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New Legal Developments – Central Canada

  1. Ontario

    (a) Ontario Budget 2014 including Proposed Ontario Pension Plan

    On May 1, 2014, the Ontario Government released its 2014 Budget (the “Budget”). Chapter IV of the Budget is titled Strengthening Retirement Security in Ontario and outlines the following proposed pension initiatives:

    • Introduction of an Ontario Retirement Pension Plan;
    • Enabling Pooled Registered Pension Plan to be offered in Ontario;
    • Reforming rules relating to defined benefit plans, facilitating conversions to jointly sponsored pension plans and enabling asset pooling for broader public sector plans;
    • Conducting consultations on target benefit plans; and
    • Appointing an expert committee to develop recommendations around regulations for the financial planning industry.

    To access the full text of the budget, visit:

    (b) Legislative update – December 2013 to July 2014

    i) New legislative provisions clarifying spousal entitlement to death benefits

    On July 24, 2014, Bill 14, An Act to implement Budget measures and to enact and amend various Acts (“Bill 14”) received Royal Assent. Bill 14 amends sections 44 and 48 of the Pension Benefits Act (the “Act”) to clarify spousal entitlement to death benefits (following the Ontario Court of appeal’s 2012 decision in Carrigan v. Carrigan Estate). The new provisions clarify the following:

    1. (a) Pre-retirement death benefit - where a plan member who is separated from a married spouse dies before retirement, and had a common law spouse at the time of death, the common law spouse is entitled to the death benefit.

      (b) The new provision discharges plan administrators who paid pre-retirement death benefits to common law spouses in such situations prior to October 31, 2012.

    2. (a) Joint and survivor pension - where a plan member is separated from a married spouse, and has a common law spouse on the date pension payments commence, the pension is to be paid as a joint and survivor pension. If the retired member dies, the common law spouse is entitled to the death benefit.

      (b) The new provision discharges plan administrators who paid joint and survivor benefits to common law spouses in such situations prior to the effective date of the provision.

    (ii) On May 1, 2014, Bill 194 Building Opportunity and Securing Our Future Act (Budget Measures), 2014 passed first reading. Bill 194 proposes amendments to the Pension Benefits Act that would provide for conversions of single employer plans into jointly sponsored pension plans (JSPPs).

    To access the full text of Bill 194, visit:

    iii) On March 19, 2014 Bill 174, An Act to amend the Pension Benefits Act was introduced. Bill 174 is a private member’s bill that proposes to amend the Pension Benefits Act to raise the maximum amount guaranteed by the Pension Benefits Guarantee Fund from $1,000 to $2,500. Bill 174 passed second reading and was referred to the Standing Committee on Finance and Economic Affairs on April 3, 2014.

    To access the full text of Bill 174, visit:

    iv) As part of ongoing reforms to the Pension Benefits Act, major changes to Ontario’s asset transfer rules were made effective January 1, 2014. The changes apply to a transfer of assets between pension plans of separate employers, either through the sale, assignment or disposition of a business, or between plans of the same employer.

    For more information, visit:

    v) The following legislation amending the Pension Benefits Act came into force on January 1, 2014:

    vi) On December 11, 2013 the Ontario Government announced the introduction of the Strengthening and Improving Government Act, 2013 (Bill 151). Bill 151 carried first reading on December 11, 2013. If passed, Schedule 2 of the bill would amend the Pension Benefits Act by introducing changes affecting spousal entitlements to pre- and post-retirement benefits, and an individual’s ability to consolidate their pension benefits.

    To access the announcement visit:

    To access the full text of the bill, visit:

    (c) Regulatory Update

    i) On May 1, 2014, the following regulations were filed under the Pension Benefits Act:

    • O. Reg. 118/14 amending O. Reg. 178/11 (Solvency Funding Relief For Certain Public Sector Pension Plans). This regulation relates to stage two solvency funding relief for public sector pension plans.

    • O. Reg. 119/14 amending Regulation 909 R.R.O 1990 (General) under the Pensions Benefits Act. This regulation adds to the list of public sector pension plans to which specified letter of credit provisions of the Pension Benefits Act will apply; and stipulates that letters of credit must be subject to a trust agreement between the issuer, administrator and the trustee.

