In response to recent pension legislation reform, the Manitoba
Office of the Superintendent – Pension Commission has
issued a policy providing guidance to Manitoba plan administrators
wishing to convert a defined benefit (DB) plan to a defined
contribution (DC) plan.
Interestingly though, unlike the FSCO Policy, the Manitoba
Policy Bulletin does not require an administrator to give all
members the option of preserving their accrued defined benefits.
Rather, the Manitoba Policy Bulletin provides that only those plan
members who are eligible for early retirement "must" be
given the option of receiving a pension (by way of annuity) equal
to their accrued defined benefits under the plan. The plan
administrator, at its discretion, may decide whether this option
will be made available to all plan members.
The Manitoba Policy Bulletin, however, goes on to suggest that
plan administrators have members sign a form indicating "that
the changes are understood and accepted". Since members are
not entitled to decline the conversion, however, it may be that
some members may not be willing to sign a form indicating that they
"accept" the change. More useful would be an
acknowledgement by members that they understand the change, and
understand their obligations under the DC plan going forward.
James Fera advises on legal issues relating to
federally and provincially regulated pension and employee benefit
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