Law:Government Annuities Improvement Act

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S.c. 1974-75-76, c. 83

Assented to 1975-12-20

An Act to increase the rate of return on Government Annuity contracts, to increase their flexibility and to discontinue future sales thereof

Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:


Contents

Short Title

Short title

1. This Act may be cited as the Government Annuities Improvement Act.


Interpretation

“Minister”

2. (1) In this Act, “Minister” means such member of the Queen’s Privy Council for Canada as is designated by the Governor in Council to administer the Government Annuities Act.

Words and expressions

(2) Unless the context otherwise indicates, words and expressions have the same meaning as in the Government Annuities Act.


Increased Rate Of Return

Increased interest for deferred annuities

3. (1) In determining the value of an annuity prior to the date on which it becomes payable, the rate or rates of interest to be used shall, for the period before April 1st, 1975, be the rate or rates of interest applicable to that annuity contract and, for the period commencing April 1st, 1975, shall, subject to subsection (2), be seven per cent per annum.

Governor in Council may vary interest rate

(2) The Governor in Council may by regulation vary, in respect of any annuity or category of annuities, the seven per cent rate of interest mentioned in subsection (1), but the rate of interest fixed by regulation may not, in respect of any annuity, be lower than the rate or rates of interest applicable to that annuity prior to April 1st, 1975.

Calculation of amount of annuity

4. At the date on which an annuity becomes payable, if that date is on or after April 1st, 1975, the amount of annuity payable shall be calculated by using the value of that annuity determined in accordance with section 3 and the table or tables of values prescribed under paragraph 13(b) of the Government Annuities Act applicable to that annuity contract.

Annuity payments to be increased

5. (1) All amounts payable by way of an annuity on or after April 1st, 1975 shall be increased by the applicable percentage or percentages shown in the schedule.

Amendment of schedule

(2) The Governor in Council may, by regulation, amend the schedule in respect of any annuity or category of annuities.

Maximum annuity max exceed $1,200 per year

6. (1) Notwithstanding subsection 8(1) of the Government Annuities Act, the total amount payable by way of an annuity or annuities to any annuitant or to joint annuitants may exceed twelve hundred dollars a year to the extent that such excess results from the application of section 3 or 5 or both.

Regulations may permit further increase in maximum

(2) The Governor in Council may make regulations for permitting the total amount payable by way of annuity or annuities to any annuitant or to joint annuitants to exceed the maximum permitted by subsection (1).


Increased Flexibility

Variation and substitution

7. The Minister may, upon such terms and conditions as are prescribed by regulation,

(a) vary an existing annuity contract with the consent of the purchaser; or

(b) substitute a new annuity contract for an existing one where there is a change of purchaser.

When purchaser dies or goes out of existence

8. Where an annuity contract under the Government Annuities Act does not permit the annuitant to request changes in his annuity without the purchaser’s consent and the purchaser has died or gone out of existence, the annuitant has the same right to request changes in his annuity as had the purchaser.

Commutation available in certain cases

9. When, under an annuity contract under the Government Annuities Act, the annuity is payable for a term of years certain or for the life of the annuitant, whichever period is the longer, and the annuitant has died before the expiration of that term of years certain, then, notwithstanding subsection 12(2) of the Government Annuities Act, the remaining instalments may, at the request of the purchaser or his legal representative, be commuted into a lump sum payment, the amount of which shall be calculated in accordance with the regulations.


General

Interest to date of repayment in certain cases

10. The interest referred to in subsection 12(1) of the Government Annuities Act shall accrue to the date of repayment in cases where the relevant death occurs after the commencement of this Act, even if the annuity contract stipulates that the interest will accrue only to the date of death.

Rate of interest in certain cases

11. Notwithstanding the provisions of The Appropriation Act No. 4, 1950, Vote 695, and of Appropriation Act No. 6, 1960, Vote 526, the interest mentioned in those Votes shall, after March 31st, 1975, accrue at a rate determined from time to time by the Governor in Council.

Transferability of benefits

12. Notwithstanding subsection 10(1) the Government Annuities Act, where an annuity contract is a registered retirement savings plan within the meaning of the Income Tax Act or is under a registered pension fund or plan within the meaning of the Income Tax Act, any monies payable under that contract may, at the request of the annuitant or, if the annuitant is dead, at the request of the beneficiary, be paid to another registered retirement savings plan within the meaning of the Income Tax Act or to another registered pension fund or plan within the meaning of the Income Tax Act.


Discontinuance Of Sales Of Annuities

No new contracts

13. After the commencement of this Act, no further annuity contracts may be entered into under the Government Annuities Act, except as provided by the terms of an existing annuity contract under that Act or by paragraph 7(b) of this Act.

Registration deadline under group contracts

14. No further registration of employees under annuity contracts mentioned in subsection 6(3) of the Government Annuities Act may take place after March 31st, 1979.


Government Annuities Account

Calculation of liability

15. (1) Notwithstanding anything in section 15 of the Government Annuities Act, the liability outstanding at the end of each fiscal year in respect of annuity contracts shall be calculated on the basis of such rate or rates of interest and mortality tables, and in such manner, as is prescribed by regulation.

Credits to Account

(2) If at the end of any fiscal year the liability calculated under subsection (1) exceeds the balance of the Government Annuities Account, there shall be credited to the Account and charged to the Consolidated Revenue Fund an amount equal to the excess of the liability over the balance of the Account.

Charges to Account

(3) If at the end of any fiscal year the liability calculated under subsection (1) is less than the balance of the Government Annuities Account, there shall be charged to the Account and credited to the Consolidated Revenue Fund an amount equal to the amount by which the balance of the Account exceeds the liability.


Audit

Audit

16. The accounts and financial transactions arising under the Government Annuities Act and this Act shall be audited annually by the Auditor General and a report of the audit shall be made to the Minister.


Regulations

Regulations

17. The Governor in Council may make regulations

(a) prescribing terms and conditions for the purposes of section 7;

(b) respecting the manner in which a grant of letters probate, or similar document, of any court or authority outside Canada is to be proved for the purposes of the Government Annuities Act;

(c) prescribing the manner in which lump sum payments mentioned in section 9 are to be calculated; and

(d) prescribing the manner in which the liability outstanding at the end of each fiscal year in respect of annuity contracts is to be calculated, and the rate or rates of interest and mortality tables to be used in that regard.


Report To Parliament

Annual report to Parliament

18. (1) Within nine months after the end of each fiscal year, the Minister shall prepare a report on all business done under the Government Annuities Act and this Act during that fiscal year and shall lay the report before Parliament within fifteen days after it bas been prepared or, if Parliament is not then sitting, within the first fifteen days next thereafter that Parliament is sitting.

Repeal

(2) Section 16 of the Government Annuities Act is repealed.

Schedule


5 1/4%10%
Rate or rates of interest applicable to the annuity contract Percentage increase
3% 32%
3 1/2% 29%
4% 22%
5% 14%

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