    To access the full text of these regulations, visit:

    ii) On April 10, 2014, the following regulations were filed under the Pension Benefits Act:

    • O. Reg. 105/14 amending O. Reg. 196/11 (Abibow Canada Inc. Pension Plans). This regulation amends the title of O. Reg. 196/11 to read Resolute FP Canada Inc. Pension Plans; and also affects provisions of the amended regulation that relate to funding, amortization and transition of deferral contributions.

    • O. Reg. 106/14 amending Regulation 909 R.R.O 1990 (General) under the Pensions Benefits Act. This regulation relates to the Abibow Canada Inc. Pension Plans; and amends Regulation 909, R.R.O. 1990 (General) by replacing the references to “Abibow Canada Inc. Pension Plans” with “Resolute FP Canada Inc.”.

    To access the full text of these regulations, visit:

    iii) On March 7, 2014, the following regulations were filed under the Pension Benefits Act:

    • O. Reg. 51/14 amending Regulation 909 R.R.O 1990 (General) under the Pensions Benefits Act. This regulation relates to investments in securities issued by the Government of the United States of America.

    • O. Reg. 52/14 amending O. Reg. 202/02 (Essar Steel Algoma Inc. Pension Plans). This regulation relates to funding rules for the Essar Steel Algoma Inc. Pension Plans.

    To access the full text these regulations, visit:

    iv) On December 13, 2013, the following regulations amending the Pension Benefits Act were filed:

    • Ontario Regulation 326/13 amending O. Reg. 156/13 (General Synod Pension Plan of the Anglican Church of Canada) under the Pensions Benefits Act;

    • Ontario Regulation 327/13 amending O. Reg. 202/02 (Algoma Steele Inc. Pension Plans) under the Pensions Benefits Act; and

    • Ontario Regulation 328/13 amending Regulation 909 R.R.O 1990 (General) under the Pensions Benefits Act.

    To access the full text of these regulations, visit:

    v) On November 29 2013, the following regulations amending the Pension Benefits Act were filed:

    • Ontario Regulation 306/13 amending Regulation 909 R.R.O 1990 (General) under the Pensions Benefits Act;

    • Ontario Regulation 307/13 amending O. Reg. 178/11 under the Pensions Benefits Act;

    • Ontario Regulation 308/13 relating to asset transfers under section 80.1 of the Pensions Benefits Act; and

    • Ontario Regulation 310/13 relating to asset transfers under section 80 and 81 of the Pensions Benefits Act.

    To access the full text of these regulations, visit:

  2. Quebec

    (a) Voluntary Retirement Savings Plan (VRSP)

    On December 3, 2013, Bill 39 aimed at creating the Quebec version of the pooled registered pension plan was passed. The Voluntary Retirement Savings Plan Act will come into force on July 1, 2014. The legislation will gradually require corporations that do not already offer a group RRSP or TFSA or a registered pension plan, to offer VRSPs to their employees depending on the size of the corporation:

    • Corporations with 20 or more eligible employees must offer a VRSP by December 31, 2016;
    • Corporations with 10 to 19 eligible employees must offer a VRSP by December 31, 2017; and
    • Corporations with 5 to 9 eligible employees must offer a VRSP by a date yet to be determined by the government.

    For more information, please visit:

    (b) D’Amours report on pension plan reform in Québec

    In April, 2013, the report on Innovating for a Sustainable Retirement System – a Social Contract to Strengthen the Financial Security of all Québec Workers was released. The report was based on a study by a committee mandated by the Régie des rentes Québec and contains numerous recommendations to ensure the sustainability of the Quebec retirement system.

    For a summary of the report, visit:

    To read the full report, visit:
    http://www.rrq.gouv.qc.ca/SiteCollectionDocuments/www.rrq.gouv.qc/Anglais/publications/rapport_comite/rapport.pdf (French only).

