Designation of Beneficiaries Under Benefit Plans Act

c t DESIGNATION OF BENEFICIARIES UNDER BENEFIT PLANS ACT PLEASE NOTE This document, prepared by the Legislative Counsel Office, is an office consolidation of this Act, current to May 13, 2021. It is intended for information and reference purposes only. This document is not the official version of the Act. The Act and the amendments as printed under the authority of the King’s Printer for the province should be consulted to determine the authoritative statement of the law. For more information concerning the history of this Act, please see the Table of Public Acts on the Prince Edward Island Government web site (www.princeedwardisland.ca). If you find any errors or omissions in this consolidation, please contact: Legislative Counsel Office Tel: (902) 368-4292 Email: legislation@gov.pe.ca Designation of Beneficiaries Under Benefit Plans Act Section 1 c DESIGNATION OF BENEFICIARIES UNDER BENEFIT PLANS ACT CHAPTER D-9 1. Definitions In this Act (a) “designation” means a written instrument referred to in section 2; (b) “investment corporation” means an investment corporation as defined in the Income Tax Act (Canada); (c) “participant” means a person who is entitled to designate another person to receive a benefit payable under a plan on the participant’s death; (d) “plan” means (i) a pension, retirement, welfare or profit-sharing fund, trust, scheme, contract or arrangement or a fund, trust, scheme, contract or arrangement for other benefits for employees, former employees, directors, former directors, agents, or former agents of an employer or their dependants or beneficiaries, (ii) a fund, trust, scheme, contract, or arrangement for the payment of a periodic sum for life or for a fixed or variable term, or (iii) a fund, trust, scheme, contract or arrangement of a class that is prescribed as a plan for the purposes of this Act, and includes a tax-free savings account, retirement savings plan, home ownership savings plan and a retirement income fund as defined in the Income Tax Act (Canada); (e) “trust company” means a trust company that is authorized by law to carry on business in the province; (f) “will” means a will as defined in the Probate Act R.S.P.E.I. 1988, Cap. P-21, but does not include a designation made in accordance with clause 2(1)(a) of this Act. R.S.P.E.I. 1974, Cap. D-8, s.1; 1981,c.11,s.1; 1987,c.17,s.1; 2008,c.38,s.1; 2021,c.6,s.1. 2. Designation of beneficiary under a plan (1) A participant may designate a person to receive a benefit payable under a plan, in accordance with the terms of the plan, on the participant’s death (a) by an instrument signed by the participant or by another person on the participant’s behalf, at the participant’s direction and in the participant’s presence; or (b) by will. Application of Electronic Commerce Act (2) The Electronic Commerce Act R.S.P.E.I. 1988, Cap. E-4.1, applies to a designation referred to in clause (1)(a). c t Current to: May 13, 2021 Page 3 Section 3 Designation of Beneficiaries Under Benefit Plans Act Beneficiary may enforce payment (3) After the death of a participant who has made a designation that is in effect at the time of the participant’s death, the beneficiary may enforce payment of the benefit payable under the plan to the beneficiary. Effect of payment of benefit (4) The person administering a plan is discharged on paying the benefit to the person designated under the latest designation made in accordance with the terms of the plan unless the person administering the plan has notice of a subsequent designation or revocation of the designation. R.S.P.E.I. 1974, Cap.D-8,s.2; 1981,c.11, s.2; 1987,c.17,s.2; 2008,c.38,s.2; 2021,c.6,s.2. 3. Setting up defence Where a person designated under section 2 seeks to enforce payment of the benefit payable under the plan, the person administering the plan may set up any defence that the person could have set up against the participant or the participant’s personal representative. 1974(2nd), c.68, s.3; 1981, c.11, s.3; 2008,c.38,s.3; 2021,c.6,s.3. 4. Revocation of designation A participant may alter or revoke a designation made under a plan; but, subject to section 7, any such alteration or revocation may be made only in the manner set forth in the plan. R.S.P.E.I. 1974, Cap. D-8, s.4. 5. Designation in will Where a designation is contained in a will, the designation, notwithstanding section 76 of the Probate Act R.S.P.E.I. 1988, Cap. P-21 has effect from the time of its execution. R.S.P.E.I. 1974, Cap. D-8, s.5; 1975, c.83, s.3. 6. Designation in instrument purporting to be a will A designation contained in an instrument purporting to be a will is not invalid by reason only of the fact that the instrument is invalid as a testamentary instrument; and it may be revoked or altered by any subsequent designation. R.S.P.E.I. 1974, Cap. D-8, s.6. 7. Revocation of designation in will Where a designation is contained in a will, and subsequently the will is revoked by operation of law or otherwise, the designation is thereby revoked. R.S.P.E.I. 1974, Cap. D-8, s.7. 8. Application of Act This Act does not apply to a designation of a beneficiary to which the Insurance Act R.S.P.E.I. 1988, Cap. I-4 applies. R.S.P.E.I. 1974, Cap. D-8, s.8. 9. Plan money not part of estate and free from creditors Where a beneficiary is designated, any benefit payable to the beneficiary is not, from the time of the happening of the event upon which it becomes payable, part of the estate of the participant, and is not subject to the claims of the creditors of the participant. 1992, c.16, s.1. Page 4 Current to: May 13, 2021 t c Designation of Beneficiaries Under Benefit Plans Act Section 10 10. Plan exempt from execution (1) Where a designation in favour of a spouse, child, grandchild or parent of a participant is in effect, the assets of the plan and the rights and interests of the participant in them and in the plan are exempt from execution or seizure. Application (2) Subsection (1) does not apply to (a) a tax-free savings account; or (b) any other plan that is prescribed as being exempt from the application of subsection (1). 1992,c.16,s.1; 2008,c.38,s.4; 2021,c.6,s.4. 11. Regulations The Lieutenant Governor in Council may make regulations (a) prescribing classes of funds, trusts, schemes, contracts or arrangements as plans for the purposes of subclause 1(d)(iii); and (b) exempting plans prescribed under clause (a) from the application of subsection 10(1). 2008,c.38,s.5 c t Current to: May 13, 2021 Page 5