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O. Reg. 398/02: PENSION PLAN FOR BOARD EMPLOYEES

filed December 20, 2002 under Workplace Safety and Insurance Act, 1997, S.O. 1997, c. 16, Sched. A

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ontario regulation 398/02

made under the

workplace safety and insurance act, 1997

Made: November 8, 2002
Approved: December 18, 2002
Filed: December 20, 2002
Printed in The Ontario Gazette: January 4, 2003

Amending O. Reg. 455/97

(Pension Plan for Board Employees)

1. Section 1 of Ontario Regulation 455/97 is amended by adding the following definition:

“temporary employee” means a person who is employed under a contract of service for a limited period of employment;

2. Subsection 3 (3) of the Regulation is revoked and the following substituted:

(3) Subject to subsection (4), any period during which a member is absent from work on a leave of absence or solely because of a lay-off, strike or lock-out shall not be included in the calculation of the length of the member’s period of continuous employment, membership or service.

3. Section 4 of the Regulation is amended by adding the following subsection:

(3.1) Despite subsection (1), a member’s earnings include the amount of any one-time lump sum merit award under the Board’s salary plan for non-bargaining unit employees.  

4. Section 7 of the Regulation is amended by adding the following subsection:

(3) A member of the board of directors is a member of the pension plan beginning on the date that he or she becomes a full-time member of the board of directors.

5. Subsections 8 (2) and (3) of the Regulation are revoked and the following substituted:

(2) A temporary employee is not eligible to make an election under subsection (1) if, at the date of the election, the earnings of the employee in the 12-month period preceding that date were less than 35 per cent of the Year’s Maximum Pensionable Earnings and the employee worked fewer than 700 hours during that 12-month period. 

(3) A person who is hired under a contract for services is not eligible to be a member of the pension plan.

6. (1) Subsection 11 (2) of the Regulation is amended by striking out “under subsection (1) or (9)” and substituting “under subsection (1) or section 11.1 or 11.3”.

(2) Subsection 11 (3) of the Regulation is amended by striking out “of subsections (1) and (9)” and substituting “of subsection (1) and sections 11.1 and 11.3”.

(3) Subsections 11 (6), (7), (8), (9) and (10) of the Regulation are revoked.

7. The Regulation is amended by adding the following sections:

Special Contribution Rules for Members
for January 1, 2003 to December 31, 2005

11.1 (1) Despite subsection 11 (1), from January 1, 2003 until December 31, 2005, the amount of member contributions shall be determined in accordance with this section and with sections 11.2 and 11.3.

(2) From January 1, 2003 until December 31, 2003, both inclusive, member contributions under subsection 11 (1) shall be suspended and no deductions shall be made from a member’s earnings under subsection 11 (5) during that period.

(3) From  January 1, 2004 until December 31, 2004, both inclusive, every member shall contribute to the pension fund from his or her earnings for the year,

(a) 3 per cent of the amount of his or her earnings that does not exceed the Year’s Basic Exemption;

(b) subject to subsection (5), 1.2 per cent of the amount of his or her earnings that exceeds the Year's Basic Exemption but does not exceed the Year’s Maximum Pensionable Earnings; and

(c) subject to subsection 11 (2), 3 per cent of the amount of his or her earnings that exceeds the Year’s Maximum Pensionable Earnings. 

(4) From January 1, 2005 until December 31, 2005, both inclusive, every member shall contribute to the pension fund from his or her earnings for the year,

(a) 5 per cent of the amount of his or her earnings that does not exceed the Year’s Basic Exemption;

(b) subject to subsection (6), 3.2 per cent of the amount of his or her earnings that exceeds the Year's Basic Exemption but does not exceed the Year’s Maximum Pensionable Earnings; and

(c) subject to subsection 11 (2), 5 per cent of the amount of his or her earnings that exceeds the Year’s Maximum Pensionable Earnings.

(5) During the period that member contributions are reduced under subsection (3), if  a member continues to be employed by the Board after his or her normal retirement date and is receiving a retirement pension under the Canada Pension Plan, the amount the member shall contribute under clause (3) (b) is 3 per cent of the amount of his or her earnings that exceeds the Year’s Basic Exemption but does not exceed the Year’s Maximum Pensionable Earnings, rather than the amount set out in clause (3) (b).

(6) During the period that member contributions are reduced under subsection (4), if  a member continues to be employed by the Board after his or her normal retirement date and is receiving a retirement pension under the Canada Pension Plan, the amount the member shall contribute under clause (4) (b) is 5 per cent of the amount of his or her earnings that exceeds the Year’s Basic Exemption but does not exceed the Year’s Maximum Pensionable Earnings, rather than the amount set out in clause (4) (b).

