On April 16, 2014, the Alberta government introduced two bills making amendments to both its new private-sector and existing public-sector pension legislation. These bills constitute the next steps in ongoing processes to reform pensions in Alberta.

Bill 10, the Employment Pension (Private Sector) Plans Amendment Act, 2014(EPP Amendment Act), makes numerous changes to Alberta's new Employment Pension Plans Act (New Act). As discussed in our prior bulletin ( Alberta's New Pension Legislation – Will You Be Ready?), the New Act was passed in 2012 but is not yet in force, pending the associated regulations being finalized. The EPP Amendment Act makes various wording corrections and clarifications to the New Act but also makes two substantive changes of note:

  • Conversion of Accrued Defined Benefits to Target Benefits – Where a defined benefit (DB) pension plan is to be converted to a target benefit pension plan under the New Act and regulations, the EPP Amendment Act clarifies that the conversion may apply to accrued benefits in the DB plan, subject to rules to be contained in the regulations.
  • Protection from Liability on Annuity Buy-Out – The EPP Amendment Act also permits administrators of DB plans to purchase annuities, in active plans for deferred or retired members or in plans being wound up for retired members. Upon doing so, the EPP Amendment Act confirms that none of the administrators, any participating employers or any other person responsible for making contributions to the plan has any further liability to any person for whom such an annuity has been purchased.

Bill 9, the Public Sector Pension Plans Amendment Act, 2014 (PSPP Amendment Act), brings into legislation plans previously announced by the Alberta government to reform four of the province's public-sector plans. Most notably, the PSPP Amendment Act:

  • Makes changes to the current governance of the plans to enable the government to institute changes to benefits in respect of service after January 1, 2016, including reduction of early retirement subsidies and removing guaranteed cost-of-living increases
  • Introduces the concept of a regulated cap on contributions
  • Sets out the rules under which the sponsors of the plans (to be defined in regulations) may begin the process to transition three of the plans to jointly sponsored plan structures subject to the New Act

Both the EPP Amendment Act and the PSPP Amendment Act have only passed first reading at the time of writing and will not become law until passed in the legislature and proclaimed in force.

Blakes will be following the changes related to both Alberta's private-sector and public-sector pension legislation and will provide further updates as developments occur.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.