Report on the Administration of the Supplementary Retirement Benefits Act for the Fiscal Year Ended March 31, 2014

Table of Contents

• Introduction
• Year at a Glance, 2013–14
• Historical Context
• Supplementary Retirement Benefits Account
• Membership Statistics
• Funding
• Account Transactions
• Statistical Tables

Introduction

The Supplementary Retirement Benefits Act (SRBA, or the Act) applies primarily to pension benefits payable to federal judges under the Judges Act, as well as to other statutes listed in Schedule I of the Act, such as the Diplomatic Service (Special) Superannuation Act, the Lieutenant Governors Superannuation Act, the Defence Services Pension Continuation Act of the Canadian Armed Forces and the Royal Canadian Mounted Police Pension Continuation Act. The Act does not apply to pension benefits payable under the major federal public sector pension plans governed by the Public Service Superannuation Act (PSSA), the Canadian Forces Superannuation Act (CFSA), the Royal Canadian Mounted Police Superannuation Act (RCMPSA) and the Members of Parliament Retiring Allowances Act (MPRAA).

Year at a Glance, 2013–14

• Active contributors increased by 4.1 per cent to 1,141 members (1,096 members in 2013).
• Retired members and survivors decreased by 3 per cent to 1,534 members (1,582 members
  in 2013).
• The pension benefits were increased (i.e., indexed) by 0.9 per cent in January 2014 (1.9 per cent in January 2013).

Historical Context

The SRBA makes it possible to provide supplementary benefits for recipients of pensions or allowances payable under the acts or regulations listed in Schedule I of the Act, as at March 31, 2014.

The original Supplementary Retirement Benefits Act of 1970 provided for increases in pensions of a maximum of 2 per cent per year. The indexing of benefits was extended to employees who retired since 1952. The increases were payable at the age of 60, or earlier under specific conditions. The original Act also applied to pensions payable under the PSSA, the CFSA, the RCMPSA and the MPRAA.

Effective January 1, 1974, the 2-per-cent ceiling on increases was removed, and an annual increase in pensions reflecting the full increase in the cost of living was permitted. The annual increase in pensions is payable starting in January of each year. This increase is based on the percentage increase in the average of the Consumer Price Index (CPI) for the 12 months ended on the preceding September 30 over the CPI average for the 12 months ended a year earlier.

The Act was amended in 1975 to permit interest to be paid on returns of contributions at a rate of 4 per cent, compounded annually.

Since 1982, the legislation has required that the increase payable in the first year after a person retires be pro-rated according to the number of complete months of retirement in the previous year.

In 1983 and 1984, the increases were limited to 6.5 per cent and 5.5 per cent, respectively, under amendments to the Act passed in 1983.

In 1992, the Act was amended because changes were being made to the PSSA, the CFSA, the RCMPSA and the MPRAA. These statutes were amended to incorporate the authority to provide increases in their respective pensions as if they were determined under the SRBA. Consequently, the Act no longer applies to pension benefits payable under those statutes. Amendments to the Act regarding benefits payable under the PSSA, the CFSA and the RCMPSA were made retroactive to April 1, 1991. Amendments regarding the MPRAA became effective on January 1, 1992. For more information on these amendments, see the section “Supplementary Retirement Benefits Account.”

Supplementary Retirement Benefits Account

The SRBA establishes an account known as the Supplementary Retirement Benefits Account (the Account) in the Public Accounts of Canada. Plan members who have not yet retired, except the Governor General, contribute to the Account. The government matches these contributions.

Before January 1, 1974, all supplementary benefits were charged to the Account. Since that date, however, the benefits paid to former contributors have been charged to the Account only until they equal the total amount credited to the Account. Supplementary benefits paid in excess of that total are charged to the Consolidated Revenue Fund.

Under the 1992 amendments mentioned in the preceding section, the appropriate portions of the Account were transferred to the superannuation accounts established under the PSSA, the CFSA, the RCMPSA and the MPRAA. These transfers greatly reduced the size of the Account.

Membership Statistics

At March 31, 2014, there were 1,141 members (1,096 members in 2013) contributing to the Account and 1,534 retired members and survivors (1,582 members in 2013).

Figure 1 demonstrates the number of contributors relative to the number of pensioners from 2005 to 2014.

Figure 1 - Text version

	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014
Contributors	1,066	1,065	1,097	1,088	1,089	1,113	1,141	1,136	1,096	1,141
Pensioners	1,814	1,970	1,880	1,809	1,750	1,739	1,642	1,625	1,582	1,534

Note: Deceased plan members are excluded from the number of pensioners indicated in Figure 1 for 2014.

Funding

Between April 1, 1970, and December 31, 1976, members contributed 0.5 per cent of their salary. Effective January 1, 1977, this rate was increased to 1 per cent.

Interest on the Account is payable at the end of each quarter. It is calculated monthly on the minimum balance in the Account at an interest rate that represents the yield on outstanding Government of Canada bonds having a term to maturity of five years, less one eighth of 1 per cent.

Account Transactions

During fiscal year 2013–14, total receipts from contributors and the government, including interest, amounted to $9.84 million ($8.81 million in 2013). The total amount paid under the SRBA was $32.02 million ($32.85 million in 2013), of which $31,275 ($28,957 in 2013) was charged to the Account; the remaining $31.99 million ($32.82 million in 2013) was charged to the Consolidated Revenue Fund in accordance with subsection 8(2) of the Act. The balance in the Account at the end of the year was $197.29 million ($187.48 million in 2013).

Details of the transactions in the Account during the fiscal year appear in Table 1 and Table 2.

Statistical Tables