PUBLIC SECTOR PENSION PLANS ACT

[SBC 1999] CHAPTER 44

[Updated to November 2, 1999] Assented to July 15, 1999

Contents

Part 1 – Introductory Provisions

Section 1 – Definitions and interpretation

1 (1) In this Act:

"college board" means the College Pension Board of Trustees established under Schedule A;

"college plan" means the College Pension Plan continued under Schedule A;

"investment management board" means the board of directors of the investment management corporation;

"investment management corporation" means the British Columbia Investment Management Corporation established under section 16;

"municipal board" means the Municipal Pension Board established under Schedule B;

"municipal plan" means the Municipal Pension Plan continued under Schedule B;

"pension board" means the college board, municipal board, public service board or teachers board, or all of them as the context requires;

"pension corporation" means the British Columbia Pension Corporation established under section 5;

"pension fund" means the money and securities of the college plan, municipal plan, public service plan or teachers plan, or all of them as the context requires;

"pension management board" means the board of directors of the pension corporation;

"pension plan" means the college plan, municipal plan, public service plan or teachers plan, or all of them as the context requires;

"plan member" means a person who

(a) is making contributions to the pension fund,

(b) has previously made contributions to the pension fund, which contributions were left on deposit, and is not receiving benefits from the pension fund, or

(c) has previously made contributions to the pension fund and is receiving benefits from the pension fund;

"public service board" means the Public Service Pension Advisory Board established under Schedule C;

"public service plan" means the Public Service Pension Plan continued under Schedule C;

"teachers board" means the Teachers Pension Board established under Schedule D;

"teachers plan" means the Teachers Pension Plan continued under Schedule D.

(2) [Not in force.]

Section 2-3 – Not in force

2 and 3 [Not in force.]

Part 2 – British Columbia Pension Corporation

Section 4-14 – Not in force

4 to 14 [Not in force.]

Part 3 – British Columbia
Investment Management Corporation

Section 15 – Definitions

15 In this Part:

"chief investment officer" means the person appointed under section 20 (1) (a) as chief investment officer of the investment management corporation;

"funds" means money and securities placed with the investment management corporation under the authority of section 18 (3);

"other clients" means persons, other than the pension boards, with authority under section 18 (3) to make investments.

Section 16 – British Columbia Investment Management Corporation established

16 (1) A corporation, to be known as the British Columbia Investment Management Corporation, is established and incorporated as a trust company authorized to carry on trust business and investment management services as provided in this Part.

(2) The corporation referred to in subsection (1) consists of the investment management board appointed under section 19 (1) or (3).

(3) The investment management corporation has the power and capacity of a natural person of full capacity.

(4) The fiscal year end of the investment management corporation is March 31.

(5) The investment management corporation is an agent of the government.

(6) The investment management corporation, as an agent of the government, is not liable for taxation except as the government is liable for taxation.

(7) The Company Act, the Company Clauses Act and, despite section 11 of the Financial Institutions Act, the Financial Institutions Act do not apply to the investment management corporation, but the Lieutenant Governor in Council may direct that certain provisions of the Company Act and the Financial Institutions Act apply to the investment management corporation.

(8) For the purposes of the Securities Act and its regulations, the investment management corporation must be treated in the same manner as the government is treated under that Act and its regulations.

Section 17 – Capital of the investment management corporation

17 (1) The capital of the investment management corporation is one share with a par value of $10.

(2) The share in the investment management corporation must be issued to and registered in the name of the Minister of Finance and Corporate Relations and must be held by that minister on behalf of the government.

Section 18 – Powers, functions and duties of the investment management corporation

18 (1) In this section, "designated institution", "government body", "public money", "special fund" and "trust fund" have the same meaning as in the Financial Administration Act.

(2) The purpose of the investment management corporation is to provide funds management services, including the making of investments and loans, for funds placed with the investment management corporation.

(3) Despite any other enactment, including the Financial Administration Act, a person who has the authority to invest

(a) money or securities of a trust fund, special fund or other fund,

(b) money or securities of a government body or designated institution, or

(c) other public money or securities

may, with the agreement of the investment management board, place the money or securities with the investment management corporation as agent of the person, for investment.

