53. A pensioner who is entitled to a deferred annuity and has not reached 50 years of age may opt for the payment of a transfer value, and the making of the option extinguishes the entitlement to the deferred annuity.
Marginal note:Time limit for opting
54. A pensioner shall make an option for the payment of a transfer value no later than one year after the day on which they cease to be a participant.
Marginal note:Option not made
55. The option is deemed not to have been made if, before the transfer value has been paid, the former participant again is entitled to receive earnings as a member or is required to contribute to the Canadian Forces Pension Fund.
Marginal note:Calculation of transfer value
56. The transfer value is an amount, together with interest calculated in accordance with section 62, equal to the greater of
(a) the actuarial present value, on the date of the option, of the accrued pension benefits that would be payable to or in respect of the pensioner, and
(b) a return of contributions, calculated as of the date of the option as if the pensioner had been entitled to a return of contributions on that date.
Marginal note:Pensionable earnings to pensioner’s credit
57. The calculation of the accrued pension benefits shall be based on the pensionable earnings to the pensioner’s credit on the day after the day on which they cease to be a participant and for which they have paid or ought to have paid before the date of the option.
Marginal note:Calculation rules
58. The calculation of the actuarial present value of the accrued pension benefits is subject to the following rules:
(a) the indexing benefits referred to in Division 3 are to be increased to take into account the period beginning on the later of January 1 of the year in which the option was made and the day on which the pensioner ceased to be a participant and ending on the date of the option; and
(b) the possibility that the pensioner could receive an annual allowance is to be excluded.
Marginal note:Actuarial valuation report
59. (1) For the purpose of subsection (2), the actuarial valuation report is the actuarial valuation report most recently laid before Parliament, under section 56 of the Act, before the date of the option or, if that report was laid before Parliament in the month in which the option was made or in the preceding month, the preceding report that was laid before Parliament, in each case with any terminological modifications that the circumstances require.
Marginal note:Actuarial assumptions
(2) In determining the actuarial present value of the accrued pension benefits, the following actuarial assumptions are to be used:
(a) the mortality rates for pensioners and survivors are the mortality rates, including annual percentages of mortality reduction, in respect of contributors and survivors used in the preparation of the actuarial valuation report;
(b) the interest rates are the interest rates for fully indexed pensions — adjusted by the interest rates for unindexed pensions to take into account Division 3 — determined in accordance with the section entitled “Pension Commuted Values” of the Standards of Practice — Practice-Specific Standards for Pension Plans, published by the Canadian Institute of Actuaries, as amended from time to time;
(c) the probability that a pensioner will be survived by children is based on the rates regarding the average number, average age and eligibility status of children at the death of a pensioner, used in the preparation of the actuarial valuation report;
(d) the probability that a pensioner will become entitled to an annuity under subsection 50(1) is based on the rates of termination owing to disability (any occupation), in respect of contributors used in the preparation of the actuarial valuation report, taking into account the probability — as set out in that report — that there would be immediate eligibility for a disability pension under the Canada Pension Plan or a provincial pension plan; and
(e) the probability that a pensioner will have a survivor at death is based on the probability that a contributor will have a survivor at death and on the age difference between the contributor and the survivor that was used in the preparation of the actuarial valuation report.
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