11.2 (1) In this section,

“apportionable excess surplus” means the amount of excess surplus identified in the actuarial valuation for 2003 or 2004, as the case may be, that the Board is required to apply to reduce its contributions under the pension plan under subsection 16 (2);

“excess surplus” means the amount of actuarial surplus in the pension fund that exceeds the limit established in paragraph 147.2 (2) (d) of the Income Tax Act (Canada).

(2) Despite section 11.1, if the actuary determines in the annual actuarial valuation for the year 2003 or 2004 that there is excess surplus in the pension fund, member contributions under section 11.1 shall be adjusted in accordance with this section.

(3) The amount of the apportionable excess surplus shall be apportioned between the Board and the members based on the ratio that the Board’s then current contribution rate bears to the then current members’ contributions based upon the then current members’ contribution rate as described in subsections 11.1 (3) and (4).

(4) On July 1 of 2004 or 2005, as the case may be, the member contribution rate established for that year in subsection 11.1 (3) or (4), as applicable, will be adjusted if necessary to reflect the amount of any apportionable excess surplus attributed to the members under subsection (3). 

(5) Subject to the adjustment made to the member contribution rate under section 11 or 11.1, as the case may be, on January 1 of the following year, the adjusted member contribution rate that applies under subsection (4) shall continue in effect until June 30 of the next following year.

11.3 (1) Despite section 11.1, if the actuary determines in the annual actuarial valuation for any of the years 2002, 2003 or 2004 that the amount of actuarial surplus in the pension fund is less than $50,000,000, member contributions under section 11.1 shall be adjusted in accordance with this section.

(2) On July 1 of 2003, 2004 or 2005, as the case may be, member contributions shall be adjusted so that every member shall contribute to the pension fund from his or her earnings for the year,

(a) 7 per cent of the amount of his or her earnings that does not exceed the Year’s Basic Exemption;

(b) subject to subsection 11 (4), 5.2 per cent of the amount of his or her earnings that exceeds the Year's Basic Exemption but does not exceed the Year’s Maximum Pensionable Earnings; and

(c) subject to subsection 11 (2), 7 per cent of the amount of his or her earnings that exceeds the Year’s Maximum Pensionable Earnings.

(3) If member contributions are adjusted under this section, members shall continue to contribute at the rate set out in subsection (2) until December 31, 2005 and no adjustments to the amount of member contributions shall be made under section 11.1.

8. The Regulation is amended by adding the following heading immediately before section 12:

Employer Contributions

9. Subsection 27 (4) of the Regulation is amended by striking out “under subsection 11 (4) or (10)” and substituting “under subsection 11 (4) or 11.1 (5) or (6)”.

10. Subsections 28 (6) and (7) of the Regulation are revoked and the following substituted:

(6) A member whose age, when added to the number of years of his or her continuous membership in the pension plan, totals at least 80 may elect to receive an early retirement pension if the election is made before January 1, 2004.

(7) A member may elect before January 1, 2004 to receive an early retirement pension if,

(a) the member begins a paid leave of absence before December 31, 2003; and

(b) the member’s age, at the end of the paid leave, when added to the number of years of his or her continuous membership in the pension plan at the end of the paid leave, totals at least 80.

11. Paragraph 1 of subsection 30 (3) of the Regulation is revoked and the following substituted:

1. The amount of the pension, before any actuarial reduction is made under this section, is calculated in the same manner as a normal retirement pension under section 27.  “C” in the formula is then added back into the calculation of the amount of the early retirement pension until the person's normal retirement date.

12. Subsection 31 (2) of the Regulation is revoked and the following substituted:

(2) The amount of the pension is calculated in the same manner as a normal retirement pension under section 27.  “C” in the formula is then added back into the calculation of the amount of the early retirement pension until the person’s normal retirement date.

13. Subsection 45.0.1 (4) of the Regulation is revoked and the following substituted:

(4) Despite section 45, on January 1, 2003, all pensions referred to in subsections 44 (1) and (1.1) and all deferred pensions shall be increased by the adjusted indexing factor rather than by the indexing factor determined under section 45.

14. Part VII.1 of the Regulation is amended by adding the following section:

45.2 (1) In this section,

“adjusted indexing factor” means the indexing factor determined in accordance with this section.

(2) Every early retirement pension being paid under section 28 on January 1, 2003 shall be adjusted in accordance with this section.

(3) The adjusted indexing factor for the year is 100 per cent of the percentage change in the Consumer Price Index for Canada for all items, for the 12-month period ending October 31 of the previous year, as published by Statistics Canada.

