Canada Gazette, Part I, Volume 150, Number 10: Regulations Amending the Department of Employment and Social Development Regulations

March 5, 2016

Statutory authority

Department of Employment and Social Development Act

Sponsoring department

Department of Employment and Social Development

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

The current consent form-based exchange of information between the Department of Public Works and Government Services (PWGSC) and the Department of Employment and Social Development (ESDC) is done on a quarterly basis. The current consent-based process is cumbersome, slow and has resulted in overpayments.

Background

Currently, information is exchanged based on consent forms completed at the time of application for a superannuation pension with PWGSC. Pension plan members provide their consent for PWGSC to exchange their personal information with ESDC upon retirement by completing a “Pension Information Release” form when they are applying for superannuation. While consent provides authority for disclosure, it is inefficient, for PWGSC must provide a copy of the signed consent form for each beneficiary to ESDC. In addition, retirees bear the burden and costs associated with the printing and mailing of the consent forms.

A consent-based electronic data exchange process between PWGSC and ESDC, specific to the Canada Pension Plan (CPP), has been in place since 2006, and a manual data exchange process has been in place for at least 10 years before that. This exchange identifies individuals in receipt of the Public Service Superannuation Act (PSSA) or the Canadian Forces Superannuation Act (CFSA) pension benefits who are also receiving a CPP disability pension. The Royal Canadian Mounted Police Superannuation Act (RCMPSA) pension benefits were administered by a private contracted company until July 2014, at which point the plan began being administered by PWGSC; hence, it was not initially included in the PWGSC data exchange process described above.

Because the information match is undertaken quarterly, the onus is on the retirees to remember that it is their responsibility to advise their superannuation plan administrator when and if they become CPP disability pension beneficiaries. The CPP disability benefit is a taxable monthly payment that is available to people who have contributed to the CPP and who are not able to work regularly at any job because of a disability. To qualify for a CPP disability benefit, individuals must have a severe and prolonged disability, be under the age of 65 and have made sufficient CPP contributions.

Superannuation pension plans include provisions that require a reduction of the annuity if the retiree is also in receipt of a CPP disability pension. These individuals may forget to inform PWGSC of their CPP disability pension, or may not be in a condition to remember to do so. This can result in overpayments of superannuation benefits, requiring PWGSC to then recover the monies from the pensioner. The retirees receiving a disability pension often find it hard to reimburse these overpayments. In addition, should the retiree refuse to sign the consent form, or if it is not received on time, he or she is automatically assumed to be receiving a CPP disability pension and their retirement pension is reduced accordingly. Each year, on the basis of the data exchanged, PWGSC discovers an average of 700 pension accounts with disability-related overpayments totalling approximately $2.9 million.

A significant number of overpayments are also a result of PWGSC not being notified of deaths. PWGSC frequently learns about the death of a superannuation beneficiary (the retiree or his/her survivors) many months after the fact and solely relies on notification of death by the family and/or estate. Conversely, the CPP program is often one of the first to be contacted in the event of death, as the CPP provides for a death benefit and survivor benefits. In addition, ESDC has numerous information exchanges that provide for notification of death and are used to maintain the integrity of the income security programs and the Social Insurance Registry. However, ESDC does not currently share death notifications with PWGSC.

Often, when a superannuation beneficiary dies, a family member may not immediately notify PWGSC to discontinue superannuation payments, which results in overpayments. Between 2004 and September 2013, PWGSC identified 1 563 PSSA cases as overpaid due to a delayed notification of death, and these overpayments totaled $16.3 million. These overpayments would then be recovered from the estate. The process to recover the money is not easy and there are situations, where there is no estate for example, when there is often an inability to collect the amounts owing. The overpayments negatively impact the Public Service pension plans, which are funded via deductions from employees' pay and from an employer share, since many are never recovered and must be covered through employee and employer contributions.

Objectives

The objective of this amendment is to ensure a more timely information exchange, to simplify and expedite this process, and to avoid overpayments, by relying on section 35 of the Department of Employment and Social Development Act (DESD Act) and supporting the Information Sharing Agreement (ISA).