    (c) Action Plan for the Sustainability of Pension Plans

    In response to the D’Amours Report, on December 12, 2013 the government unveiled an action plan aimed at ensuring the sustainability of defined benefit (DB) pension plans in Quebec. The action plan seeks to establish a framework for restructuring DB plans as well as amending the funding rules for DB plans. A detailed timeline is set out in the action plan. It describes the process that will be followed over the next two years. Legislation is expected to be tabled this spring to formalize the time-lines and restructuring process and additional legislation in the fall of 2014 is contemplated to facilitate the solutions proposed during the next few months.

    For more information, please visit:

New Legal Developments – Western Canada

  1. Alberta

    (a) New Employment Pension Plans Act

    On July 22, 2014, the Alberta government enacted supporting regulations under the Employment Pension Plans Act (“New EPPA”). Although the New EPPA was passed in late 2012, it had yet to be proclaimed in force pending the promulgation of regulations. The New EPPA and regulations come into force on September 1, 2014. Employers and administrators have until December 31, 2014 to file compliance amendments to plans registered in Alberta or including members employed in provincially-regulated employment in Alberta.

    Act: http://www.qp.alberta.ca/1266.cfm?page=e08p1.cfm&leg_type=Acts&isbncln=9780779769353&display=html

    Regs: http://www.qp.alberta.ca/documents/orders/orders_in_council/2014/714/2014_333.html

    In addition, the New EPPA requires an administrator to adopt a “governance policy” addressing prescribed items and to ensure that each plan with a benefit formula (either a defined benefit or target benefit provision) adopt a “funding policy”. The mandatory governance policy and, if applicable, funding policy must be in place by August 31, 2015.

    Alberta Treasury Board and Finance has begun to prepare new policies to reflect the regulator’s interpretation of and expectations relating to the New EPPA. Of note to date is its update “Administrative Information & Checklists”, which summarizes mandatory and optional plan provisions under the New EPPA, and its update “Summary of Changes”, which compares the regulations under the previous Act to the regulations under the New EPPA.

    New Legislation – Administrative Information and Checklists:

    Summary of Changes:

    New EPPA Updates:

    (b) Alberta Pension Governance Research Project: Final Report

    On October 31, 2013, the Alberta Pension Governance Research Project Final Report was released. This report for Alberta Treasury Board and Finance was prepared by Christopher Eaton, Norma Nielson, and Laurie Milton of the Haskayne School of Business, University of Calgary. The main purpose of the study was to provide a well-researched perspective on pension governance to help inform the Government of Alberta's decisions on potential reforms affecting public sector pension plans. The full report is available here: http://www.finance.alberta.ca/publications/pensions/sustainability/2013-1031-Alberta-Pension-Governance-Research-Project-Final-Report.pdf.

    The Alberta government separately launched a consultation with stakeholders on proposed changes to Alberta’s public sector pension plans. The consultation period closed on 1 January 2014. Final proposals and reforms will be announced in Spring 2014.

    (c) Pooled Registered Pension Plans

    On May 27, 2013, Bill 18, the Pooled Registered Pension Plans Act, received Royal Assent. When proclaimed in force, the Act will facilitate the offering and administration of voluntary pooled registered pension plans (“PRPPs”) to employees and self-employed individuals in Alberta.

    For more information on PRPPs in Alberta, visit:

  2. British Columbia

    (a) New Pension Legislation

    New pension legislation, known as Bill 38, was passed by the British Columbia Legislature in 2012. This legislation is not yet in effect. Further information on this legislation will be provided for pension plan members and plan administrators closer to the day that it comes into effect. Bill 38 can be viewed at http://www.leg.bc.ca/39th4th/3rd_read/gov38-3.htm.

  3. Saskatchewan

    On May 12, 2014, the Saskatchewan government announced stakeholder consultations regarding potential amendments to the Pension Benefits Act, 1992 to provide for mandatory unlocking under pension plans and locked-in retirement accounts. The consultation period was open until June 20, 2014. The government’s request for consultations remains available online for background. The Canadian Bar Association’s National Pension and Benefits Law Section’s submissions are available elsewhere on the Section’s website.

