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There have been many legislative and regulatory changes across Canada for pension plan administrators in 2021. While we have discussed certain notable updates in various Blakes insights...
There have been many legislative and regulatory changes across
Canada for pension plan administrators in 2021. While we have
discussed certain notable updates in
various Blakes insights as they have arisen over the last
several months, this infographic provides a high-level summary of
the key changes across the country. We will continue to update
this infographic as further legislative and regulatory changes
develop.
This infographic is current as of October 11, 2021.
Please use the table of contents below to skip to your desired
section.
On June 10, 2021, regulations amending the Income Tax
Regulations to
extend relief to Registered Pension Plans and Deferred
Salary Leave Plans came into force.
CAPSA released a revised Guideline No.
7, which is intended to provide guidance on the development and
adoption of funding policies for plans that provide defined
benefits or target benefits,
Canada Revenue Agency (CRA)
Newsletter no. 94-3R1, guidelines on the assumptions that are
acceptable to the Canada Revenue Agency when computing the present
value of benefits in connection with a DB provision of a registered
pension plan.
Newsletter 21-1, Additional Conditions Applicable to Individual
Pension Plans and Designated Plans.2
On July 29, 2021, Regulation 909 under the
Ontario Pension Benefits Act was
amended to require administrators of plans with pension
benefit guarantee fund liabilities of C$10-million or more to
include additional information in actuarial valuation reports filed
on or after September 1, 2021.4
NEW - On October 7, 2021,
proposed amendments to Ontario Regulation 909 of
the Pension Benefits Act were released. The
proposed amendments include removing the requirement for
administrators of member-directed defined contribution (DC) pension
plans to establish a statement of investment policies and
procedures and for administrators of DC plans to file audited
financial statements.
The B.C. Financial Services Regulatory Authority has published
the following Pension Bulletins:
PENS 21-001, assist administrators of plans with a DB component
who wish to use a line of credit to meet the component's
solvency deficiency
PENS 21-002 on the registration of plan amendments under
the Pension Benefits Standards Act and
the Pension Benefits Standards Regulation
PENS 21-003, application of the transfer of commuted values
provision under the Pension Benefits Standards
Act and Pension Benefits Standards
Regulation for pension plans with a DB component
Quebec
Revised
instructions on actuarial assumptions and methods for
determining the value of pension plan commitments on a going
concern basis.
Retraite Québec published the
RCR-020 form to register a target-benefit plan.
NEW - On September 22, 2021,
the
draft regulation to amend the Regulation
respecting supplemental pension plans was published in
the Gazette officielle du Québec. The proposed
amendments to the regulation address a number of issues applicable
to target benefit, defined benefit, defined contribution and
negotiated contribution pension plans. Any person wishing to
comment on the draft regulation must submit written comments by
November 6, 2021, to the address indicated on the notice of
publication of the draft regulation.
Alberta
EPPA Update 21-02: Alberta Employment Pensions upgraded its
online filing site to allow for the payment of annual filing fees
and penalties. Payments by cheque will still be accepted.
Saskatchewan
The Saskatchewan Financial and Consumer Affairs Authority
(FCAA) began a
Public Consultation with regards to establishing a new
unlocking rule for new and existing locked-in retirement account
contracts.
The FCAA released a
Consultation Paper regarding the pension funding framework
for single employer defined benefit plans in the private sector and
other complementary reform measures applicable to all defined
benefit plans. Comments were due June 11, 2021.
On October 1, 2021, Bill 8,
The Pension Benefits Amendment Act, except certain
provisions primarily addressing solvency reserve accounts, will
come into force. Bill 8 amends Manitoba's The Pension
Benefits Act to, among other things:
Allow a pension plan to permit a member that continues to be
employed after reaching the normal retirement age to stop
contributing to the plan and accruing benefits
Clarify how ancillary benefits are to be determined
Allow a person who transfers their pension benefit credit to a
locked-in retirement account or life income fund to unlock all or
part of the amount, subject to certain conditions
Allow the use of solvency reserve accounts by an employer to
fund a solvency deficiency (to come into force at a later
date)
Establish a new category of specified multi-employer plans
Allow rules to address a vacancy on a pension committee
involving an inactive plan member
Allow greater flexibility in dividing pension assets after a
relationship breakdown
Newfoundland & Labrador Pension Benefits
Act
amended to allow a person who had previously transferred
his or her pension benefit to a class or type of retirement savings
arrangement approved by the Newfoundland & Labrador
Superintendent of Pensions to withdraw from the retirement savings
arrangement an amount not exceeding a prescribed amount where:
The person is experiencing a circumstance of financial hardship
and satisfies the prescribed requirements, or
The person has resided outside Canada for at least two
consecutive calendar years and satisfies the prescribed
requirements
Corresponding regulations also came into force (see Regulation
4/21)
Updated Pension Directives
No.4,
No.5,
No. 17, and added No.
18 all with an effective date of March 1,
2021 5
Nova Scotia
Bill 87 received royal assent. It removed the Nova Scotia
Superintendent of Pensions' responsibility with respect to
financial hardship applications to commute or surrender retirement
savings arrangements and provided the Governor in Council with the
authority to make regulations regarding such applications.
The Governor in Council
amended the Nova Scotia Pension Benefits
Regulations to create authority for financial
institutions to approve the withdrawal of money in a registered
retirement savings arrangement.
The Nova Scotia Finance and Treasury Board issued a news
release, which details the amendments to the Nova
Scotia Pension Benefits Act, and how the changes will
streamline the process for Nova Scotians to access locked-in
retirement accounts or life income funds.
1 On April 19, 2021, the Federal Government tabled its
2021 Budget, which included a number of provisions related to
pensions including: fixing contributions errors in defined
contribution pension plans, revisions to the federal unclaimed
assets regime, revisions to the framework for negotiated
contribution pension plans and changes to the taxes applicable to
registered investments.
2 On March 15, 2021, the Canada Revenue Agency released
guidelines outlining conditions that they are applying to
individual pension plans (IPPs), designated plans and similar
registered pension plans under the authority of subsection 147.1(5)
of the Income Tax Act (Canada) (ITA). These conditions concern plan
designs that use a money purchase provision to avoid certain
conditions under the ITA and Regulations that limit employer
contributions to a defined benefit provision of an IPP or
designated plan.
3 On March 24, 2021, the Ontario 2021 Budget (Budget) was
released. The Budget indicated that a review of the Pension
Benefits Guarantee Fund (PBGF) found that there is a need for data
to better estimate the PBGF's exposure to future claims and the
appropriate level of funding by employer sponsors. To address this,
the Budget indicated that Ontario would be amending Regulation 909
under the Ontario Pension Benefits Act (PBA) to require pension
plan administrators to calculate and report their plan's PBGF
claim exposure. Regulation 909 was subsequently amended on July 29,
2021, as discussed in footnote 4.
4 On July 29, 2021, Regulation 909 under the PBA was
amended to require administrators of plans with PBGF liabilities of
C$10-million or more to report (i) data related to the plan's
PBGF claim exposure, and (ii) information regarding the
distribution of its pension benefits. The new information must be
included in routine actuarial valuation reports filed on or after
September 1, 2021.
5 The Newfoundland & Labrador Superintendent of
Pensions issued updated Pension Directives for Locked-In Retirement
Account Requirements, Life Income Fund Requirements and Locked-in
Retirement Income Fund Requirements, as well as a new Pension
Directive on Acknowledging Potential Impacts of Unlocking due to
Financial Hardship. These Pension Directives are effective March 1,
2021.
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