(4) If the adjusted indexing factor for the year is greater than 8 per cent, it is deemed to be 8 per cent.

(5) On January 1, 2003, the amount “C” that was added back into the calculation of the amount of every early retirement pension in payment calculated under subsection 30 (3) or 31 (2), as the case may be, shall be increased by the adjusted indexing factor.

15. Sections 46 and 47 are revoked and the following substituted:

46. (1) A member may elect to purchase pensionable service under the pension plan for a period of employment with the Board for which the member does not already have credit under the pension plan.

(2) The member shall make contributions in the amount determined by the actuary in accordance with generally accepted actuarial principles.

(3) Subject to subsection (4), a member may not purchase pensionable service under the pension plan for a period of employment for which the member has transferred money from the pension fund,

(a) to a registered pension plan;

(b) to a locked-in registered retirement savings plan; or

(c) for the purchase of a life annuity payable not earlier than the date on which the member would have been entitled to receive a pension under this pension plan.

(4) A member may purchase pensionable service under the pension plan for a period of employment with the Board for which the member previously transferred money from the pension fund to a plan described in clause (3) (a) or (b) if the funds previously transferred from the pension fund under subsection (3), along with the accumulated investment income, if any, are transferred directly from that plan to the pension fund.

(5) If a member purchases pensionable service referred to in subsection (4), and the actuary determines, in accordance with generally accepted actuarial principles, that there is a shortfall between the amount that is transferred into the pension fund under subsection (4) and the amount required to purchase the full pensionable service, the member may contribute the amount of the shortfall.

47. (1) A temporary employee who becomes a member of the pension plan may elect to be deemed to have become a member of the pension plan on the date on which he or she began employment as a temporary employee and may purchase pensionable service under the pension plan for any period during which he or she was a temporary employee.

(2) A member who purchases pensionable service under subsection (1) for a period of continuous employment as a temporary employee leading to membership in the pension plan shall make contributions equal to the amount he or she would have contributed to the pension plan had he or she been a member during that period plus the amount that the Board would have been credited as having contributed on his or her behalf for the same period.

(3) A member who purchases pensionable service under subsection (1) for a period of prior employment as a temporary employee that is not continuous with the period of employment leading to membership in the pension plan shall make contributions in the amount determined by the actuary in accordance with generally accepted actuarial principles.

16. The Regulation is amended by adding the following section:

51.1 (1) A member who is absent from work without earnings solely because of a lay-off, strike or lock-out may elect to purchase pensionable service under the pension plan for the period of the absence.

(2) An election under subsection (1) must be made within the six-month period beginning on the date that the member returns to work.

(3) The member shall make contributions equal to the amount he or she would have contributed to the pension plan had the absence not occurred.

(4) The member shall make the contributions under subsection (3) within the six-month period beginning on the date that the member returns to work.

(5) If the member makes an election under subsection (1) and makes the contributions under subsection (3), the Board shall make the Board’s contributions with respect to the member for the period of the absence.

(6) Despite subsections (2), (3) and (4), the member may elect to purchase the pensionable service after the end of the six-month period and shall make contributions in the amount determined by the actuary in accordance with generally accepted actuarial principles.

17. Section 55 of the Regulation is revoked and the following substituted:

55. (1) A person who becomes a member of the pension plan may elect to transfer pensionable service from another registered pension plan.

(2) An election under subsection (1) must be made within 18 months of the person ceasing to be a member of the other registered pension plan and within 6 months of the person becoming a member of the pension plan.

(3) The amount of pensionable service that is credited to the member under subsection (1) shall be determined by the actuary in accordance with generally accepted actuarial principles.

(4) If an amount of money is transferred to the pension fund from a fund maintained to provide benefits under the registered pension plan of which the person was previously a member in connection with a transfer of pensionable service under subsection (1), that portion of the money that may reasonably be considered to derive from the person’s contributions to the other fund, with interest, is deemed to be the person’s contributions under the pension plan.

(5) A person is not eligible to be credited with pensionable service under the pension plan if the person remains entitled to credit for the same pensionable service under the other registered pension plan.

(6) Despite subsections (2) to (4), if a person transfers pensionable service from a registered pension plan of an organization with which the Board has concluded a reciprocal agreement under subsection 171 (7) of the Act, the transfer shall be made in accordance with the terms of the reciprocal agreement.

18. This Regulation comes into force on January 1, 2003.

Workplace Safety and Insurance Board:

R.S. Hikel

Chair

L. Angove

Secretary

Dated on November 8, 2002.