New
Zealand residents holding Canadian occupational pensions continue to be
penalised by the way Canada has structured management of its pension
scheme. Canadian pension payments are
forfeited to the New Zealand government for those receiving national
superannuation in New Zealand.
In a further test case, a member of the
Canadian Pension Plan, now living in New Zealand has failed to stop the New
Zealand government seizing his Canadian pension.
CPP in Canada is an occupational pension similar
to the New Zealand Kiwisaver system, but with some important differences: CPP
contributions are compulsory for all employees (while Kiwisaver is voluntary)
and CPP contributions are paid into a central fund managed by a
government-appointed board (while Kiwisaver funds are managed by the private
sector and are not government guaranteed).
National superannuation in New Zealand is
paid to all reaching entitlement age regardless of income or wealth. Rules are imposed to prevent
double-dipping. Any person receiving
national super in New Zealand, who is also entitled to a state pension from
another country, must surrender that other country’s pension as a condition of
getting national super. The Social
Security Act defines an overseas state pension not by how the overseas pension
is funded but by how it is administered.
CPP pensions are funded by employees and employers but the pension fund
is administered by the Canadian government.
The New Zealand courts have consistently ruled that this means CPP is to
be treated as a state pension which must be surrendered.
In a further test case, it was argued administration
of CPP in Canada is not run by the state, it is handled by an independent board
(albeit a board appointed by the state) which acts on behalf of pension holders
generally. Justice Edwards ruled this
does not change the fact that payment of benefits is managed by the Canadian
government.
Latimer
v. Ministry of Social Development – High Court (10.11.15)
16.003