(b) the chair designated under subsection (3) (b) has a vote and, if so, whether the chair is entitled to a second or casting vote.

(5) An appointment to the board under subsection (1) or (3) (b) must be made

(a) for a term not exceeding 3 years, and

(b) so that no more than 4 appointments expire in any calendar year.

(6) An appointment under subsection (1) or (3) (b) may be renewed.

(7) Despite subsection (1) or (3) (b), an appointment to the board may be rescinded by the party that made the appointment.

(8) If a director ceases for any reason to be a director of the pension management board before the end of the term for which he or she was appointed,

(a) the board must provide notice of the vacancy to the party that appointed that director, and

(b) that party must promptly appoint, in accordance with subsection (1) or (3) (b), a replacement director for the remainder of the term of that director.

(9) Subject to subsection (10), a quorum of the pension management board consists of all of the directors of the board, and all decisions of the board must be unanimous.

(10) The pension management board may, by the unanimous agreement of the board, change a requirement of subsection (9).

(11) No act or proceeding of the pension management board is invalid merely because there are in office fewer than the number of directors required under this section.

(12) The pension management board may pay

(a) to a director or a person appointed to a committee of the board an allowance for reasonable travel and other expenses necessarily incurred in carrying out the business of the board,

(b) to a director or a person appointed to a committee of the board, if the director or person is not receiving remuneration from any other source for acting as a director or on a committee, remuneration that has been set by the board and is consistent with Treasury Board guidelines, and

(c) to an organization, if the organization is the source of remuneration paid to a director or person appointed to a committee of the board, remuneration for the services of the director or person at the rate set by the board under paragraph (b).

Powers, functions and duties of the pension management board

9 (1) The pension management board must do all of the following:

(a) select and appoint a chief executive officer to hold office during pleasure, and determine the salary to be paid to the chief executive officer;

(b) review and monitor the performance of the chief executive officer;

(c) select and appoint for the pension corporation an auditor who is qualified to be an auditor of a reporting company under the Company Act;

(d) approve, in whole or in part and with or without modifications,

(i) policies respecting the proper discharge of the pension corporation's mandate,

(ii) a business plan for the pension corporation,

(iii) the pension corporation's budget, including the budget for capital expenditures and staffing, and

(iv) conflict of interest guidelines;

(e) oversee the operations of the pension corporation;

(f) act in the best interests of the pension corporation.

(2) The pension management board must, through the pension corporation and to the extent possible under the budget approved for the pension corporation, do all of the following:

(a) provide proper reporting and accountability, in a timely manner, to the pension boards and the trustees of the pension funds administered by the pension corporation;

(b) provide administrative services in an efficient, effective and timely manner;

(c) have in place an equitable fee system based on the user pay principle;

(d) provide for its own financial administration by

(i) establishing an accounting system which ensures that there is proper reporting and accountability to the pension boards in a timely manner,

(ii) permitting the Minister of Finance and Corporate Relations to direct the Comptroller General to examine the financial and accounting operations of the pension corporation and report back to the pension management board, Treasury Board, the pension boards or other clients that retain the services of the pension corporation,

(iii) having annual financial statements of the pension corporation prepared in accordance with generally accepted accounting principles,

(iv) having an audit performed annually on the financial statements referred to in subparagraph (iii), and

(v) providing to the Minister of Finance and Corporate Relations an annual business plan and an annual report on the pension corporation, including the audited financial statements.

(3) The pension management board may do any of the following:

(a) delegate to the chief executive officer the exercise or performance of any power or duty conferred or imposed on the board under subsection (2);

(b) pass resolutions it considers necessary or advisable to manage and conduct the affairs of the pension corporation and to exercise the board's powers and perform its duties;

(c) establish committees of the board, and may determine the composition, duties, responsibilities, limitations and operating procedures of those committees;

(d) appoint persons other than directors of the board to a committee referred to in paragraph (c), and may set the term of appointment that applies to those committee members.

