Pension Benefits Standards Regulations, 1985
21.1 (1) A member or former member who has elected to receive a variable benefit may decide the amount that they are to receive as a variable benefit for any calendar year.
(2) The variable benefit shall be not less than the minimum amount determined under subsection 8506(5) of the Income Tax Regulations and, for any calendar year before the year in which the former member or their survivor, as the case may be, reaches 90 years of age, not more than the amount determined by the formula
C/F
where
- C
- is the balance in the former member’s account
(a) at the beginning of the calendar year, or
(b) if the balance at the beginning of the calendar year is zero, on the day on which the election was made; and
- F
- is the value, at the beginning of the calendar year, of a pension benefit of which the annual payment is $1, payable on January 1 of each year between the beginning of that calendar year and December 31 of the year in which the member, former member or their survivor, as the case may be, reaches 90 years of age, established using an interest rate that is
(a) for each of the first 15 years, not more than the monthly average yield on Government of Canada marketable bonds of maturity over 10 years, as published by the Bank of Canada, for the month of November before the beginning of the calendar year, and
(b) for any subsequent year, not more than 6%.
(3) For the calendar year in which the former member or their survivor, as the case may be, reaches 90 years of age and for all subsequent calendar years, the amount of the variable benefit shall not exceed the value of the funds held in the fund immediately before the time of the payment.
(4) The minimum amount determined under subsection 8506(5) of the Income Tax Regulations shall be paid as a variable benefit for a calendar year if
(a) the member or former member or their survivor, as the case may be, has not notified the administrator of the amount to be paid as a variable benefit for a calendar year by the beginning of that year, or
(b) the amount determined by the formula set out in subsection (2) for that year is less than that minimum amount.
(5) If, for the calendar year in which the variable benefit is established, part of the account was composed of funds that had been held in a life income fund of the holder earlier in the calendar year in which the variable benefit was established, the amount determined by the formula set out in subsection (2) and the value of the funds referred to in subsection (3) is deemed to be zero in respect of that part of the account for that calendar year.
(6) For the first calendar year that the variable benefit is paid, the amount to be paid shall be multiplied by the number of months remaining in that year and then divided by 12, with any part of an incomplete month counting as one month.
- SOR/2015-60, s. 12
- SOR/2017-145, s. 10(E)
- Date modified: