HONOURABLE MICHAEL DE JONG
MINISTER OF FINANCE

BILL 10 — 2014

PENSION BENEFITS STANDARDS
AMENDMENT ACT, 2014

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

1 Section 1 (1) of the Pension Benefits Standards Act, S.B.C. 2012, c. 30, is amended

(a) by repealing the definition of "actuarial excess" and substituting the following:

"actuarial excess", in relation to a pension plan that has not been terminated, means the amount, if any, by which the value of the assets of the plan exceeds the value of the liabilities of the plan, both calculated in the prescribed manner; ,

(b) in paragraph (b) of the definition of "commuted value" by striking out "the total amount of the contributions that are or were required to be made in relation to those benefits, and includes interest on those contributions" and substituting "the balance in the person's defined contribution account",

(c) in the definition of "defined contribution provision" by repealing paragraph (a) and substituting the following:

(a) contemplates that an actual or notional account will be maintained to record

(i) the contributions, other than additional voluntary contributions, made by or on behalf of a member,

(ii) the interest allocated to the account, and

(iii) administration expenses and other money deducted by payment, transfer or withdrawal from the money referred to in subparagraphs (i) and (ii), and ,

(d) by repealing the definition of "designated beneficiary" and substituting the following:

"designated beneficiary" means,

(a) in relation to a member, a person designated under section 46 (2) of the Law and Equity Act to receive a benefit payable under a plan in the event of the member's death, or

(b) in relation to the surviving spouse of a member, a person designated by the surviving spouse of the member to receive a benefit payable under a plan in the event of the spouse's death; , and

(e) by repealing the definition of "surplus" and substituting the following:

"surplus", in relation to a pension plan that has been terminated, means the amount, if any, by which the value of the assets of the plan exceeds the value of the liabilities of the plan, both calculated in the prescribed manner; .

2 Section 2 (a) is amended by striking out "this Act applies" and substituting "this Act and the regulations apply".

3 Section 20 (2) is amended by striking out "or" at the end of paragraph (b), by adding ", or" at the end of paragraph (c), and by adding the following paragraph:

(d) may amend the plan text document of a multi-employer plan that is a negotiated cost plan in order to convert, in accordance with the rules prescribed under section 92, a defined benefit provision of the plan to a target benefit provision, which conversion may reduce accrued benefits if the trade union whose membership includes or consists of members of the plan agrees to the reduction.

4 Section 22 (2) (a) and (3) is amended by striking out "does not comply with this Act and the regulations" and substituting "does not comply with this Act or the regulations".

5 Section 34 is amended by striking out "subject to and in accordance with the regulations," and substituting "in accordance with the regulations and any requirements of the superintendent,".

6 Section 36 (2) is amended by striking out "must notify the superintendent" and substituting "must notify the superintendent, in the form and manner required by the superintendent,".

7 Section 37 (3) (b) is amended by striking out "delivers" and substituting "provides".

8 Section 38 (1) (c) is repealed and the following substituted:

(c) prescribed financial statements, in prescribed circumstances, prepared in accordance with prescribed standards.

9 Section 40 is amended by striking out "the administrator must" and substituting "the administrator must, in accordance with the regulations,".

10 Section 49 is amended

(a) in subsections (1) and (2) by adding "or former participating employer" after "participating employer", and

(b) in subsection (2) (a) by adding "or former participating employer's" after "participating employer's".

11 Section 52 is amended

(a) in subsection (2) (b) by striking out "any direction of the superintendent" and substituting "any notification provided by the superintendent", and

(b) in subsections (3) and (4) by striking out "in the case of a pension plan in which liability for funding benefits under the plan is shared between the participating employers and the active members," and substituting "in the case of a jointly sponsored plan,".

12 Section 54 (5) is amended by adding "or surplus" after "prescribed actuarial excess".

13 Section 56 (5) is amended by striking out "a single employer plan" and substituting "a pension plan, other than a collectively bargained multi-employer plan,".

14 Section 57 is amended

(a) by repealing subsection (1) and substituting the following:

(1) This section applies to contributions applicable to, and to benefits under, a benefit formula provision, other than contributions applicable to, and benefits under, a jointly sponsored plan. , and

(b) in subsection (5) by striking out "the termination of his or her membership" and substituting "the termination of his or her active membership".

15 Section 58 (2) is amended by striking out "section 56 (1)" and substituting "section 56 (2)".

16 Section 59 (b) is repealed and the following substituted:

(b) the return is permitted under the Income Tax Act (Canada).

17 Section 60 (3) is repealed.

18 Section 61 (a) is repealed and the following substituted:

(a) all contributions to a pension plan, other than

(i) participating employer contributions required under a benefit formula provision, and

(ii) member contributions required under a benefit formula provision of a jointly sponsored plan; .

