Canadian Forces Superannuation Regulations (C.R.C., c. 396)

Adjustment — Previous Annual Allowance

• 16.7 (1) The adjustment referred to in subsections 18(4) and 21(2) of the Act shall be made by deducting from the amount of the annuity or annual allowance an amount determined in accordance with the formula

  A × B

  where

  A

  is 5% of the annual allowance that the contributor was receiving before again becoming a member of the regular force or before becoming entitled to a disability pension under the Canada Pension Plan or a provincial pension plan; and

  B

  is the lesser of

  • (a) the number of years, rounded to the nearest 1/10, during which the contributor received the annual allowance, and

  • (b) if the amount of the allowance was determined under

    • (i) subsection 18(2) of the Act, 60 minus the contributor’s age in years, rounded to the nearest 1/10, at the time at which the allowance is payable, or

    • (ii) subsection 18(3) of the Act, the lesser of

      (A)

      the number resulting from the calculation in subparagraph (i), and

      (B)

      the greater of the numbers calculated under subparagraphs 18(3)(b)(i) and (ii) of the Act in the determination of the original allowance.

• (2) The amount to be deducted under subsection (1) shall not result in the contributor receiving less than the amount of the annual allowance that the contributor was receiving before the contributor again became a member of the regular force or before the contributor became entitled to the disability pension, less any amount that is deducted under subsection 15(2) of the Act.

• (3) The amount to be deducted under subsection (1) shall not exceed the total amount that was received as an annual allowance by the contributor before the contributor again became a member of the regular force or became entitled to the disability pension.

Transfer Value

16.8 A contributor who is described in subsection 22(1) of the Act and has not reached 50 years of age may opt for the payment of the transfer value referred to in that subsection.

16.9 A contributor shall exercise the option for the payment of a transfer value no later than the later of one year after the day on which they cease to be a member of the regular force and March 1, 2008.

16.91 The contributor is deemed not to have exercised the option for the payment of a transfer value if, before the transfer value has been paid, the contributor again becomes, or under section 8.1 is considered to be, a member of the regular force.

16.92 The transfer value is an amount, together with interest calculated in accordance with section 16.98, 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 contributor, and

• (b) a return of contributions, calculated as of the date of the option as if the contributor had been entitled to a return of contributions on that date.

• 16.93 (1) The calculation of the accrued pension benefits shall be based on the pensionable service to the contributor’s credit on the day after the day on which they cease to be a member of the regular force and the pensionable service shall include only the portion of the pensionable service that is subject to an election — other than a pensionable earnings election or an election under clauses 6(b)(ii)(G) and (H) of the Act, as adapted by subsection 12.2(2) — for which the contributor has paid or ought to have paid before the date of the option.

• (2) For the purposes of the calculation of the accrued pension benefits, the calculation of the adjustment referred to in section 16.6 is subject to the following rules:

  • (a) if the pensionable service to the contributor’s credit includes pensionable service that was subject to a pensionable earnings election or an election under clauses 6(b)(ii)(G) and (H) of the Act, as adapted by subsection 12.2(2) of these Regulations, the contributor is considered to have opted at the time of the election to pay a lesser amount corresponding to the payments in respect of the election that were made or ought to have been made on or before the date of the option for the payment of a transfer value;

  • (b) if the contributor has made a top-up election under section 14.2, the contributor is considered to have opted at the time of the election to pay a lesser amount corresponding to the payments in respect of the top-up election that were made or ought to have been made on or before the date of the option for the payment of a transfer value; and

  • (c) if the top-up election was made in respect of pensionable service that came to the contributor’s credit under a pensionable earnings election, for the purposes of calculating the full amount referred to in paragraph 14.6(3)(b) in respect of the pensionable earnings election, the proportion referred to in the description of E in that paragraph is calculated on the basis that the contributor opted for a lesser amount, at the time of the pensionable earnings election, equal to the amount referred to in paragraph (a).

16.94 The calculation of the actuarial present value of the accrued pension benefits is subject to the following rules:

• (a) the supplementary benefits 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 exercised and the day on which the contributor ceased to be a member of the regular force and ending on the date of the option; and

• (b) the possibility that the contributor may receive an annual allowance is to be excluded.

• 16.95 (1) For the purposes 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 exercised or in the preceding month, the preceding report that was laid before Parliament.

