|National Pensions and Benefits Law Section - New Legal Developments
New Developments - Western Canada
- British Columbia: Revised Pension Standards Legislation Introduced
On April 30, 2012, Bill 38, the Pension Benefits Standards Act (“Bill 38”), received first reading in the B.C. Legislative Assembly. Like the Nova Scotia Legislature, the B.C. Legislative Assembly has opted to introduce an entirely new pension statute to repeal and replace its existing pension legislation, the Pension Benefits Standards Act, 1996. A copy of Bill 38 (first reading) is available here: http://www.leg.bc.ca/39th4th/1st_read/gov38-1.htm.
Among other things, Bill 38 would introduce immediate vesting, greater rights to information for retired members, enhanced regulatory powers, and rules governing “jointly sponsored plans” and “target benefit plans”. The Ministry of Finance has published a corresponding press release summarizing a number of Bill 38’s proposals. A copy is available here: http://www.newsroom.gov.bc.ca/2012/04/government-encouraging-wider-private-sector-pension-coverage.html.
- British Columbia: Waterman v. IBM Canada Limited
On April 5, 2012, the Supreme Court of Canada granted IBM Canada leave to appeal from the B.C. Court of Appeal’s 2011 decision in the above-named action. The B.C. Court of Appeal had decided that, on the facts before it, IBM Canada was not entitled to deduct pension payments from an employee’s wrongful dismissal award when the employee had, at termination, otherwise attained normal retirement age under a defined benefit pension plan.
A link to the Supreme Court’s decision granting leave is here: http://canlii.ca/t/fqw9q.
A link to the B.C. Court of Appeal’s 2011 decision is here: http://canlii.ca/t/fmhvn.
- Alberta: Revised Policy on Pension Plan Membership
In October 2011, the Government of Alberta—Finance revised Policy Bulletin #7 to provide that a pension plan can be closed to new members by defining a class of members by reference to a specific date, and to clarify that a retiree under a defined benefit provision may return to work, continue to receive a pension, and also earn defined contribution benefits if the plan allows it.
- Saskatchewan: Financial Services Commission
On April 18, 2012, the Saskatchewan Financial Services Commission published a short bulletin warning against pension unlocking scams. The text of the bulletin is here: http://goo.gl/HgIbF.
- Manitoba: Pension Benefits Regulation
The Regulation was amended effective January 1, 2012 to permit an employer contributing to a defined benefit plan (other than an employer contributing to a multi-unit pension plan) to secure some or all of a plan’s solvency special payments through a letter of credit that meets certain prescribed requirements.
In conjunction with the amendment, the Manitoba Pension Commission published Policy Bulletin #10 outlining the requirements and its expectations with respect to funding through letters of credit. Policy Bulletin #10 is available here: http://www.gov.mb.ca/labour/pension/pdf/bulletin10.pdf.
- Manitoba: Special Payments Relief Regulation, 2011
The Special Payments Relief Regulation, 2011 (the “SPRR”) became effective January 1, 2012. The SPRR permits certain existing solvency deficiencies under a defined benefit pension plan to be consolidated and amortized over a 10 year period, conditional on the funding payments being up to date and the approval of a requisite threshold of (a) active and deferred members; and (b) retirees and other beneficiaries. No more than one-third of either class may object in order to be eligible for the relief. The SPRR applies to the consolidated deficiency reported in the first valuation report between December 30, 2011 and January 2, 2014.
For more information, consult the SPRR, available here: http://web2.gov.mb.ca/laws/regs/pdf/p032-213.11.pdf, or the Manitoba Pension Commission’s Update #11-08, available here: http://www.gov.mb.ca/labour/pension/pdf/update11_08.pdf.
New Developments – Central Canada
- Ontario: Draft regulatory amendments to the Pension Benefits Act
On April 30, 2012, the Ontario government released for consultation draft regulatory amendments to the Pension Benefits Act. The draft amendments relate to retired members, immediate vesting, surplus provisions and other changes. In addition, an outline of the regulations relating to changes to the grow-in rules was posted and on May 3, 2012, draft regulations relating to grow-in were released. Comments on these draft regulatory amendments may be submitted to the Ministry of Finance no later than June 1, 2012.
For more information and a copy of the draft regulations, visit: http://www.ontariocanada.com/registry/view.do?postingId=9102&language=en and http://www.ontariocanada.com/registry/showAttachment.do?postingId=9122&attachmentId=13573.
- Ontario: Amendments relating to temporary funding relief for public sector plans
On February 16 2012, the Ontario Government filed Ontario Regulation 12/12 amending Ontario Regulation 178/11 under the Pension Benefits Act. The amendments relate to the date of filing a stage one valuation report. The amendments also revise the list of public sector plans receiving stage one solvency funding relief, as specified in Schedule 1 of Ontario Regulation 178/11.
