Regulations Amending the Public Service Superannuation Regulations (Transfer Value): SOR/2024-201
Canada Gazette, Part II, Volume 158, Number 22
Registration
SOR/2024-201 October 11, 2024
PUBLIC SERVICE SUPERANNUATION ACT
P.C. 2024-1105 October 11, 2024
Her Excellency the Governor General in Council, on the recommendation of the President of the Treasury Board, makes the annexed Regulations Amending the Public Service Superannuation Regulations (Transfer Value) under paragraph 42.1(1)(v.4)footnote a of the Public Service Superannuation Act footnote b.
Regulations Amending the Public Service Superannuation Regulations (Transfer Value)
Amendments
1 (1) The definition valuation day in subsection 83(1) of the Public Service Superannuation Regulations footnote 1 is replaced by the following:
- valuation day
- means
- (a) April 30, 1997, if a contributor exercised an option in favour of a transfer value on or after June 20, 1996 and before April 30, 1997; or
- (b) the day on which the transfer value referred to in section 13.01 of the Act is transferred, in any other case. (date d’évaluation)
(2) Subsection 83(2) of the Regulations is repealed.
Coming into Force
2 These Regulations come into force on the day on which they are registered.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Issues
When public service pension plan members with at least two years of pensionable service under the Public Service Superannuation Act end their participation in the plan, but are not immediately entitled to a monthly pension, they must choose between leaving their earned benefits in the plan for a future pension or withdrawing the value of their future pension as an actuarially calculated lump sum. This lump sum amount is known as a “transfer value” (or “commuted value” in the private sector). The amount is calculated at a specific point in time called the “valuation day.” The Public Service Superannuation Regulations (the Regulations) contain two different definitions of “valuation day” because when amendments were made to update this definition in 2016, the prior definition was also inadvertently maintained. While the pre-2016 definition is inoperable because the Regulations no longer contain the necessary supporting provisions, amendments are needed to avoid the appearance that an alternate definition exists from which a different calculation of a transfer value amount could be made.
Background
“Transfer values” were introduced under the Public Service Superannuation Act in 1996 with the necessary operational details in the Regulations that came into force in 1997. At that time, the lump sum was actuarially determined on the later of the date of termination of employment or the date the plan member exercised their option for a transfer value (known as the “valuation day”). Interest was added to the actuarial value from the valuation day to the date of payment. The interest was based on the MERCER Median published by Mercer Investment Consulting Inc. At the end of 2015, Mercer Investment Consulting Inc. stopped making the MERCER Median publicly available without charge. Instead of updating the Regulations with new interest factors, the Regulations were amended on June 23, 2016, to repeal the updating interest provision and to make the valuation day the date the transfer value was paid.
Objective
The objective of the Regulations Amending the Public Service Superannuation Regulations (Transfer Value) [the Amendments] is to improve the clarity of the Regulations by repealing the pre-June 23, 2016, definition of “valuation day.”
Description
The Amendments will repeal the inoperable pre-June 23, 2016, definition of “valuation day” and restructure, but maintain, the definition of “valuation day” that has been in force since 2016.
Regulatory development
Consultation
The Public Service Pension Advisory Committee (the Committee), comprised of employer, employee and retiree representatives, was consulted on the Amendments, and was supportive of pursuing them. The Committee represents the views of active and retired participants in the public service pension plan, their beneficiaries, and the plan’s administrator, Public Services and Procurement Canada (PSPC).
The Amendments were exempt from prepublication in the Canada Gazette, Part I, because they are administrative in nature and internal to the management of the Public Service Pension Plan.
Modern treaty obligations and Indigenous engagement and consultation
The Amendments are not expected to impact rights protected by section 35 of the Constitution Act, 1982, modern treaties or international human rights obligations.
Instrument choice
There is no alternate instrument to address the issue. The matter is explicitly within the purview of the Regulations. As such, no other instruments were considered.
Regulatory analysis
Benefits and costs
There are no costs associated with the Amendments. PSPC, as the day-to-day administrator of the pension plan, will not incur costs because the Amendments only correct a regulatory oversight. No system or procedural changes are required.
The Amendments benefit members of the public service pension plan by clearly defining the term “valuation day.” The date of the actuarial valuation can have a significant impact on the calculated amount due to the economic conditions at that date. The Amendments provide certainty to members of the public service pension plan on the definition of “valuation day” being applied to the valuation of their benefit.
Small business lens
Analysis under the small business lens concluded that the Amendments will not impact Canadian (small) businesses.
One-for-one rule
The one-for-one rule does not apply, as there is no impact on businesses.
Regulatory cooperation and alignment
The Amendments are not related to a commitment under a formal regulatory cooperation forum.
Effects on the environment
In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required. These Amendments do not interact with natural resources or the environment.
Gender-based analysis plus
No gender-based analysis plus (GBA+) impacts have been identified for these Amendments.
Implementation, compliance and enforcement, and service standards
Implementation
The Amendments come into force on the day on which they are registered.
Contact
Karen Favereau
Acting Director
Pension Program Management
Employee Relations and Total Compensation Sector
Treasury Board of Canada Secretariat
Telephone: 343‑598‑1821
Email: Karen.Favereau@tbs-sct.gc.ca