Retirement Compensation Arrangements Regulations, No. 1 — 38.4
38.4 (1) Subject to subsection (2), if an amount is paid to an eligible employer in respect of a participant pursuant to subsection 40.2(3) of the Public Service Superannuation Act , the Minister shall transfer to an external retirement compensation arrangement established by that employer the lesser of (a) an amount equal to the aggregate of (i) an amount calculated by the Minister equal to the actuarial value of the participant’s benefits accrued under this Division and section 68 as of valuation date based on the paid-up contributions of the participant under this Division, using the same actuarial assumptions and determined in the same manner as set out in the agreement referred to in subsection 40.2(2) of that Act with the employer, except that the rate of interest shall be one-half the rate of interest used in calculating an amount under clause 40.2(3)(a)(i)(A) of that Act, and (ii) an amount representing interest after valuation date, if any, on the amount determined under subparagraph (i) calculated at the same rate and in the same manner as in the agreement with the employer, and (b) an amount calculated by the employer as being the amount required to provide benefits under its external retirement compensation arrangement with regard to the accrued benefits of the participant under this Division and section 68. (2) If the eligible employer has not established an external retirement compensation arrangement or has established an external retirement compensation arrangement but is not prepared to provide benefits under that arrangement in respect of the amount referred to in subsection (1), the Minister shall not transfer the amount to that employer, but shall pay to the participant (a) in the case of a participant who on valuation date has two or more years of pensionable service to his or her credit under the Public Service Superannuation Act , a lump sum amount calculated in accordance with section 38.5; and (b) in any other case, a lump sum amount equal to the sum of the contributions that the participant has made under this Division plus interest, if any, calculated at the rate and in the manner set out in subsection 10(9) of that Act. (3) If the amount transferred under subsection (1) is less than the lump sum amount that would be paid to the participant under subsection (2), the Minister shall pay to the participant an amount equal to the difference. (4) If a division of a participant’s pension benefits is effected under section 8 of the Pension Benefits Division Act before the date on which the transfer or payment is effected, the amount transferred or paid shall be reduced to take into account the adjustment to the participant’s pension benefits made in accordance with section 21 of the Pension Benefits Division Regulations . (5) The transfer or payment of an amount under this section shall be made within the time limit for the payment of an amount to an eligible employer provided for in the agreement with that employer or within 12 months after the coming into force of this subsection, whichever is the later. (6) When all amounts under this section have been transferred or paid, as applicable, the participant shall cease to be entitled to any benefit under this Division or under section 68 in respect of the period of service to which the transfer or payment relates. (7) For the purposes of this section and section 38.5, valuation date has the same meaning as in the agreement with the eligible employer. SOR/2003-230, s. 8