Responsibilities of chief executive officer

10 (1) The chief executive officer is responsible for carrying out the day to day duties of the pension corporation respecting the administration of the pension plans.

(2) The chief executive officer must report

(a) to the pension management board with respect to the operations of the pension corporation, and

(b) to the pension boards and the trustees of the pension funds with respect to the administration of the pension plans.

(3) The chief executive officer must do all of the following:

(a) hire and dismiss the officers and employees necessary to carry on the business and operations of the pension corporation;

(b) supervise the day to day operations of the pension corporation;

(c) prepare a business plan and budget for approval by the pension management board;

(d) attend at meetings of the pension management board and receive a copy of all information provided to the board;

(e) establish policies and procedures to meet the operational objectives of the pension corporation;

(f) develop a business continuation plan;

(g) keep all the records, books and accounts of the pension corporation;

(h) file documentation with the appropriate authorities and perform other regulatory duties as may be required under the Income Tax Act (Canada), the Pension Benefits Standards Act and any other applicable enactments;

(i) address any other matter arising out of the management of the pension corporation that is necessary to properly carry out the provisions of this Part;

(j) exercise or perform any power or duty delegated to the chief executive officer by the pension management board under section 9 (3) (a).

(4) Subsection (3) (d) does not apply to the chief executive officer respecting matters referred to in section 9 (1) (a) and (b) or respecting matters in which there would be a conflict of interest.

(5) A benefit under a pension plan must not be granted to a person until the chief executive officer, after inquiry, determines all of the following:

(a) that the person is within the scope of the pension plan;

(b) that the person is entitled to receive the benefit and the basis for receiving that benefit;

(c) the amount of the benefit;

(d) if, in the opinion of the chief executive officer, the person is unfit to manage his or her own affairs, the allocation of all or part of the benefit payable to that person;

(e) the contributions made and the maximum benefit paid under the registered pension plan provisions of the Income Tax Act (Canada);

(f) any other matter related to the administration of the pension plan.

(6) For the purposes of subsection (5), the chief executive officer must prepare and keep on file, in the office of the pension corporation, a record of the grounds on which the findings in each case are based, and the record must be open to inspection by the person who is affected by those findings.

(7) The chief executive officer, in carrying out his or her duties under subsection (5), may rely on information or recommendations provided by the officers and employees of the pension corporation.

Officers and employees of the pension corporation

11 (1) Subject to subsection (2), the Public Service Act and the Public Service Labour Relations Act apply to the pension corporation and to the officers and employees of the pension corporation.

(2) The Public Service Labour Relations Act and Parts 3 and 4 of the Public Service Act do not apply to the chief executive officer.

(3) The Pension (Public Service) Act and the Public Service Benefit Plan Act apply to the pension corporation and to the officers and employees of the pension corporation.

(4) In applying section 22 of the Public Service Act under subsection (1) of this section, the references to the commissioner and a deputy minister are to be read as references to the chief executive officer.

Chief executive officer's power to delegate

12 The chief executive officer may, on terms and conditions the chief executive officer considers advisable, delegate to any person or class of persons any of the chief executive officer's powers, functions or duties.

Operating costs and capital expenditures of the pension corporation

13 (1) The pension corporation must recover its operating costs and capital expenditures from one or more of the following:

(a) amounts charged to the pension plans for operating costs and capital expenditures necessarily incurred by the pension corporation on behalf of the pension plans it administers;

(b) amounts authorized under other enactments for services provided by the pension corporation;

(c) amounts charged to persons, organizations and other clients for services provided by the pension corporation;

(d) income accruing from investments made by the pension corporation on its own behalf.

(2) The pension corporation may, in advance, submit a requisition quarterly to the pension boards respecting the pension plans it administers for the amounts required to cover the anticipated operating costs and capital expenditures necessarily incurred by the pension corporation on behalf of those pension plans.