• (2) In determining the actuarial present value of a contributor’s accrued pension benefits, the following actuarial assumptions are to be used:

  • (a) the mortality rates for contributors and survivors are the mortality rates, including annual percentages of mortality reduction, 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 Part III of the Act — 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 contributor 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 contributor, used in the preparation of the actuarial valuation report;

  • (d) the probability that a contributor will become entitled to an annuity under paragraph 16(1)(d) of the Act is based on the rates of termination owing to disability 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 contributor 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 those persons that was used in the preparation of the actuarial valuation report.

16.96 There shall be deducted from the amount of the transfer value

• (a) contributions remaining unpaid in respect of pay that the contributor is deemed to have received under subsections 11(4) and (4.1); and

• (b) arrears in respect of a pensionable earnings election, an election made under section 6 of the Act or clauses 6(b)(ii)(G) and (H) of the Act, as adapted by subsection 12.2(2), or a top-up election made under section 14.2.

• 16.97 (1) A retirement savings plan prescribed for the purposes of section 26 of the Pension Benefits Standards Act, 1985 is prescribed as a kind of retirement savings plan or fund for the purposes of paragraph 22(2)(b) of the Act.

• (2) A deferred life annuity and an immediate life annuity, as defined in subsection 2(1) of the Pension Benefits Standards Regulations, 1985, are prescribed as a kind of deferred life annuity and a kind of immediate life annuity for the purposes of paragraph 22(2)(c) of the Act.

• (3) Any portion of the transfer value, the payment of which is being effected by a transfer under subsection 22(2) of the Act, that is in excess of the amount that may be transferred in accordance with section 8517 of the Income Tax Regulations shall be paid to the contributor.

• (4) If, after the option for the payment of the transfer value described in section 22 of the Act has been exercised but before that payment has been effected, the contributor dies, the following rules apply:

  • (a) the amount that may be transferred shall be paid accordingly and any excess shall be paid

    • (i) to the person who would have been entitled to an annual allowance as a survivor under subsection 25(1) of the Act had the option for the payment of a transfer value not been exercised, or

    • (ii) to the contributor’s estate or succession if there is no person who would have been entitled to the annual allowance as a survivor; or

  • (b) if no amount may be transferred, all of the transfer value shall be paid in accordance with subparagraphs (a)(i) and (ii).

• (5) If there are two persons who would have been entitled to an annual allowance under subsection 25(1) of the Act as survivors had the transfer value option not been exercised, each of them shall be entitled to a share of the excess or of the transfer value, as the case may be, determined by the formula

  A × B/C

  where

  A

  is the amount of the excess or of the transfer value;

  B

  is the total number of years that the person cohabited with the contributor while married to or in a relationship of a conjugal nature with the contributor; and

  C

  is the sum of the number of years that each of the two persons cohabited with the contributor while married to or in a relationship of a conjugal nature with the contributor.

• (6) In determining the number of years for the purpose of subsection (5), part of a year shall be counted as a full year if the part is six or more months and shall be ignored if it is less.

• 16.98 (1) Interest shall be calculated, in accordance with the rate determined under subsections (2) and (3), and converted to an effective annual rate, for the period beginning on the date of the option and ending on the last day of the month before the month in which the transfer value is paid or, if the contributor has not yet given the direction referred to in subsection 22(2) of the Act, ending 90 days after the date of the option.

• (2) The rate of interest is equal to the rate of return that existed in respect of the second quarter before the date of the option and set out in the table entitled “Balanced” on the line “Mercer Median” in the column entitled “3 Months” in the Summary of Investment Performance Survey of Canadian Institutional Pooled Funds, published by Mercer Investment Consulting, as amended from time to time.

• (3) If the rate of return is negative, the rate of interest is 0.0%.

16.99 If a division of a contributor’s pension benefits is effected under the Pension Benefits Division Act before the day on which payment of a transfer value is effected, the transfer value shall be reduced to take into account the adjustment to the pension benefits made in accordance with section 21 of the Pension Benefits Division Regulations.

16.991 [Repealed, SOR/2016-64, s. 27]

Payments to Survivor and Children

17 For the purposes of subsection 31(2) of the Act, if a child was born to a person at a time when that person was over 60 years of age and, after that time, that person did not become or continue to be a contributor, the child is not entitled to an allowance under the Act unless the child was born following a gestation period that commenced prior to the date when the contributor attained the age of 60 years or ceased to be a member of the regular force, whichever is later.

