Amendments to MP Pension Regulations

Summary#

These are final regulations that update rules under the Members of Parliament Retiring Allowances Act to clarify how MP pensions and related payments are administered. The changes mostly tidy up wording, update references, and set specific rules about payments, interest and recoveries; they came into force on August 25, 2020 and were published in the Canada Gazette on September 2, 2020.

What it does#

• Updates definitions and references so the rules follow the earlier pension reform law (Pension Reform Act, S.C. 2012, c. 22) and current tax rules (the defined benefit limit now follows subsection 8500(1) of the Income Tax Regulations).
• Clarifies when employer contributions are credited to the plan accounts: in the calendar month after the contribution is paid.
• Fixes the interest rate used in certain calculations at 4% compounded annually.
• Sets payment timing and proration rules:
  • Monthly pension instalments are paid on the last day of each month.
  • If entitlement starts or stops mid-month (including death), the instalment for that month is prorated by days.
• Gives the Receiver General authority to direct pension payments to a person designated by the Minister if a recipient cannot manage their affairs and has no legal representative.
• Changes how actuarial assumptions are referenced: calculations must use the most recent actuarial valuation report that was laid before Parliament.
• Updates instalment and repayment rules:
  • Members who elect to pay by instalments must finish payments within 20 years.
  • If a lump-sum election is not paid within 30 days, it is treated as an instalment election.
  • If a survivor owes unpaid amounts after a member’s death, recovery can be taken by monthly deductions equal to 10% of the gross monthly allowance, with options to pay sooner or change the plan.
  • The Minister may reduce those deductions if they cause financial hardship, but deductions cannot be less than 5% of the gross monthly allowance or $10, whichever is greater.
• Reworks rules about recovery notices and repayment choices, including a 45-day election period for how to repay overpayments.
• Broadens and clarifies the definition of “child” in relation to full-time attendance at school or training institutions and what proof is required.
• Repeals or replaces several outdated sections and a schedule, and renames the overpayment regulation to Recovery of Overpayments Made to or in Respect of Former Members of Parliament Regulations.
• Comes into force on the day of registration (August 25, 2020).

Who's affected#

• Members of the Members of Parliament Pension Plan: current members, retired members, and their eligible survivors.
• People responsible for administering the plan (administrators in Parliament, Treasury Board officials, and the Receiver General).
• Survivors who may face deductions from pensions to recover amounts owed after a member’s death.
• It is not clear that these changes affect anyone outside the plan (the government says there are no new costs).

Why it matters#

• These are mostly housekeeping changes that make the pension rules clearer and bring regulation text into line with the 2012 pension reforms. That helps administrators apply the rules consistently.
• Practical effects you might notice: timing and proration of first/last monthly payments, a fixed 4% interest rate for some calculations, clearer rules about repayment options and how much can be deducted from survivor pensions (10%, with a hardship minimum of 5% or $10).
• Using the most recent actuarial report for calculations means mortality and instalment assumptions can change as new reports are tabled, which can affect instalment sizes and repayment schedules.
• The changes do not introduce new benefits or new costs according to the government; they mainly affect how existing rules are applied.