Thank you, Mr. Moses.
Motion 6 - To amend clause 15 to deal with the
powers of the Pension Committee if there are insufficient assets in the plan.
As originally drafted, clause 15 of Bill 12 authorizes the Pension Committee, at any time, to retroactively reduce accrued ancillary benefits and to reduce core pension benefits on a going-forward basis.
In the event that there are insufficient assets to maintain the solvency of the NEBS plan, Bill 12 also requires that the Pension Committee request the consent of the NEBS Board to increase contributions to the pension fund before taking any actions to change or reduce benefits.
This section of the bill, as originally written, also gives the board the power to veto any proposed increase to the rate of contributions by employer members.
The standing committee listened carefully to the concerns raised by many of the presenters who viewed these authorities as placing an undue
burden on employee beneficiaries to pay for the costs of an underfunded pension. This was seen to be especially problematic given the lack of employee representation on the pension committee.
As a result, the standing committee proposed amendments replacing clause 15 with a new clause that removes the ability of the pension committee to retroactively reduce any earned benefit as a way of dealing with insufficient assets in the plan.
There is one exception to this general prohibition against the retroactive reduction of accrued benefits: • This exception occurs only in the specific case
of the accrual of cost of living indexing benefits accrued after December 31, 2004, where an employer withdraws from the plan or the plan is terminated.
• If there are insufficient assets, and the employer
has withdrawn or the plan has been terminated, then indexing benefits earned after December 31, 2004, are not guaranteed but are, instead, discretionary.
• This exception is in keeping with the current
plan text, in which plan members only accrue a right to receive indexing benefits if the plan is not wound up or an employer has not withdrawn.
In addition to the prohibition against the retroactive reduction of accrued benefits, the amended provision gives the Pension Committee the authority to increase contribution rates as one of the ways of addressing an insufficiency of assets in the plan.
As well, this motion removes the clause giving the board a veto power over contribution increases. As a result, the authority for managing pension fund solvency will rest with the Pension Committee.
This motion also has the effect of ensuring that the NEBS Pension Plan remains a defined-benefit plan. For greater certainty, this is enshrined through the proposal in Motion 1 to include the term “defined- benefit” in clause 2 of the bill which outlines the purpose of the act.
Motion 7 -
To amend clause 22(3) to refine Minister’s ability to direct class of employer to apply for membership.
The purpose of this motion is to bring the language of this provision in Bill 12 in line with the language used in Nunavut’s Bill 1, so that the bills mirror each other as closely as possible.
This has the effect of making the wording of this clause more precise. It removes the ability of the Minister to direct either an Aboriginal government or the legislative or judicial branches of the territorial
government to apply for membership in the NEBS plan.
Motion 8 - To amend clause 25 to set forth what an
actuarial funding report must contain in the event of a funding deficiency – options.
This is a technical amendment designed to go with the amendment to clause 15, Motion 6. This motion eliminates the option of proposing, in an actuarial report, a retroactive reduction of benefits in the event of a funding shortfall.
Motion 9 - To add a subsection to clause 25 to
require tabling in the Legislative Assembly of the actuarial valuation reports.
This motion would require the Minister to table in the Legislative Assembly an actuarial valuation report within 120 days of receipt, or, if the Assembly is not sitting, at the first available opportunity when it next sits.
Motion 10 - To add a subsection to clause 27 to
require tabling of the Pension Committee’s financial reports.
This motion requires the Minister to table in the Assembly the Pension Committee’s financial report within 120 days of receipt, or, if the Assembly is not sitting, at the first available opportunity when it next sits.
As with Motion 9, the purpose of this motion is simply to ensure, through legislation, that this information is made available to the public. Motions 9 and 10 were favoured by the Legislative Assembly of Nunavut’s Standing Committee on Legislation and were added to Bill 12, with the concurrence of this standing committee and the GNWT’s Minister of Finance to ensure symmetry with Nunavut’s Bill 1.
Motion 11 - To amend clause 28(4) to provide that
amendments to reduce benefits do not come into force until 60 days after notice is given to affected members.
Under the heading “Disclosure to Members,” Bill 12 contains a clause requiring that 60 days’ advance notice be provided to any pension beneficiary adversely affected by any decision of the Pension Committee to retroactively reduce accrued ancillary benefits.
With the amendment to clause 15, Motion 6, removing the authority to retroactively reduce accrued ancillary pension benefits, such a period of advance notice is no longer necessary.
Nonetheless, the standing committee feels that any reductions to ancillary and/or core benefits planned by the Pension Committee on a going-forward basis warrant 60 days’ advance notice to affected plan members. This amendment ensures that such notice is provided.
Motion 12 - To amend clause 57(3) to provide that
when the Minister cannot give 30 days’ advance notice of a decision under 57(2), being a decision to terminate the plan, the Minister must give notice as soon as possible.
As with Motion 7, the intent of this motion is to mirror the equivalent provision of the Nunavut legislation.
This amendment has the effect of ensuring, where the plan is being wound up, that whatever notice is possible is being given.
Mr. Speaker, now I turn the report over to the chair, Mr. Nadli.