(3) The pension plans must pay to the pension corporation, in quarterly installments from the pension funds, the amounts requisitioned under subsection (2), subject to the limits within the pension corporation's budget as approved by the respective pension boards.

(4) The operating costs and capital expenditures of the pension corporation attributable to the pension plans it administers, as determined and certified by the chief executive officer, must

(a) be paid out of the money requisitioned under subsection (2), and

(b) to the extent to which the operating costs and capital expenditures paid out

(i) are less than the amount requisitioned, be reimbursed to the pension funds, or

(ii) are greater than the amount requisitioned, be paid from the pension funds.

(5) Capital expenditures of the pension corporation may be paid from amounts borrowed by the pension corporation.

Indemnification

14 (1) Despite section 75 of the Financial Administration Act, the pension corporation may indemnify a person who is a director of the pension management board, an officer or employee of the pension corporation or a person appointed to a committee of the board under section 9 (3) (d), or a former director, officer, employee or committee member, against all costs, charges and expenses actually and reasonably incurred by the person, including an amount paid to settle an action or satisfy a judgment in a civil, criminal or administrative action or proceeding to which the person is made a party because of being or having been a director, officer, employee or committee member, and including an action brought by the pension corporation, if

(a) the director, officer, employee or committee member acted in good faith, and

(b) in the case of a criminal action or proceeding, the director, officer, employee or committee member had reasonable grounds for believing that his or her conduct was lawful.

(2) The pension management board may purchase and maintain, for the benefit of the pension corporation or a director, officer, employee or committee member referred to in subsection (1), or any of them, insurance against liability incurred by the pension corporation or by the director, officer, employee or committee member.


Part 3 -- British Columbia
Investment Management Corporation

Definitions

15 In this Part:

"chief investment officer" means the person appointed under section 20 (1) (a) as chief investment officer of the investment management corporation;

"funds" means money and securities placed with the investment management corporation under the authority of section 18 (3);

"other clients" means persons, other than the pension boards, with authority under section 18 (3) to make investments.

British Columbia Investment Management Corporation established

16 (1) A corporation, to be known as the British Columbia Investment Management Corporation, is established and incorporated as a trust company authorized to carry on trust business and investment management services as provided in this Part.

(2) The corporation referred to in subsection (1) consists of the investment management board appointed under section 19 (1) or (3).

(3) The investment management corporation has the power and capacity of a natural person of full capacity.

(4) The fiscal year end of the investment management corporation is March 31.

(5) The investment management corporation is an agent of the government.

(6) The investment management corporation, as an agent of the government, is not liable for taxation except as the government is liable for taxation.

(7) The Company Act, the Company Clauses Act and, despite section 11 of the Financial Institutions Act, the Financial Institutions Act do not apply to the investment management corporation, but the Lieutenant Governor in Council may direct that certain provisions of the Company Act and the Financial Institutions Act apply to the investment management corporation.

(8) For the purposes of the Securities Act and its regulations, the investment management corporation must be treated in the same manner as the government is treated under that Act and its regulations.

Capital of the investment management corporation

17 (1) The capital of the investment management corporation is one share with a par value of $10.

(2) The share in the investment management corporation must be issued to and registered in the name of the Minister of Finance and Corporate Relations and must be held by that minister on behalf of the government.

Powers, functions and duties of the investment management corporation

18 (1) In this section, "designated institution", "government body", "public money", "special fund" and "trust fund" have the same meaning as in the Financial Administration Act.

(2) The purpose of the investment management corporation is to provide funds management services, including the making of investments and loans, for funds placed with the investment management corporation.

(3) Despite any other enactment, including the Financial Administration Act, a person who has the authority to invest

(a) money or securities of a trust fund, special fund or other fund,

(b) money or securities of a government body or designated institution, or

(c) other public money or securities

may, with the agreement of the investment management board, place the money or securities with the investment management corporation as agent of the person, for investment.