Description

It is proposed to amend section 3.1 of the Department of Employment and Social Development Regulations (DESD Regulations) to include PWGSC as a prescribed federal institution to which information that is obtained, or prepared from information that is obtained, under the CPP may be made available for the administration or enforcement of the public service pension plans relating to the PSSA, the CFSA and the RCMPSA (together hereinafter referred to as superannuation legislation). This superannuation legislation applies to employees of the main federal public service, certain Crown corporations, members of the Canadian Forces, and employees of the Royal Canadian Mounted Police.

Once the DESD Regulations are amended and the authority for the information exchange is provided, ESDC can then enter into an ISA with PWGSC, pursuant to subsection 35(1) of the DESD Act.

“One-for-One” Rule

The “One-for-One” Rule does not apply to this proposal, as there is no change in administrative costs to business.

Small business lens

The small business lens does not apply to this proposal, as there are no costs on small business.

Consultation

PWGSC has been working closely with ESDC to improve the sharing of information, and PWGSC has confirmed its support for the proposed amendments. Following publication in the Canada Gazette, Part I, ESDC intends to consult the Office of the Privacy Commissioner, with respect to a privacy impact assessment (PIA) of the proposed ISA, which is currently under development. Other stakeholders have an opportunity to provide comments during the 30 day public comment period following publication in the Canada Gazette, Part I.

Rationale

An ISA between ESDC and PWGSC to simplify and streamline the exchange of information will be signed and shall take effect on the date the regulatory amendment comes into force. The need for a paper-based form providing client consent will be eliminated, and an ISA between the departments will set the information sharing parameters that will include ensuring privacy requirements are met (i.e. sharing only minimal information required by PWGSC to administer their program, such as social insurance number, name, and CPP disability pension start and end date). This will result in increased efficiency in the calculation of superannuation amounts for PWGSC. As well, the administrative burden associated with the consent forms will be eliminated. In 2013, the volume of forms totalled 12 000 for the PSSA, 1 350 for the RCMPSA, and 3 400 for the CFSA.

ESDC seeks to make business processes more efficient and effective, ensuring Canadian taxpayers receive maximum value for the use of public funds. Accordingly, business practices are to be adopted that offer the most economical service possible by streamlining or eliminating cumbersome, slow and unnecessary paper-based processes, by collaborating with partners and by adopting alternative approaches that are both more user-friendly and efficient. With monthly exchanges of pertinent data, the information will be timelier, increasing the efficiency through improved and automated processes.

A PIA and ISA are being developed. The PIA is a process that demonstrates the federal government's commitment to protect the privacy of individuals by promoting transparency and accountability in personal information management. ESDC is undertaking a PIA to verify that only information required for the administration of the superannuation programs is disclosed to PWGSC, and that safeguards are in place so that the information is only used for its intended purpose and is securely retained and destroyed.

Implementation, enforcement and service standards

The Regulations Amending the Department of Employment and Social Development Regulations will take effect upon registration.

Contact

Marianna Giordano
Director
CPP Policy and Legislation
Seniors and Pensions Policy Secretariat
Employment and Social Development Canada
140 Promenade du Portage, Phase IV, 8th Floor
Gatineau, Quebec
K1A 0J9
Telephone: 819-654-1672
Fax: 819-953-9298
Email: marianna.giordano@hrsdc-rhdcc.gc.ca

PROPOSED REGULATORY TEXT

Notice is given that the Governor in Council, pursuant to paragraph 43(b) (see footnote a) of the Department of Employment and Social Development Act (see footnote b), proposes to make the annexed Regulations Amending the Department of Employment and Social Development Regulations.

Interested persons may make representations with respect to the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice and be addressed to Marianna Giordano, Director, CPP Policy and Legislation, Seniors and Pensions Policy Secretariat, Income Security and Social Development Branch, Employment and Social Development Canada, 140 promenade du Portage, 8th Floor, Gatineau, Quebec K1A 0J9 (tel.: 819-654-1672; fax: 819-953-9298; e-mail: marianna.giordano@hrsdc-rhdcc.gc.ca).

Ottawa, February 25, 2016

Jurica Čapkun
Assistant Clerk of the Privy Council

Regulations Amending the Department of Employment and Social Development Regulations

Amendment

1 Section 3.1 of the Department of Employment and Social Development Regulations (see footnote 1) is amended by striking out “and” at the end of paragraph (e), by adding “and” at the end of paragraph (f) and by adding the following after paragraph (f):

Coming into Force

2 These Regulations come into force on the day on which they are registered.

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