To access the full text of amending Ontario Regulation 12/12, visit: http://www.ontario.ca/ontprodconsume/groups/content/@onca/@so/@gazette/documents/document/ont06_027184.pdf
To access the full text of updated Ontario Regulation 178/11, visit: http://www.e-laws.gov.on.ca/html/regs/english/elaws_regs_110178_e.htm
- Ontario: Ontario Government introduces Bill 55: Strong Action for Ontario Act (Budget Measures), 2012
On March 27, 2012 the Ontario Government introduced Bill 55, Strong Action for Ontario Act (Budget Measures). Schedules 21, 50, 51 and 53 of the Bill propose amendments to several pieces of pension related legislation including the Financial Services Commission of Ontario Act, 1997, the Ontario Municipal Employees Retirement System Act, 2006, the Ontario Municipal Employees Retirement System Review Act, 2006 and the Pension Benefits Act.
To access the full text of the Bill, visit: http://www.ontla.on.ca/web/bills/bills_detail.do?locale=en&BillID=2600&detailPage=bills_detail_the_bill&Intranet
- Ontario: Proposed pension reforms outlined in Ontario Budget 2012
On March 27, 2012 the Ontario Government announced the Ontario Budget – Strong Action for Ontario. Chapter IV of the budget is titled Tax and Pension Systems and proposes several reforms to the Pension Benefits Act. The budget also outlines the Ontario Government’s intention to engage in stakeholder consultation and legislative initiatives relating to jointly sponsored pension plans (JSPPs), single-employer pension plans (SEPPs), and the improvement of efficiencies in pension fund management. Some of the proposed reform initiatives relate to ensuring that measures used to improve funding of JSPPs do not add additional expense, improving the sustainability of SEPPs, and the introduction of legislation to facilitate the pooling of pension fund assets.
The Ontario Government has also stated its intention to release new regulations under the Pension Benefits Act in order to implement pension reforms which are currently underway further to the Pension Benefits Amendment Act, 2010.
The budget also includes the Ontario Government’s position on the Federal Government’s model for pooled registered pension plans.
For more information and to access the full text of the budget, visit: http://www.fin.gov.on.ca/en/budget/ontariobudgets/2012/
- Ontario: Financial Services Commission of Ontario (FSCO) to issue second Actuarial Guidance Note
FSCO has announced its intention to issue Actuarial Guidance Note # 2 - Determination of the Solvency Liability Adjustment. FSCO has issued a consultation paper and interested stakeholders can review the paper and submit comments up to May 3, 2012.
For more information and to access the full text of the consultation paper, visit: http://www.fsco.gov.on.ca/en/pensions/actuarial/Pages/acu.aspx
- Ontario: Financial Services Commission of Ontario (FSCO) invites submissions relating to its draftStatement of Proposed Priorities and Strategic Directions
Pursuant to the Financial Services of Ontario Commission Act, FSCO is required to prepare a statement outlining proposed priorities for the coming year in connection with its administration of various acts, including the Pension and Benefits Act. FSCO has prepared a draft Statement of Priorities and Strategic Directions which is available on its website and has invited interested parties to file written submissions regarding what matters FSCO should identify as priorities. The deadline for filing written submissions is June 6, 2012.
For more information and to access the full text of FSCO’s draft Statement of Priorities and Strategic Directions, visit: http://www.fsco.gov.on.ca/en/about/annual_reports/Pages/default.aspx
- Ontario: Financial Services Commission of Ontario (FSCO) releases 2011 Report on the Funding of Defined Benefit Plans in Ontario
In March 2012, FSCO released the 2011 Report on the Funding of Defined Benefit Plans in Ontario. The report has been prepared to provide up to date funding, investment and actuarial information relating to defined benefit plans in Ontario. The report is based on the latest filed funding valuation reports for defined benefit plans with valuation dates between July 1 2008 and June 30, 2011, and on financial statements for the year ending between July 1 2010 and June 30, 2011.
For more information and to access the full text of the report, visit: http://www.fsco.gov.on.ca/en/pensions/Documents/DBFundRep2011.pdf
- Ontario: Financial Services Commission of Ontario (FSCO) issues revised pension policies in February and March 2012
In 2008, FSCO commenced a Pension Policy Review Project to review and revise active pension policies to ensure that policies are accurate and up to date with current FSCO policy positions, and legislative references. Further to this review project, FSCO has posted the following revised policies in February and March 2012:
- L200-303 - Schedule 1.1 Life Income Funds (New LIFs);
- M100-100 - Eligibility for Membership in a Pension Plan;
- M100-300 - Class of Employees;
- M100-400 - Separate Pension Plan for Part-Time Employees - Reasonably Equivalent Pension Benefits and Other Benefits; and
- M100-502 - Mandatory versus Optional Membership in a Pension Plan.