(4) In addition to the powers, functions and duties of the investment management corporation as provided in this Part, the investment management corporation has the same powers, functions and duties in the provision of funds management services for funds placed with it under subsection (3) as the Minister of Finance and Corporate Relations would have if the funds had been placed with that minister under Part 5 of the Financial Administration Act as it read on April 1, 1999.

(5) The investment management corporation may provide additional services to a pension plan if the investment management board and the pension board agree on the budget required for the additional services.

Investment management board

19 (1) The first investment management board must have 7 directors as follows:

(a) one director appointed, on the recommendation of the College Pension Advisory Board continued under the Pension (College) Act, by the trustee of the College Pension Fund from among the members of the College Pension Advisory Board;

(b) one director appointed, on the recommendation of the Municipal Pension Board continued under the Pension (Municipal) Act, by the trustee of the Municipal Pension Fund from among the members of the Municipal Pension Board;

(c) one director appointed, on the recommendation of the Public Service Pension Advisory Board continued under the Pension (Public Service) Act, by the chair of the Public Service Pension Advisory Board from among the members of the Public Service Pension Advisory Board;

(d) one director appointed, on the recommendation of the Teachers' Pension Board continued under the Pension (Teachers) Act, by the trustee of the Teachers' Pension Fund from among the members of the Teachers' Pension Board;

(e) 2 directors, representative of clients of the investment management corporation, other than those referred to in paragraphs (a) to (d), appointed by the Minister of Finance and Corporate Relations;

(f) one director who is the Deputy Minister of Finance and Corporate Relations.

(2) Subsection (1) and this subsection are repealed on the coming into force of subsection (3).

(3) On the coming into force of this subsection, the investment management board must have 7 directors as follows:

(a) one director appointed by the college board from among its members;

(b) one director appointed, on the recommendation of the municipal board, by the trustee of the pension fund from among the members of the municipal board;

(c) one director appointed, on the recommendation of the public service board, by the trustee of the pension fund from among the members of the public service board;

(d) one director appointed, on the recommendation of the teachers' board, by the trustee of the pension fund from among the members of the teachers' board;

(e) 2 directors, representative of clients of the investment management corporation, other than those referred to in paragraphs (a) to (d), appointed by the Minister of Finance and Corporate Relations;

(f) one director who is the Deputy Minister of Finance and Corporate Relations.

(4) The Deputy Minister of Finance and Corporate Relations is designated as chair of the investment management board.

(5) Each director appointed under subsection (1) or (3) has one vote on the board.

(6) An appointment to the investment management board under subsection (3) (a) to (e) must be made

(a) for a term not exceeding 3 years, and

(b) so that no more than 3 appointments expire in any calendar year.

(7) An appointment under subsection (3) (a) to (e) may be renewed.

(8) Despite subsection (1) (a) to (e) or (3) (a) to (e), an appointment to the investment management board may be rescinded by the party that made the appointment.

(9) If a director ceases for any reason to be a director of the investment management board before the end of the term for which he or she was appointed,

(a) the board must provide notice of the vacancy to the party that appointed that director, and

(b) that party must promptly appoint, in accordance with subsection (1) or (3), a replacement director for the remainder of the term of that director.

(10) Subject to subsection (11), a quorum of the investment management board consists of all of the directors of the board, and all decisions of the board must be unanimous.

(11) The investment management board may, by the unanimous agreement of the board, change a requirement of subsection (10).

(12) No act or proceeding of the investment management board is invalid merely because there are in office fewer than the number of directors required under this section.

(13) The investment management board may pay

(a) to a director or a person appointed to a committee of the board an allowance for reasonable travel and other expenses necessarily incurred in carrying out the business of the board,

(b) to a director or a person appointed to a committee of the board, if the director or person is not receiving remuneration from any other source for acting as a director or on a committee, remuneration that has been set by the board and is consistent with Treasury Board guidelines, and

(c) to an organization, if the organization is the source of remuneration paid to a director or person appointed to a committee of the board, remuneration for the services of the director or person at the rate set by the board under paragraph (b).

