As the Christmas holiday season approaches, there has been a
barrage of recent developments on the Canadian pension law
First, on December 8, Ontario's Bill 120 received
royal assent. Bill 120 is the second phase of Ontario's Pension Benefits Act
reform, dealing with such issues as plan expenses, contribution
holidays, surplus withdrawals, and target benefits. The bill as
finally adopted contains several changes from the version
originally introduced in October, most notably with regard to the
surplus withdrawal rules. However, the government refused to budge
on some other much-criticized provisions of the original Bill 120,
such as certain requirements for the payment of administrative
expenses out of plan assets.
Second, on December 10, Quebec's Bill 129 was adopted.
Bill 129 tweaks a number of provisions in Quebec's Supplemental Pension Plans
Act. One Bill 129 highlight
is an extension of the 2009 introduction of retirees' right to
transfer their pension assets out of their pension plan to the
Quebec pension regulator, the Régie des rentes du
Québec. The initial, 2009 version of that right applied
only to pension plans of bankrupt employers. Bill 129 now
extends the right to pension plans of employers under CCAA
protection, e.g. Nortel.
Third, on December 14, the federal government introduced draft regulations which
flesh out the details of some of its own pension reform measures
enacted earlier this year. These regulations address such points as
the use of letters of credit to secure solvency liabilities, the
full funding of deficits on plan termination, and the innovative
"distressed plan workout scheme" for underfunded pension
plans of financially-troubled plan sponsors.
The courts have been busy in the pension arena recently, too.
Most notably, on December 10, the Quebec Superior Court released
its decision in the latest
chapter of the long-running Multi-Marques saga concerning
employer liability in multi-employer pension plans. Those who have
been following this saga may recall that in 2008, the Quebec Court
of Appeal found in favour of the participating employer, holding
that it could withdraw from a multi-employer plan without having to
fund up past service benefits that the plan trustees had granted
without employer consent. The Quebec government subsequently
adopted legislation prohibiting employers from so doing, and the
Régie des rentes then purported to apply this new
legislation to the Multi-Marques situation itself notwithstanding
the Court of Appeal decision. On December 10, the Superior Court
quite sensibly quashed that aggressive regulatory initiative.
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