PENSION PLAN FOR MUNICIPAL EMPLOYEES

1. This Regulation applies to by-laws that provide for pensions for employees or any class thereof and that were passed by municipalities and local boards under a predecessor of paragraph 46 of section 207 of the Municipal Act, as that paragraph read on December 31, 2002 and approved by the Ministry before the 18th day of April, 1962. R.R.O. 1990, Reg. 813, s. 1; O. Reg. 402/02, s. 1. 2. A pension shall be limited to an annuity payable in periodic instalments at least as long as the employee lives and commencing on the retirement date of the employee or, in the case of an employee who is retired on account of sickness or disability, commencing within thirty-one days after the date the employee retires, and shall be provided out of payments by the municipality or local board and deductions from the salary, wages or other remuneration of the employee and the interest thereon. R.R.O. 1990, Reg. 813, s. 2. 3. (1) Pension plans shall be, (a) by contract with the Crown in accordance with the Government Annuities Act (Canada); (b) by contract with an insurer licensed under the Insurance Act; (c) funded by agreement with a trustee being a trust corporation incorporated under the laws of Canada or any province thereof and registered under the Loan and Trust Corporations Act; or (d) by a combination of any of the methods referred to in clauses (a), (b) and (c). R.R.O. 1990, Reg. 813, s. 3 (1). (2) A pension plan under clause (1) (c) or a combination of methods that include clause (c) shall, in the written opinion of a qualified actuary, be actuarially sound. R.R.O. 1990, Reg. 813, s. 3 (2). 4. (1) Every employee who is employed when the pension plan comes into effect shall be given the right to elect to join the plan, (a) if the employee is then eligible, within a stipulated time after the plan comes into effect; or (b) if the employee is not then eligible, within a stipulated time after he or she becomes eligible, but, if the employee does not elect to join the plan within the time stipulated, he or she shall not be entitled to any contributory payment by the municipality or local board under clause 7 (a). R.R.O. 1990, Reg. 813, s. 4 (1). (2) Subject to subsection (1), every employee who is eligible, other than an employee who enters the employment after he or she has reached normal retirement age, shall be required to participate in the pension plan and to continue to participate during his or her employment. R.R.O. 1990, Reg. 813, s. 4 (2). 5. Every pension plan shall require that to be eligible an employee shall be a permanent employee. R.R.O. 1990, Reg. 813, s. 5. Payments 6. (1) Each employee participating in the pension plan, (a) shall be required to contribute regular payments; and (b) may make larger payments than the minimum required by the plan. R.R.O. 1990, Reg. 813, s. 6 (1). (2) Payments shall be calculated as a percentage of the employee’s salary or wage. R.R.O. 1990, Reg. 813, s. 6 (2). (3) The percentage referred to in subsection (2) shall be the same for all employees under the plan. R.R.O. 1990, Reg. 813, s. 6 (3). (4) All payments shall be made through the municipality or local board. R.R.O. 1990, Reg. 813, s. 6 (4). 7. Contributing payments to a pension plan by a municipality or local board shall not exceed, (a) an amount that will purchase an annuity of $25 for each completed year of an employee’s service prior to the commencement date of the plan, excluding any years of service prior to forty years before the normal retirement age of a male employee and thirty-five years before the normal retirement age of a female employee and including any years absent from his or her employment while in the service of His Majesty’s Forces; and (b) the amount paid by the employee under clause 6 (1) (a) in respect of service after the commencement date of the pension plan. R.R.O. 1990, Reg. 813, s. 7. 8. The administrative costs and expenses of a pension plan under clause 3 (1) (c) or, where the pension plan is a combination of methods that include clause (c), the administrative costs and expenses of the part thereof that is under clause (c) shall be paid out of the money contributed to the plan. R.R.O. 1990, Reg. 813, s. 8. Cash Withdrawals 9. Where the employment of an employee by a municipality or local board is terminated before a pension becomes payable to the employee under a pension plan and the employee receives a refund of his or her contributions to the pension plan, the employee shall not be entitled to receive the contributions made by the municipality or local board in respect of the employee, except where the plan so provides and the employment is terminated because he or she is permanently unemployable due to mental or physical disability as established by medical evidence satisfactory to the municipality or local board. R.R.O. 1990, Reg. 813, s. 9. 10. Where the employment of an employee by a municipality or local board is terminated before a pension becomes payable to him or her, the employee shall be entitled to the pension benefits payable to him or her under the plan in respect of the contributions made by, and with respect to, the employee except where, (a) all or part of the contributions made by the employee to a pension plan are refunded to the employee in which case the refund shall be in full settlement of the rights of the employee in respect of the period of service for which the contributions so refunded were made; or (b) the contributions have been transferred in accordance with subsection 117 (5) of the Municipal Act, as that subsection read on December 31, 2002. R.R.O. 1990, Reg. 813, s. 10; O. Reg. 402/02, s. 2. 11. (1) Where a person dies before his or her annuity payments commence, the person’s beneficiary named under the plan or, if none is named, the person’s estate is entitled to payment in full of the person’s payments to the pension plan together with the payments made by the municipality or local board on his or her behalf, with interest. R.R.O. 1990, Reg. 813, s. 11 (1). (2) Where a person dies after his or her annuity payments commence, the person’s beneficiary named under the plan or, if none is named, the person’s estate is entitled to payment of the amount or amounts required by the terms of the plan to be payable. R.R.O. 1990, Reg. 813, s. 11 (2). 12. Where a pension plan provides that an employee may remain in the service of the municipality or local board after attaining normal retirement age, the pension plan shall provide that, (a) the employee’s service shall be for a period of one year renewable by the municipality or local board for further periods of one year each; (b) the pension shall not commence until the employee’s actual retirement; and (c) the employee may elect that his or her payments and the contributing payments by the municipality or local board shall cease, or that his or her payments and the contributing payments shall continue to be made until the employee’s service terminates or until the amount at the credit of the employee will provide an annual pension not in excess of 60 per cent of the employee’s average annual salary for the preceding three years of his or her service. R.R.O. 1990, Reg. 813, s. 12. Vesting 13. Except as provided in subsection 117 (5) of the Municipal Act, as that subsection read on December 31, 2002, no pension plan shall provide for assignment, transfer or commutation of any benefits under the plan. R.R.O. 1990, Reg. 813, s. 13; O. Reg. 402/02, s. 3. 14. Subject to sections 9 and 13, all payments of the municipality or local board and an employee, together with interest on the sum of both, vest in the employee when paid or earned. R.R.O. 1990, Reg. 813, s. 14. Agreement With a Trustee 15. Where a pension plan is provided by agreement with a trustee, the agreement shall provide, (a) that the trustee may be removed from office on being given sixty days written notice with or without cause by action of the municipality or local board that appointed the trustee, which action shall be evidenced by a by-law of the municipality or a resolution of the local board, certified to the trustee over the signature of the clerk of the municipality under the Corporate Seal or over the signature of the secretary of the local board and delivered to the trustee; (b) that the trustee may resign at any time by giving sixty days written notice of his or her resignation to the clerk of the municipality or the secretary of the local board; and (c) that the class of securities in which the trustee may invest the trust money shall not include bonds, debentures or other evidence of indebtedness issued or guaranteed by the municipality or local board that appointed the trustee, except when invested in pooled or commingled trust funds. R.R.O. 1990, Reg. 813, s. 15.