19 Section 62 (1) is amended by adding ", other than actuarial excess or surplus in a solvency reserve account as defined in section 54 (1)," after "any actuarial excess or surplus of the plan".

20 Section 63 (1) is amended by adding "other than actuarial excess in a solvency reserve account as defined in section 54 (1)," after "the plan has actuarial excess,".

21 Section 68 (1) (a) is amended by striking out "a member must not withdraw, surrender or receive the commuted value of any or all of that portion of the commuted value" and substituting "a member must not withdraw, surrender or receive any or all of that portion of the commuted value".

22 Section 69 is amended

(a) by repealing subsection (1) and substituting the following:

(1) The plan text document of a pension plan must provide that a deferred member, a retired member who is receiving life income type benefits or the surviving spouse of a deceased member is entitled to receive payment of a lump-sum amount equal to the total of the commuted value of the benefits to which the deferred member, retired member or surviving spouse is entitled under the plan if that total does not exceed the prescribed amount. ,

(b) by repealing subsection (3) (a) and substituting the following:

(a) if a person who has a current entitlement to receive a benefit under the plan, other than a person who is receiving a pension under a benefit formula provision, has an illness or a disability that is certified by a medical practitioner to be terminal or likely to shorten the person's life considerably, that person may, subject to and in accordance with the regulations,

(i) elect to convert all or part of the benefit on the prescribed basis to a series of payments for a fixed term to that person, or

(ii) elect to withdraw as a lump sum an amount equal to the commuted value of the benefit or any lesser amount that the person may select; ,

(c) in subsection (4) (b) by striking out ", or his or her surviving spouse," and by striking out "or his or her surviving spouse", and

(d) by repealing subsection (5) and substituting the following:

(5) If a member who is eligible to make an election under subsection (3) has a spouse, the member must not make that election unless the administrator has received a statement by the spouse in the prescribed form that

(a) states that the spouse is aware of his or her entitlements under the pension plan,

(b) waives those entitlements, and

(c) was signed by the spouse, not more than 90 days before the member makes the election, in the presence of a witness and outside the presence of the member.

23 Section 70 is amended

(a) in subsection (1) (c) (i) by striking out "or 79 (1) (a) (i) and (3)" and substituting ", 79 (1) (a) (i) or (3) or 89.1", and

(b) in subsection (4) by adding the following paragraphs:

(d) a payment under section 57 (4) (a) or (6) (b);

(e) a return of a contribution under section 59;

(f) a withdrawal, a payment or any payments in a series of payments under section 69 (1), (2), (3) or (4).

24 Section 75 (a) is repealed and the following substituted:

(a) complies with the Income Tax Act (Canada), and .

25 Section 76 (1) is amended

(a) by striking out "The plan text document of a pension plan" and substituting "The plan text document of a pension plan that contains a defined contribution provision", and

(b) by striking out "in an amount determined under the regulations" and substituting "in an amount that does not exceed the prescribed amount".

26 Section 79 (1) (b) is amended by striking out everything after subparagraph (ii) and substituting the following:

but in no case is the surviving spouse entitled to receive any benefit by way of a lump-sum payment as designated beneficiary under subparagraph (i) of this paragraph, or .

27 Section 80 is amended

(a) in subsection (4) by striking out ", not more than 90 days before the member's pension commencement date,",

(b) by repealing subsection (4) (a) (iii) and substituting the following:

(iii) was signed by the spouse, not more than 90 days before the member's pension commencement date, in the presence of a witness and outside the presence of the member, or ,

(c) in subsection (6) by striking out ", before the member reached the member's pension commencement date and before the member's death,", and

(d) by repealing subsection (6) (a) (iii) and substituting the following:

(iii) was signed by the spouse, before the member's death, in the presence of a witness and outside the presence of the member, or .

28 The following division is added to Part 8:

Division 8 — Transfer of Assets by Administrator
for Purchase of Annuity

Annuity purchases

89.1  (1) Subject to this section and the regulations, the plan text document of a pension plan that contains a defined benefit provision may provide that the administrator of the plan may, if the plan has not been terminated, transfer assets from the portion of the plan that relates to the defined benefit provision

(a) in respect of a deferred member who is entitled to a benefit under the defined benefit provision, or

(b) in respect of a person who is receiving a pension under the defined benefit provision

to an insurance company in order to purchase an annuity in the form of a pension that is required or allowed by this Act.

(2) If an annuity is to be purchased under subsection (1), the administrator must ensure that the annuity,

(a) in respect of a deferred member, provides the member with the same benefits as the member would have received from the pension plan had the transfer not been made, and

(b) in respect of a person who is receiving a pension, provides payments to the person in the same amount and form as the pension that the person would have received from the pension plan had the transfer not been made.

(3) When the administrator has complied with this section and the regulations in respect of the purchase of an annuity referred to in subsection (1), the administrator, a participating employer, a former participating employer or another person who is or was required to make contributions to the plan is discharged from further liability to the person in respect of whose benefits the annuity has been purchased.