18 For the purposes of paragraph 25(5)(b) of the Act, “full-time attendance at a school or university” means enrolment in and pursuance of a full-time course of training or instruction given by a school, college, university or other institution of an educational, professional or technical nature and, for these purposes, full-time attendance includes situations in which the child

• (a) is again enrolled in and pursuing a full-time course of study, or dies, no later than the last day of the fifth month after the month in which the child ceased to be enrolled in and to pursue the full-time course of study; or

• (b) is not again enrolled in and pursuing a full-time course of study within that period owing to their illness and is again enrolled in and pursuing a full-time course of study, or dies, no later than the last day of the twelfth month after the month in which the child ceased to be enrolled in and to pursue the full-time course of study.

19 [Repealed, SOR/2007-33, s. 10]

Limit on Child’s Entitlement

19.1 Notwithstanding subsection 25(4) of the Act, a child of a contributor who dies after May 15, 1997 is not entitled to an annual allowance under section 25 of the Act unless, at the time of the contributor’s death, the child was dependent on the contributor for support.

Limits on Survivors’ Benefits

• 19.2 (1) The monthly amount payable to a survivor or child under section 25 of the Act, in respect of pensionable service after December 31, 1991 of a deceased contributor described in paragraph 8503(2)(d) of the Income Tax Regulations, in the circumstances described in subparagraphs 8503(2)(d)(i) to (iii) of those Regulations, shall not exceed the maximum amount of survivor retirement benefits that may be paid for each month to the beneficiary of a member, determined under subparagraph 8503(2)(d)(iv) of the those Regulations, as that paragraph and those subparagraphs read on January 15, 1992.

• (2) The aggregate of all monthly amounts payable to survivors and children under section 25 of the Act, in respect of pensionable service after December 31, 1991 of a deceased contributor described in paragraph 8503(2)(d) of the Income Tax Regulations, in the circumstances described in subparagraphs 8503(2)(d)(i) to (iii) of those Regulations, shall not exceed the maximum amount of survivor retirement benefits that may be paid for each month to the beneficiaries of a member, determined under subparagraph 8503(2)(d)(v) of those Regulations, as that paragraph and those subparagraphs read on January 15, 1992.

• (3) Subject to subsection (5), the monthly amount payable to a survivor or child under section 25 of the Act in respect of pensionable service after December 31, 1991 of a deceased contributor described in paragraph 8503(2)(e) of the Income Tax Regulations, in the circumstances described in subparagraphs 8503(2)(e)(i) to (iv) of those Regulations, shall not exceed the maximum amount of survivor retirement benefits that may be paid for each month to a beneficiary of a member, determined under subparagraph 8503(2)(e)(v) of those Regulations, as that paragraph and those subparagraphs read on January 15, 1992.

• (4) The aggregate of all monthly amounts payable to survivors and children under section 25 of the Act in respect of pensionable service after December 31, 1991 of a deceased contributor described in paragraph 8503(2)(e) of the Income Tax Regulations, in the circumstances described in subparagraphs 8503(2)(e)(i) to (iv) of those Regulations, shall not exceed the maximum amount of survivor retirement benefits that may be paid for a month to the beneficiaries of a member, determined under subparagraph 8503(2)(e)(vi) of those Regulations as that paragraph and those subparagraphs read on January 15, 1992.

• (5) The present value of all benefits payable to a survivor under section 25 of the Act in respect of pensionable service after December 31, 1991 of a deceased contributor described in paragraph 8503(2)(f) of the Income Tax Regulations, in the circumstances described in subparagraphs 8503(2)(f)(i) to (iv) of those Regulations, as that paragraph and those subparagraphs read on January 15, 1992, calculated as at the time of the contributor’s death, shall not exceed the present value, as at the time immediately before the contributor’s death, of all benefits that have accrued under that section with respect to the contributor to the day of the contributor’s death.

• (6) The limits set out in subsections (1) to (5) apply to amounts payable with respect to a contributor who dies after the coming into force of an order, made under paragraph 10(a) of the Special Retirement Arrangements Act in respect of a person referred to in subparagraph 10(a)(ii) or (vi) of that Act, providing for the payment of benefits to the survivor or children of the contributor.