Powers, functions and duties of the investment management board

20 (1) The investment management board must do all of the following:

(a) select and appoint a chief investment officer to hold office during pleasure, and determine the salary to be paid to the chief investment officer;

(b) review and monitor the performance of the chief investment officer;

(c) select and appoint for the investment management corporation an auditor who is qualified to be an auditor of a reporting company under the Company Act;

(d) approve, in whole or in part and with or without modifications,

(i) policies respecting the proper discharge of the investment management corporation's mandate,

(ii) a business plan for the investment management corporation,

(iii) the investment management corporation's budget, including the budget for capital expenditures and staffing,

(iv) policies respecting pooled funds, and

(v) conflict of interest guidelines;

(e) establish an employee classification system and compensation scale, including performance bonuses;

(f) oversee the operations of the investment management corporation;

(g) act in the best interests of the investment management corporation.

(2) The investment management board must, through the investment management corporation and to the extent possible under the budget approved for the investment management corporation, do all of the following:

(a) provide proper reporting and accountability, in a timely manner, to the pension boards and the trustees and other persons responsible for the funds managed by the investment management corporation;

(b) comply with recognized industry standards;

(c) provide investment management services in an efficient, effective and timely manner;

(d) have in place an equitable fee system based on the user pay principle;

(e) provide for its own financial administration by

(i) establishing an accounting system which ensures that there is proper reporting and accountability, in a timely manner, to the clients of the investment management corporation,

(ii) permitting the Minister of Finance and Corporate Relations to direct the Comptroller General to examine the financial and accounting operations of the investment management corporation and report back to the investment management board, Treasury Board, the pension boards and other persons responsible for the funds managed by the investment management corporation,

(iii) having annual financial statements of the investment management corporation prepared in accordance with generally accepted accounting principles,

(iv) having an audit performed annually on the financial statements referred to in subparagraph (iii), and

(v) providing to the Minister of Finance and Corporate Relations an annual business plan and an annual report on the investment management corporation, including the audited financial statements.

(3) The investment management board may do any of the following:

(a) delegate to the chief investment officer the exercise or performance of any power or duty conferred or imposed on the board under subsection (2);

(b) pass resolutions it considers necessary or advisable to manage and conduct the affairs of the investment management corporation and to exercise the board's powers and perform its duties;

(c) establish committees of the board, and may determine the composition, duties, responsibilities, limitations and operating procedures of those committees;

(d) appoint persons other than directors of the board to a committee referred to in paragraph (c), and may set the term of appointment that applies to those committee members.

(4) The chief investment officer appointed under the authority of subsection (1) (a) is the chief executive officer of the investment management corporation.

(5) The investment management board must not be involved in the investment decisions of the investment management corporation.

Responsibilities of the chief investment officer

21 (1) The chief investment officer is responsible for carrying out the day to day duties related to the management of the funds.

(2) The chief investment officer must report

(a) to the investment management board with respect to the operations of the investment management corporation, and

(b) to the trustees or other persons responsible for the funds, and to the other clients of the investment management corporation, with respect to the management and investment performance of the funds that they have placed with the investment management corporation.

(3) The chief investment officer must do all of the following:

(a) hire and dismiss the officers and employees necessary to carry on the business and operations of the investment management corporation;

(b) supervise the day to day operations of the investment management corporation, including a determination of which assets to buy and sell;

(c) prepare a business plan and budget for approval by the investment management board;

(d) attend at meetings of the investment management board and receive a copy of all information provided to the board;

(e) establish policies and procedures to meet the operational objectives of the investment management corporation and the funds;

(f) develop a business continuation plan;

(g) keep all the records, books and accounts of the investment management corporation, and provide other accounting services as required by the trustees or other persons responsible for the funds and by the other clients of the investment management corporation;