New Legal Developments – Atlantic Canada

  1. Newfoundland and Labrador – Extension of Solvency Exemptions

    In December 2013, the Government of Newfoundland and Labrador filed three amendments to the Pension Benefits Act Regulations that extend solvency exemptions for multi-employer pension plans, and the pension plans for the Town of Happy Valley-Goose Bay and the City of St. John’s. All three exemptions are effective for valuation reports covering periods up to December 31, 2015.

  2. New Brunswick – Conversions to “Shared Risk Plans”

    i) Members of the New Brunswick Legislative Assembly were transitioned into a “Shared Risk Pension Plan”. Amendments to the Members’ Pension Act and Members Superannuation Act affecting the transition, which also increase the retirement age, came into force on July 1, 2014 – though they will only impact on members’ service after September 22, 2014, the provincial election date. Bill 51, which contains the amendments, can be seen here: http://www.gnb.ca/legis/bill/pdf/57/4/Bill-51.pdf

    ii) New Brunswick Teachers were also converted to a version of a shared risk plan effective July 1, 2014. Newly introduced legislation will effectively eliminate special payments by the provincial government, which have amounted to $85 million over the past 10 years. The full text of the Teachers’ Pension Plan Act can be seen here: http://www.gnb.ca/legis/bill/pdf/57/4/Bill-85.pdf

    iii) On July 29, 2014, the New Brunswick legislature passed amendments to the Pension Benefits Act to convert the pension plans of Twin Rivers Papers Co. employees to a shared risk plan. The changes will have the effect of increasing the pension amounts of Fraser Papers retirees, and Twin Rivers has agreed to make payments of $12.5 million and $52.9 million into the plan over the next four to 15 years . The amendments appear at: http://www.gnb.ca/legis/bill/pdf/57/4/Bill-92.pdf

  3. Nova Scotia

    (a) New Pension Benefits Act Passed & Regulations Introduced

    On November 15, 2011, the Nova Scotia Government introduced Bill No. 96, a new Pension Benefits Act following recent law reform initiatives in 2009 and 2010.The new Bill received Royal Assent on December 15, 2011 and is yet to be proclaimed. The new Act as passed is available at: http://nslegislature.ca/legc/bills/61st_3rd/3rd_read/b096.htm.

    Draft funding regulations to the new Pension Benefits Act were posted on December 7, 2011, and can be viewed at: http://www.gov.ns.ca/lae/pensions/docs/DraftFundingRegs.pdf.

    General draft Pension Benefits Regulations were posted on December 7, 2012, and are available for review at: http://www.gov.ns.ca/lae/policy/docs/DaftPensionRegs.pdf.

    Comments were requested for submission by January 7, 2013.

    (b) Solvency Relief Provisions Enacted

    On February 12, 2013, amendments to the Pension Benefits Regulations were filed, which provide further solvency funding relief for private defined benefit pension plans.
    The amendments can be found here: http://www.gov.ns.ca/just/regulations/rg2/2013/fe2213.pdf.

  4. Prince Edward Island - New Pension Legislation Introduced

    For the third time, the PEI Government introduced the Pension Benefits Act on November 21, 2012, as Bill 12. It is substantially the same as Bill 41, which was introduced on May 17, 2012.
    Bill 12, as passed on first reading, is available at: http://www.assembly.pe.ca/bills/pdf_first/64/3/bill-12.pdf

New Legal Developments – Federal

(a) Investment in Limited Partnerships

In a policy advisory issued in May 2014, the Office of the Superintendent of Financial Institutions (“OSFI”) addressed the question of whether a limited partnership established by a corporation could qualify as a “pooled fund” or “mutual fund” as defined under Subsection 2(1) of the Pension Benefits Standards Regulations (“PBSR”). OSFI confirmed that some limited partnerships could meet the definition of a “mutual fund” or “pooled fund” for purposes of section 9 of Schedule III of the PBSR, but this depends on the particulars of the fund. An example of when a limited partnership would meet the definition is where:

  • the fund was established by a corporation, such as its general partner;
  • two or more investors, all independent from the general partner, contributed capital to the fund and acquired limited partnership interests;
  • the interests held by each investor are allocated proportionate to the interest in the assets of the fund;
  • the limited partnership interests can be sold or redeemed in a timely manner; and othe primary purpose of the fund is to invest the moneys of the fund’s investors.