29 Section 102 (b) is repealed and the following substituted:

(b) file any other record required by the superintendent, and .

30 Section 105 (b) is amended by striking out "a retired member" and substituting "a person who is receiving a pension".

31 Section 108 is amended

(a) in subsection (3) (a) (ii) by striking out "assets" and substituting "surplus", and

(b) by repealing subsection (3) (b) and substituting the following:

(b) subject to this Act and the regulations, and if he or she provides written notice to the other party to the contract, assumes, in relation to any contract that had been entered into by any person contracting on behalf of the plan, the rights and duties of that person under the contract.

32 Section 129 (1) is amended in the definition of "specified multi-jurisdictional plan" by striking out "to which the following apply:" and substituting "to which both of the following apply:".

33 Section 133 (2) is amended

(a) in paragraph (e) by striking out "manner of delivery" and substituting "manner of provision",

(b) by repealing paragraph (g) and substituting the following:

(g) respecting the retention of records relating to pension plans; ,

(c) in paragraph (i) by adding "or surplus" after "the actuarial excess" in both places,

(d) in paragraph (j) by striking out "or (4) (a)",

(e) by repealing paragraph (l) and substituting the following:

(l) respecting transfers to and from a locked-in retirement account or a retirement income arrangement, including, without limitation, prescribing conditions on which the transfers may be made and requiring that transfers to a locked-in retirement account or retirement income arrangement be made to an entity on the list referred to in paragraph (k);

(l.1) establishing terms and conditions that must be included in a contract for a locked-in retirement account or retirement income arrangement and deeming

(i) the terms and conditions to be included in all contracts for locked-in retirement accounts or retirement income arrangements, whether entered into before or after the regulation establishing the terms and conditions comes into force, and

(ii) amendments made to the terms and conditions referred to in subparagraph (i) to be included in all contracts for locked-in retirement accounts or retirement income arrangements, whether entered into before or after the amendments come into force;

(1.2) providing that, in the event of a conflict between a provision of a contract for a locked-in retirement account or retirement income arrangement and a term or condition established under paragraph (l.1), the term or condition prevails;

(l.3) respecting the duties, responsibilities and liabilities of issuers of locked-in retirement accounts or retirement income arrangements, including, without limitation, the duties, responsibilities and liabilities of issuers when they pay or transfer money from a locked-in retirement account or retirement income arrangement contrary to the Act and the regulations;

(l.4) setting out the duties and responsibilities of an administrator and the liabilities of an administrator, a participating employer, a former participating employer or another person who is required to make contributions to the plan when a payment or transfer of money from a locked-in retirement account or retirement income arrangement has been made from the plan contrary to the Act or the regulations; , and

(f) by adding the following paragraphs:

(s) allowing an administrator, without limiting any other mode of service, to meet a requirement under this Act to provide any statement, information or notice by sending the statement, information or notice by ordinary mail to a member or other person at the last known postal address of the member or other person and in prescribed circumstances, relieving the administrator of the requirement in relation to that member or other person;

(t) setting out, in relation to funding requirements, matters that must be determined in the preparation of an actuarial valuation report and a process that must be followed if the funding requirements are not being met.

34 Section 138 (b) is amended in the definition of "defined contribution provision" by repealing paragraph (a) and substituting the following:

(a) contemplates that an actual or notional account will be maintained to record

(i) the contributions, other than additional voluntary contributions within the meaning of the Pension Benefits Standards Act, made by or on behalf of a member,

(ii) the interest, within the meaning of the Pension Benefits Standards Act, allocated to the account, and

(iii) administration expenses and other money deducted by payment, transfer or withdrawal from the money referred to in subparagraphs (i) and (ii), and .

35 Sections 157 to 162 are repealed.

36 Section 168 is repealed and the following substituted:

Public Sector Pension Plans Act

168 Sections 16.5 of Schedule A, 18.4 of Schedule B, 18.4 of Schedule C and 18.4 of Schedule D of the Public Sector Pension Plans Act, S.B.C. 1999, c. 44, are amended by striking out "section 1 (8) of the Pension Benefits Standards Act and".

Amendment to this Act

37 If the definition of "designated beneficiary" in section 1 (1) of the Wills, Estates and Succession Act, S.B.C. 2009, c. 13, comes into force before the date section 1 (d) of this Act comes into force, section 1 (d) of this Act is repealed.

Commencement

38 The provisions of this Act referred to in column 1 of the following table come into force as set out in column 2 of the table:

Item Column 1
Provisions of Act
Column 2
Commencement
1 Anything not elsewhere covered by this table By regulation of the Lieutenant Governor in Council
2 Section 37 On the date the definition of "designated beneficiary" in section 1 (1) of the Wills, Estates and Succession Act, S.B.C. 2009, c. 13, comes into force