Osler made a submission in response to the federal Government's consultation paper "Pension Innovation for Canadians: The Target Benefit Plan".
We provided comments with a view to ensuring that target benefit plans (TBPs) are introduced in a way that puts them on a "level playing field" with other currently available pension options (i.e., traditional defined benefit and defined contribution pension plans), such that artificial barriers are not created which could impede TBP implementation.
In our view, the following are the two biggest disincentives to the adoption and/or sustainability of new TBPs under the current Government proposal:
- Negotiation/consent requirements for the establishment and amendment of TBPs, particularly in a non-union context; and
- Governance requirements related to the functioning and representative make-up of the administrator of TBPs − in particular, the proposed requirement that the Board of Trustees be comprised of members, retirees and other beneficiaries.
As we discuss in our submission, neither requirement is necessary to establishing an equitable and transparent TBP framework.
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.