(4) In addition to the powers, functions and duties of the investment management corporation as provided in this Part, the investment management corporation has the same powers, functions and duties in the provision of funds management services for funds placed with it under subsection (3) as the Minister of Finance and Corporate Relations would have if the funds had been placed with that minister under Part 5 of the Financial Administration Act as it read on April 1, 1999.

(5) The investment management corporation may provide additional services to a pension plan if the investment management board and the pension board agree on the budget required for the additional services.

Section 19 – Investment management board

19 (1) The first investment management board must have 7 directors as follows:

(a) one director appointed, on the recommendation of the College Pension Advisory Board continued under the Pension (College) Act, by the trustee of the College Pension Fund from among the members of the College Pension Advisory Board;

(b) one director appointed, on the recommendation of the Municipal Pension Board continued under the Pension (Municipal) Act, by the trustee of the Municipal Pension Fund from among the members of the Municipal Pension Board;

(c) one director appointed, on the recommendation of the Public Service Pension Advisory Board continued under the Pension (Public Service) Act, by the chair of the Public Service Pension Advisory Board from among the members of the Public Service Pension Advisory Board;

(d) one director appointed, on the recommendation of the Teachers Pension Board continued under the Pension (Teachers) Act, by the trustee of the Teachers Pension Fund from among the members of the Teachers Pension Board;

(e) 2 directors, representative of clients of the investment management corporation, other than those referred to in paragraphs (a) to (d), appointed by the Minister of Finance and Corporate Relations;

(f) one director who is the Deputy Minister of Finance and Corporate Relations.

(2) Subsection (1) and this subsection are repealed on the coming into force of subsection (3).

(3) [Not in force.]

(4) The Deputy Minister of Finance and Corporate Relations is designated as chair of the investment management board.

(5) Each director appointed under subsection (1) or (3) has one vote on the board.

(6) An appointment to the investment management board under subsection (3) (a) to (e) must be made

(a) for a term not exceeding 3 years, and

(b) so that no more than 3 appointments expire in any calendar year.

(7) An appointment under subsection (3) (a) to (e) may be renewed.

(8) Despite subsection (1) (a) to (e) or (3) (a) to (e), an appointment to the investment management board may be rescinded by the party that made the appointment.

(9) If a director ceases for any reason to be a director of the investment management board before the end of the term for which he or she was appointed,

(a) the board must provide notice of the vacancy to the party that appointed that director, and

(b) that party must promptly appoint, in accordance with subsection (1) or (3), a replacement director for the remainder of the term of that director.

(10) Subject to subsection (11), a quorum of the investment management board consists of all of the directors of the board, and all decisions of the board must be unanimous.

(11) The investment management board may, by the unanimous agreement of the board, change a requirement of subsection (10).

(12) No act or proceeding of the investment management board is invalid merely because there are in office fewer than the number of directors required under this section.

(13) The investment management board may pay

(a) to a director or a person appointed to a committee of the board an allowance for reasonable travel and other expenses necessarily incurred in carrying out the business of the board,

(b) to a director or a person appointed to a committee of the board, if the director or person is not receiving remuneration from any other source for acting as a director or on a committee, remuneration that has been set by the board and is consistent with Treasury Board guidelines, and

(c) to an organization, if the organization is the source of remuneration paid to a director or person appointed to a committee of the board, remuneration for the services of the director or person at the rate set by the board under paragraph (b).

Section 20 – Powers, functions and duties of the investment management board

20 (1) The investment management board must do all of the following:

(a) select and appoint a chief investment officer to hold office during pleasure, and determine the salary to be paid to the chief investment officer;

(b) review and monitor the performance of the chief investment officer;

(c) select and appoint for the investment management corporation an auditor who is qualified to be an auditor of a reporting company under the Company Act;

(d) approve, in whole or in part and with or without modifications,

(i) policies respecting the proper discharge of the investment management corporation’s mandate,

(ii) a business plan for the investment management corporation,

(iii) the investment management corporation’s budget, including the budget for capital expenditures and staffing,

(iv) policies respecting pooled funds, and

(v) conflict of interest guidelines;

(e) establish an employee classification system and compensation scale, including performance bonuses;

(f) oversee the operations of the investment management corporation;

(g) act in the best interests of the investment management corporation.

