August 2010 | | Ontario pension law reform: stage two
On August 24, 2010, the Ontario government released a second set of proposed reforms to modernize Ontario’s pension system. The proposals are based on recommendations from the Expert Commission on Pensions and reflect consultations with various stakeholders. Stage one, released in December 2009 (Eckler’s Special Notice — Ontario pension law reform: stage one), dealt mainly with technical issues. The proposed reforms in stage two address funding rules for defined benefit (DB) plans, clarification of pension surplus rules and changes to the Pension Benefits Guarantee Fund. The proposals will permanently exempt certain multi-employer pension plans (MEPPs) and jointly sponsored pension plans (JSPPs) from solvency funding. The main changes proposed under stage two are outlined in this Special Notice.
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June 2010 | | Simple amendment saves an Ontario multi-employer pension plan millions
The Financial Services Commission of Ontario (FSCO) has registered an amendment to an Ontario-registered multi-employer pension plan allowing it to reduce payouts to members who terminate and withdraw their pension benefits when the plan is under-funded. The reduction is permanent, with no requirement to pay the balance at a later date, thereby protecting the financial health of the plan for active and retired members.
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May 2010 | | Proposed Amendments to International Accounting Standard (IAS) 19 — Defined Benefit Plans
The International Accounting Standards Board (IASB) has just released its second exposure draft outlining proposed changes to their accounting standard IAS 19 — Employee Benefits. As expected, the proposed changes will force plan sponsors to recognize, on their balance sheet, the funded status of defined benefit (DB) pension plans and post-retirement plans through the immediate recognition of all changes in obligations and assets. The exposure draft also proposes changes to the presentation and disclosure of defined benefit costs.
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March 2010 | | Nova Scotia government response to Pension Review Panel
On March 5, 2010, the government of Nova Scotia published its response to the recommendations, provided by the Pension Review Panel in January 2009, through a discussion paper with a request for more public comment in certain areas. The government claims to have agreed with 90% of the recommendations in the Pension Review Panel’s report, and provides a discussion and summary for each of the recommendations. In this Special Notice, we comment on the key issues discussed in the government’s paper, and on the process and deadlines for feedback.
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December 2009 | | Ontario pension law reform: stage one
After a long wait, Ontario has finally introduced stage one of legislation to reform pension plan laws in the province. On December 9, 2009, the Minister of Finance tabled the Pension Benefits Amendment Act. It is based on the recommendations from the Expert Commission on Pensions made over a year ago. A second stage, planned for 2010, will address the big issues like plan funding rules and the pension guarantee fund. Stage one is mostly technical, with several changes that should simplify current pension plan administration, but not without cost. Their implementation will require communication to members, and administration and pension system changes. The main changes introduced in stage one are outlined below.
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November 2009 | | A preview of provincial pension reform?
On October 27, 2009, the federal government proposed a large package of pension reforms. While
the announced changes to the Income Tax Act (ITA) will apply to all defined benefit (DB) plans, most of the changes will be made to the Pension Benefits Standards Act, 1985 (PBSA) and would only apply for federally regulated pension plans. This Special Notice highlights some of the more unique changes proposed to the PBSA. With the Ontario government due to announce part of its reform package in November and with ongoing pension reform discussions among federal and provincial government officials, we wonder if the federal reforms may be a preview of changes proposed in provincial jurisdictions.
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November 2009 | | Nova Scotia: solvency-funding relief on the way
Employers sponsoring defined benefit plans in Nova Scotia are getting the long-awaited relief. Effective November 3, 2009, the Pension Benefits Act (PBA) regulations were amended to extend the time limit applicable to deficit funding.
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October 2009 | | Relief for processing catch-up pension payments
A new administrative policy, announced on September 21, 2009 by the Registered Plan Directorate (RPD) of the Canada Revenue Agency, brings some welcome relief for all defined benefit (DB) pension plan administrators. Effective immediately, DB plan administrators may now pay lump sums for missed pension payments without the prior approval of the RPD.