(h) ensure that risk and returns are managed in a prudent and appropriate fashion, given the nature of the funds, and in accordance with any instructions provided by the trustees or other persons responsible for the funds;

(i) hire and dismiss the investment management corporation's external suppliers, including custodians and external fund managers;

(j) recommend changes in investment strategies and policies to clients of the investment management corporation;

(k) file documentation with the appropriate authorities and perform other regulatory duties as may be required under the Securities Act and other enactments;

(l) address any other matter arising out of the management of the investment management corporation that is necessary to properly carry out the provisions of this Part;

(m) exercise or perform any power or duty delegated to the chief investment officer by the investment management board under section 20 (3) (a).

(4) Subsection (3) (d) does not apply to the chief investment officer respecting matters referred to in section 20 (1) (a) and (b) or respecting matters in which there would be a conflict of interest.

(5) In exercising the powers or performing his or her duties, the chief investment officer may enter into agreements in the name of the investment management corporation.

(6) Agreements entered into by the chief investment officer are binding on the investment management corporation and those funds on behalf of which the chief investment officer is acting.

Officers and employees of the investment management corporation

22 (1) The Public Service Act and the Public Service Labour Relations Act do not apply to the investment management corporation or the officers and employees of the investment management corporation.

(2) The Pension (Public Service) Act and the Public Service Benefit Plan Act apply to the investment management corporation and to the officers and employees of the investment management corporation.

(3) If, immediately before appointment to or employment with the investment management corporation, an officer or employee has been confirmed in his or her employment under the Public Service Act, the officer or employee must not suffer a reduction in salary by reason only of his or her appointment or employment, and any monetary benefits that he or she would have enjoyed as a public service officer or employee continue to apply to him or her, subject to the terms of employment determined by the investment management corporation.

(4) An officer or employee referred to in subsection (3) who is appointed to or employed by the investment management corporation retains his or her length of service seniority acquired in the public service for determining his or her length of service seniority in the investment management corporation.

Chief investment officer's power to delegate

23 The chief investment officer may, on terms and conditions the chief investment officer considers advisable, delegate to any person or class of persons any of the chief investment officer's powers, functions or duties.

Operating costs and capital expenditures of the investment management corporation

24 (1) The investment management corporation must recover its operating costs and capital expenditures from one or more of the following:

(a) amounts charged to the funds for operating costs and capital expenditures necessarily incurred by the investment management corporation on behalf of the funds it manages;

(b) amounts charged to persons, organizations and other clients for services provided by the investment management corporation;

(c) income accruing from investments made by the investment management corporation on its own behalf.

(2) The investment management corporation may, in advance, submit a requisition quarterly to the funds for the amount required to cover the anticipated operating costs and capital expenditures necessarily incurred by the investment management corporation on behalf of those funds.

(3) The funds must pay to the investment management corporation, in quarterly installments from the funds, the amount requisitioned under subsection (2).

(4) The operating costs and capital expenditures of the investment management corporation attributable to the funds, as determined and certified by the chief investment officer, must

(a) be paid out of the money requisitioned under subsection (2), and

(b) to the extent to which the operating costs and capital expenditures paid out

(i) are less than the amount requisitioned, be reimbursed to the funds, or

(ii) are greater than the amount requisitioned, be paid from the funds.

(5) Capital expenditures of the investment management corporation may be paid from amounts borrowed by the investment management corporation.

Indemnification

25 (1) Despite section 75 of the Financial Administration Act, the investment management corporation may indemnify a person who is a director of the investment management board, an officer or employee of the investment management corporation or a person appointed to a committee of the board under section 20 (3) (d), or a former director, officer, employee or committee member, against all costs, charges and expenses actually and reasonably incurred by the person, including an amount paid to settle an action or satisfy a judgment in a civil, criminal or administrative action or proceeding to which the person is made a party because of being or having been a director, officer, employee or committee member, and including an action brought by the investment management corporation, if

(a) the director, officer, employee or committee member acted in good faith, and

(b) in the case of a criminal action or proceeding, the director, officer, employee or committee member had reasonable grounds for believing that his or her conduct was lawful.