For more information, please visit: http://www.osfi-bsif.gc.ca/Eng/pp-rr/ppa-rra/inv-plc/Pages/dmpf.aspx.

(b) Longevity Risk Hedging Contracts

In June, OSFI released a policy advisory regarding its expectations for plan administrators choosing to enter into “longevity risk hedging contracts.” OSFI confirmed that whether structured as a longevity swap or as longevity insurance (e.g., buy-in or buy-out annuities), a plan administrator that enters into a longevity risk hedging contract, as part of a risk mitigation strategy, retains “the ultimate responsibility for paying pension benefits” to plan beneficiaries. Accordingly, OSFI expects plan administrators to assess, inter alia, counterparty risk, legal risk, rollover risk as the contracts expire, and basis risk when using index-based longevity risk hedging contracts. Longevity risk hedging contracts are permissible provided that they are consistent with the terms of the pension plan, the plan’s Statement of Investment Policies and Procedures complies with Pension Benefits Standards Act (“PBSA”) and PBSR, and plan administrator exercises due diligence. For more information, please visit: at http://www.osfi-bsif.gc.ca/Eng/pp-rr/ppa-rra/inv-plc/Pages/LongIns.aspx.

(c) Long-Term Disability (LTD) Benefits

Effective July 1, 2014, federally-regulated employers that offer long-term disability (LTD) benefits to their employees must provide those benefits on an insured basis. In 2012, the federal government passed Bill C-38, the Jobs, Growth and Long-term Prosperity Act, which amended (among other things) the Canada Labour Code to require that LTD plans in the federally-regulated private sector be insured. Employers will only need to provide insured LTD benefits on a prospective basis; employers will not need to insure benefits for those who are already in receipt of LTD benefits on July 1, 2014 nor insure such benefits for those who have applied for LTD prior to July 1, 2014. The change is meant to provide stability and protection to workers from reduced or eliminated long-term disability benefits when corporate employers are bankrupt or insolvent.

(d) Update on the Regulatory Reporting System (RRS)

OSFI is in the process of creating a new regulatory filing solution known as the RRS. All federally regulated pension plans will be transitioning from the current “Automated Data Transfer” system to the new RRS solution. The RRS provides a more integrated approach to managing and administering all aspects of the regulatory return process, including more self-service options. Phase 2 of the RRS solution is planned to be active on April 28, 2014.

For more information, visit: http://www.osfi-bsif.gc.ca/Eng/fi-if/rtn-rlv/fr-rf/rrs-sdr/Pages/RRSpkg.aspx.

(e) Solvency Information Return – OSFI 575

Defined benefit or combination-type pension plans registered under the Pension Benefits Standards Act, 1985 are required to file OSFI 575 on the later of 45 days after the plan year-end or February 15, 2014. The purpose of OSFI 575 is to gather information that OSFI uses in calculating the estimated solvency ratio for a pension plan.

The form can be found at: http://www.osfi-bsif.gc.ca/Eng/Docs/SIR2014.xlsx.

(f) Update on Pooled Registered Pension Plans

The Pooled Registered Pension Plan Act came into force in December 2012. A pooled registered pension plan (PRPP) is a new type of defined contribution pension plan offered under federal jurisdiction to employers and to self-employed persons. The goal of the PRPP is to provide a “low cost” and accessible retirement savings vehicle for Canadians who do not currently participate in an employer sponsored pension plan. PRPPs are administered by financial institutions, rather than an employer, and all PRPP administrators must be licensed by the Superintendent of Financial Services.

The Pooled Registered Pension Plan Act establishes minimum standards that all PRPPs and PRPP administrators must adhere to. For more information and links to the legislation, please visit: http://www.osfi-bsif.gc.ca/Eng/pp-rr/ppa-rra/prpp-rpac/Pages/default.aspx.

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