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September 2009 | | Update on commuted value transfers in Ontario
The Financial Services Commission of Ontario (FSCO) has just published some clarifications on the recent commuted value transfer policy. They should help pension plan administrators in implementing the new policy: Commuted Value Transfers T800-402.
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July 2009 | | Ontario imposes new limits on commuted value transfers
Effective immediately, Ontario plan administrators that know or ought to know that the plan’s transfer ratio has dropped by 10% or more and is below 0.9, must get approval from the Superintendent before allowing terminating members to transfer their commuted value or
buy an annuity.
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May 2009 | | Amendments to Nova Scotia Pension Benefits Act on hold pending provincial election
Within days of announcing proposed changes to the Nova Scotia Pension Benefits Act (PBA), the government was defeated on a confidence vote and Nova Scotians will now head to the polls for a
June 9th election. This has created uncertainty as to whether the changes will be implemented. This issue of Special Notice provides some details about the proposed changes and how they may affect defined benefit pension plans registered in Nova Scotia.
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December 2008 | | Ontario pension plans to be offered temporary solvency funding relief
The Ontario Provincial Government has announced that it will seek legislative approval to provide temporary funding relief for the 4,100 defined benefit pension plans registered in Ontario. The goal of the government is to “provide temporary solvency funding relief for plans affected by the 2008 financial market turmoil”, while at the same time “take steps to ensure transparency and security of pension benefits.”
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December 2008 | | Expert Commission supports special rules for multi-employer pension plans
On November 20, 2008, the Ontario government released the final report from the Expert Commission on Pensions called: "A Fine Balance: Safe Pensions, Affordable Plans, Fair Rules." The 222-page report makes 142 recommendations covering a wide range of pension issues. This Eckler Special Notice focuses on the recommendations that we think will be of most interest to trustees of Ontario multi-employer pension plans (MEPPs).
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December 2008 | | Joint Alberta-BC Expert Pension Panel Report
The Alberta-British Columbia Joint Expert Panel on Pension Standards issued their 241-page report entitled Getting our Acts Together; Pension Reform in Alberta and British Columbia on November 28, 2008. The Panel was appointed on October 19, 2007 by the Ministers of Finance of Alberta and British Columbia to conduct a full and independent public review of the pension standards legislation in Alberta and BC.
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November 2008 | | Finance Minister proposes funding relief (and other key changes)
Recognizing the impact that the current market meltdown has had on pension plan funding levels, the federal government has proposed some relief – which should ease the financial strain on federally regulated defined benefit pension plans (and members) facing the prospect of mounting plan contributions and an uncertain financial future.
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November 2008 | | Expert Commission Report on Pensions looks to reinvigorate Ontario’s pension system – while balancing stakeholder needs
After 18 months of consultation and analysis, the Ontario government has released its final report from the Expert Commission on Pensions, "A Fine Balance: Safe Pensions, Affordable Plans, Fair Rules". The report is thoughtful, thorough and – true to its name – seeks to balance the needs, desires and expectations of multiple stakeholder groups within Ontario’s pension system.
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November 2008 | | Update on revised standards of practice for pension commuted values
In the wake of tumbling financial markets, a growing number of companies with defined benefit pension plans are calling on the government to relax the rules for solvency funding. While the Canadian government ponders the next steps in this funding issue, there may be some relief on the horizon - in the form of revised standards of practice for commuted values.
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September 2008 | | Global and Canadian investment market turmoil
Is it over yet?
The continuing wind-out of the global credit crisis, as well as the impact of fear of a global economic slow down has left many wondering how long markets will continue to slide and what impact these events will have on the status of pension plans. More importantly, what should a pension fiduciary be doing in this environment?