(2) The investment management board must, through the investment management corporation and to the extent possible under the budget approved for the investment management corporation, do all of the following:

(a) provide proper reporting and accountability, in a timely manner, to the pension boards and the trustees and other persons responsible for the funds managed by the investment management corporation;

(b) comply with recognized industry standards;

(c) provide investment management services in an efficient, effective and timely manner;

(d) have in place an equitable fee system based on the user pay principle;

(e) provide for its own financial administration by

(i) establishing an accounting system which ensures that there is proper reporting and accountability, in a timely manner, to the clients of the investment management corporation,

(ii) permitting the Minister of Finance and Corporate Relations to direct the Comptroller General to examine the financial and accounting operations of the investment management corporation and report back to the investment management board, Treasury Board, the pension boards and other persons responsible for the funds managed by the investment management corporation,

(iii) having annual financial statements of the investment management corporation prepared in accordance with generally accepted accounting principles,

(iv) having an audit performed annually on the financial statements referred to in subparagraph (iii), and

(v) providing to the Minister of Finance and Corporate Relations an annual business plan and an annual report on the investment management corporation, including the audited financial statements.

(3) The investment management board may do any of the following:

(a) delegate to the chief investment officer the exercise or performance of any power or duty conferred or imposed on the board under subsection (2);

(b) pass resolutions it considers necessary or advisable to manage and conduct the affairs of the investment management corporation and to exercise the board’s powers and perform its duties;

(c) establish committees of the board, and may determine the composition, duties, responsibilities, limitations and operating procedures of those committees;

(d) appoint persons other than directors of the board to a committee referred to in paragraph (c), and may set the term of appointment that applies to those committee members.

(4) The chief investment officer appointed under the authority of subsection (1) (a) is the chief executive officer of the investment management corporation.

(5) The investment management board must not be involved in the investment decisions of the investment management corporation.

Section 21 – Responsibilities of the chief investment officer

21 (1) The chief investment officer is responsible for carrying out the day to day duties related to the management of the funds.

(2) The chief investment officer must report

(a) to the investment management board with respect to the operations of the investment management corporation, and

(b) to the trustees or other persons responsible for the funds, and to the other clients of the investment management corporation, with respect to the management and investment performance of the funds that they have placed with the investment management corporation.

(3) The chief investment officer must do all of the following:

(a) hire and dismiss the officers and employees necessary to carry on the business and operations of the investment management corporation;

(b) supervise the day to day operations of the investment management corporation, including a determination of which assets to buy and sell;

(c) prepare a business plan and budget for approval by the investment management board;

(d) attend at meetings of the investment management board and receive a copy of all information provided to the board;

(e) establish policies and procedures to meet the operational objectives of the investment management corporation and the funds;

(f) develop a business continuation plan;

(g) keep all the records, books and accounts of the investment management corporation, and provide other accounting services as required by the trustees or other persons responsible for the funds and by the other clients of the investment management corporation;

(h) ensure that risk and returns are managed in a prudent and appropriate fashion, given the nature of the funds, and in accordance with any instructions provided by the trustees or other persons responsible for the funds;

(i) hire and dismiss the investment management corporation’s external suppliers, including custodians and external fund managers;

(j) recommend changes in investment strategies and policies to clients of the investment management corporation;

(k) file documentation with the appropriate authorities and perform other regulatory duties as may be required under the Securities Act and other enactments;

(l) address any other matter arising out of the management of the investment management corporation that is necessary to properly carry out the provisions of this Part;

(m) exercise or perform any power or duty delegated to the chief investment officer by the investment management board under section 20 (3) (a).

(4) Subsection (3) (d) does not apply to the chief investment officer respecting matters referred to in section 20 (1) (a) and (b) or respecting matters in which there would be a conflict of interest.

(5) In exercising the powers or performing his or her duties, the chief investment officer may enter into agreements in the name of the investment management corporation.