(2) The investment management board may purchase and maintain, for the benefit of the investment management corporation or a director, officer, employee or committee member referred to in subsection (1), or any of them, insurance against liability incurred by the investment management corporation or by the director, officer, employee or committee member.


Part 4 -- Regulations and Transitional

Division 1 -- Regulations

Regulations

26 (1) The Lieutenant Governor in Council may make regulations referred to in section 41 of the Interpretation Act.

(2) Without limiting subsection (1), the Lieutenant Governor in Council may make regulations referred to in Part 5 of the Financial Administration Act with the necessary changes so that they apply to the investment management corporation under this Act.

(3) A regulation made under Part 5 of the Financial Administration Act applies, with the necessary changes and so far as it is applicable, to the investment management corporation as if made under this Act.


Division 2 -- Transitional

Transitional -- pension corporation

27 (1) All assets and liabilities of the body known as the Superannuation Commission within the Ministry of Finance and Corporate Relations, acting on behalf of the Minister of Finance and Corporate Relations, are transferred at fair market value to the pension corporation.

(2) To the extent the pension funds have paid for assets not reflected in the asset accounts of the body known as the Superannuation Commission within the Ministry of Finance and Corporate Relations, those assets are transferred to the pension corporation at fair market value, with an equivalent transfer of the deemed deferred trust revenue liability.

(3) To the extent that accounts payable and accrued liabilities of the body known as the Superannuation Commission within the Ministry of Finance and Corporate Relations were funded by the pension funds, an equivalent amount of cash must be transferred from the government to the pension corporation.

(4) All existing agreements and contracts entered into by the superannuation commissioner under the Pension (College) Act and the Pension (Public Service) Act, the commissioner of municipal superannuation under the Pension (Municipal) Act and the commissioner of teachers' pensions under the Pension (Teachers) Act, acting on behalf of the government, are transferred to the pension corporation.

Transitional -- investment management corporation

28 (1) All capital assets and liabilities of the office of the chief investment officer under the Financial Administration Act, acting on behalf of the Minister of Finance and Corporate Relations, are transferred at fair market value to the investment management corporation.

(2) Despite any other enactment, including the Financial Administration Act, all of the following apply on and after the date this section comes into force:

(a) any contract, commercial paper, lease, licence, permit, registration, security or other instrument or document that has been entered into, made or effected through a power of investment by the Minister of Finance and Corporate Relations or the chief investment officer is deemed to have been entered into, made or effected by the chief investment officer in the name of the investment management corporation;

(b) an amendment to any contract, commercial paper, lease, licence, permit, registration, security or other instrument or document referred to in paragraph (a) does not constitute a breach or contravention of or default under the contract, commercial paper, lease, licence, permit, registration, security or other instrument or document;

(c) the investment management corporation is exempt from any taxes, fees or other charges imposed by any enactment as a result of any amendment effected under paragraph (b).

(3) Each portfolio established under B.C. Reg. 84/86, the Pooled Investment Portfolios Regulation, is continued under this Act and the regulations.

(4) Each participating fund allocated units of a portfolio immediately before the coming into force of this Part must continue to be allocated those units of the portfolio with the investment management corporation holding those units as agent for the participating fund.

(5) All assets held under or in a portfolio by the Minister of Finance and Corporate Relations or the chief investment officer under the Financial Administration Act immediately before the coming into force of this Part must continue to be held under or in the portfolio, in trust, by the investment management corporation.

Transitional -- regulations

29 (1) The Lieutenant Governor in Council may make regulations respecting any matters necessary or advisable for more effectively bringing into operation the provisions of Parts 2 and 3 of this Act and for obviating any transitional difficulties encountered.

(2) Unless earlier repealed, a regulation made under this section is repealed one year after it is enacted.


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