For the full text of the revised polices, visit: http://www.fsco.gov.on.ca/en/pensions/policies/Pages/review-project.aspx
- Quebec: Voluntary Retirement Savings Plans
In the March 2012 budget, the Quebec government proposed Voluntary Retirement Savings Plans, which would be mandatory for all employers with over five (5) employees. The budget information can be found here: http://www.budget.finances.gouv.qc.ca/Budget/2012-2013/en/documents/retirement.pdf
- Quebec: Funding Relief Measures
In November 2011, a bill was introduced in the Quebec National Assembly which would extend until December 31, 2013 certain funding measures to reduce the effects of the 2008 financial crisis on supplemental pension plans in Quebec.
Press release (French only)
New Developments: Atlantic Canada
- Nova Scotia:
On April 12, 2012, the government of Nova Scotia introduced the Financial Measures (2012) Act to implement the budget delivered on April 3, 2012. The Act proposes the establishment of a new joint governance framework for the public service pension plan. Pension and investment administration services will be provided by a new non-profit corporation.
- New Brunswick:
On February 10, 2012, the New Brunswick Court of Queen’s Bench released its decision in Saint John (City) Employee Pension Plan v. Ferguson. The Court concluded that the municipal Pension Board has sufficient personality and reputation to commence and sustain an action in defamation.
- New Brunswick:
On March 27, 2012, the government of New Brunswick delivered its budget. In considering possible legislative amendments and any recommendations from the Task Force on Protecting Pensions, the Minister reported: “Our goal is to ensure that employee benefits that have been earned to date will not be negatively affected by future changes while we separate pension reform from the collective bargaining process.” The Task Force’s report is expected during the spring legislative session.
- Newfoundland and Labrador:
On April 24, 2012, the government of Newfoundland and Labrador delivered its budget. The Minister reported that a third of the projected surplus will be invested to fund public service pension plans in the province.
- Newfoundland and Labrador: New Temporary Solvency Relief Introduced
Also in December 2011, the Newfoundland and Labrador Government filed amendments to the Solvency Funding Relief Regulations under the Pension Benefits Act providing new temporary solvency relief measures. The amendments add a new window of opportunity for applications for solvency relief. The window runs for pension plans reporting between January 1, 2010 and January 1, 2013.
Amendments to regulations
- Prince Edward Island: Pension Legislation Delayed
The PEI government introduced the province’s first Pension Benefits Act on December 1, 2010. The legislation was not passed before the government called an election on September 6, 2011. On October 3, 2011, the government was re-elected. A short legislative session began on November 1, 2011 and adjourned on November 9, 2011. The pension legislation has not yet been reintroduced.
New Developments: Federal
In January 2012, the Office of the Superintendent of Financial Institutions (OSFI) issued the Draft Instruction Guide - Authorization of Amendments Reducing Benefits in Defined Benefit Pension Plans. The draft Guide may be used in draft form and replaces the Instruction Guide for the Authorization of Amendment Reducing Benefits in Defined Benefit Pension Plans issued in April 2006.
- Federal: FAQ on Letters of Credit
The Office of the Superintendent of Financial Institutions released a FAQ on the use of Letters of Credit.
The FAQ can be found here: http://www.osfi-bsif.gc.ca/osfi/index_e.aspx?ArticleID=3802
- Federal: Progress of Pooled Registered Pension Plans
Bill C-25, the Pooled Registered Plans Act has been introduced in the House of Commons, passed second reading, and was referred to the Standing Committee on Finance. The Committee Report was presented on March 7, 2012.
The Bill can be followed here: http://www.parl.gc.ca/LEGISInfo/BillDetails.aspx?Language=E&Mode=1&billId=5242186
New Developments: General
- CAPSA: Introduction of New Guidelines
On November 15, 2011, the Canadian Association of Pension Supervisory Authorities ("CAPSA") released the final versions of:
- Guideline No. 6 on Pension Plan Prudent Investment Practices
- Self-Assessment Questionnaire on Prudent Investment Practices
- Guideline No. 7 on the Pension Plan Funding Policy
- Supreme Court: Re Indalex
On December 1, 2011, the Supreme Court of Canada granted leave in Re Indalex, the Ontario Court of Appeal decision concerning the priority of pension plan deficits under the Companies’ Creditors Arrangement Act.