(6) Agreements entered into by the chief investment officer are binding on the investment management corporation and those funds on behalf of which the chief investment officer is acting.

Section 22 – Officers and employees of the investment management corporation

22 (1) The Public Service Act and the Public Service Labour Relations Act do not apply to the investment management corporation or the officers and employees of the investment management corporation.

(2) The Pension (Public Service) Act and the Public Service Benefit Plan Act apply to the investment management corporation and to the officers and employees of the investment management corporation.

(3) If, immediately before appointment to or employment with the investment management corporation, an officer or employee has been confirmed in his or her employment under the Public Service Act, the officer or employee must not suffer a reduction in salary by reason only of his or her appointment or employment, and any monetary benefits that he or she would have enjoyed as a public service officer or employee continue to apply to him or her, subject to the terms of employment determined by the investment management corporation.

(4) An officer or employee referred to in subsection (3) who is appointed to or employed by the investment management corporation retains his or her length of service seniority acquired in the public service for determining his or her length of service seniority in the investment management corporation.

Section 23 – Chief investment officer’s power to delegate

23 The chief investment officer may, on terms and conditions the chief investment officer considers advisable, delegate to any person or class of persons any of the chief investment officer’s powers, functions or duties.

Section 24 – Operating costs and capital expenditures of the investment management corporation

24 (1) The investment management corporation must recover its operating costs and capital expenditures from one or more of the following:

(a) amounts charged to the funds for operating costs and capital expenditures necessarily incurred by the investment management corporation on behalf of the funds it manages;

(b) amounts charged to persons, organizations and other clients for services provided by the investment management corporation;

(c) income accruing from investments made by the investment management corporation on its own behalf.

(2) to (4) [Not in force.]

(5) Capital expenditures of the investment management corporation may be paid from amounts borrowed by the investment management corporation.

Section 25 – Indemnification

25 (1) Despite section 75 of the Financial Administration Act, the investment management corporation may indemnify a person who is a director of the investment management board, an officer or employee of the investment management corporation or a person appointed to a committee of the board under section 20 (3) (d), or a former director, officer, employee or committee member, against all costs, charges and expenses actually and reasonably incurred by the person, including an amount paid to settle an action or satisfy a judgment in a civil, criminal or administrative action or proceeding to which the person is made a party because of being or having been a director, officer, employee or committee member, and including an action brought by the investment management corporation, if

(a) the director, officer, employee or committee member acted in good faith, and

(b) in the case of a criminal action or proceeding, the director, officer, employee or committee member had reasonable grounds for believing that his or her conduct was lawful.

(2) The investment management board may purchase and maintain, for the benefit of the investment management corporation or a director, officer, employee or committee member referred to in subsection (1), or any of them, insurance against liability incurred by the investment management corporation or by the director, officer, employee or committee member.

Part 4 – Regulations and Transitional

Division 1 – Regulations

Section 26 – Regulations

26 (1) The Lieutenant Governor in Council may make regulations referred to in section 41 of the Interpretation Act.

(2) Without limiting subsection (1), the Lieutenant Governor in Council may make regulations referred to in Part 5 of the Financial Administration Act with the necessary changes so that they apply to the investment management corporation under this Act.

(3) A regulation made under Part 5 of the Financial Administration Act applies, with the necessary changes and so far as it is applicable, to the investment management corporation as if made under this Act.

Division 2 – Transitional

Section 27-28 – Not in force

27 and 28 [Not in force.]

Section 29 – Transitional – regulations

29 (1) The Lieutenant Governor in Council may make regulations respecting any matters necessary or advisable for more effectively bringing into operation the provisions of Parts 2 and 3 of this Act and for obviating any transitional difficulties encountered.

(2) Unless earlier repealed, a regulation made under this section is repealed one year after it is enacted.

Schedules A to D

[Not in force.]

Consequential Amendments, Amendments to this Act,
Validation and Repeals

[Note: See Table of Legislative Changes for the status of these provisions.]

Section 30-124 – Consequential Amendments, Amendments to this Act, Validation and Repeals

Section 125 – Commencement

125 This Act comes into force by regulation of the Lieutenant Governor in Council.