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September 2008 | | CHANGES ON THE HORIZON FOR CANADIAN PENSION PLANS:
Executive Compensation Disclosure, Revised Pension Commuted Values and Changes to Accounting for Pensions (Halifax)
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August 2008 | | CHANGES ON THE HORIZON FOR CANADIAN PENSION PLANS:
Executive Compensation Disclosure, Revised Pension Commuted Values and Changes to Accounting for Pensions
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April 2008 | | NEWFOUNDLAND AND LABRADOR WILL REQUIRE FULL FUNDING ON WIND UP: Government amends the Pension Benefits Act
The government of Newfoundland and Labrador has introduced Bill 21 to amend the Pension Benefits Act. The amendment requires the plan sponsor of a pension plan being wound up to fully fund any deficits on wind up. Multi-employer pension plans are exempted from the full funding requirement.
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February 2008 | | TAX-FREE SAVINGS ACCOUNTS: Should they be part of an employer-sponsored savings program?
This week’s federal budget launched a brand new tax-preferred savings vehicle for Canadians – the Tax-Free Savings Account (TFSA). Starting in 2009, all Canadian residents who have reached age 18 will be able to contribute up to $5,000 per year to a TFSA. Contributions will be not tax-deductible, but investment income, capital gains and any withdrawals will be tax-free. More details about how TFSAs will work are listed at the end of this notice.
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November 2007 | | NOVA SCOTIA MOVES TO FULL WIND-UP FUNDING: Pension plan sponsors to cover wind-up shortfalls – including grow-in benefits
The Nova Scotia government introduced a bill last week that would require pension plan sponsors to fully fund any deficits on plan wind-up, including the cost of any “grow-in” benefits. The bill has been tabled for first reading in the legislature, but it has not yet been passed or proclaimed into law. If proclaimed, the new rules will apply retroactively to wind-ups since July 20, 2007
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August 2007 | | NEW SOLVENCY FUNDING RELIEF PROVISIONS FOR SOME ONTARIO MEPPs
In a move to improve flexibility in the funding requirements for defined benefit Multi-Employer Pension Plans (MEPPs), the Ontario government will implement important changes to the regulations of the Ontario Pension Benefits Act. The changes, to be codified in regulations published in The Ontario Gazette on September 8, 2007, permit certain Ontario-registered MEPPs to exclude consideration of any new solvency deficiencies in setting contributions based on actuarial valuations with effective dates between September 1, 2007 and August 31, 2010.
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August 2007 | | PROPOSED CANADIAN ACCOUNTING CHANGES DROPPED: No new reporting rules for pensions and benefits for year-end 2007
Canada’s Accounting Standards Board (AcSB) announced yesterday that it has elected not to proceed with recently proposed changes to CICA Handbook Section 3461, Employee Future Benefits. The proposals released in March would have applied to many plan sponsors from the end of 2007, and could have affected the sponsor’s balance sheet dramatically.
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July 2007 | | CONTRIBUTION HOLIDAYS AND PENSION PLAN EXPENSES: KERRY APPEAL CLARIFIES RULES FOR COMBINATION DB/DC PLANS
A unanimous judgement by the Court of Appeal for Ontario in Kerry (Canada) Inc. v. DCA Employees Pension Committee provides some much-needed clarification for plan sponsors on the issues of payment of plan expenses from a pension fund and contribution holidays. The Court of Appeal decision published on June 5, 2007 overturns the Divisional Court’s judgement and upholds earlier decisions by the Financial Services Tribunal.
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March 2007 | | BUDGET 2007 WHAT IT MEANS FOR PENSION PLAN MEMBERS AND SPONSORS
On March 19, 2007, the federal government tabled its 2007 budget. The proposals related to retirement savings promise to give employers more flexibility to retain older, more experienced workers – and to give workers added flexibility to ease into retirement while continuing to work.
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November 2006 | | FEDERAL GOVERNMENT IMPLEMENTS INCOME TRUST TAXATION
Federal Finance Minister Jim Flaherty, last night, made a surprise announcement detailing the government’s plan to level the taxation playing field between income trusts and corporations. Billed as the Tax Fairness Plan for Canadians (the Plan), the announcement implements a levy on the distributions paid out by income trusts. The Plan’s objective is to stop the loss of tax revenue by both the federal and provincial governments from corporations converting to the income trust structure.
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June 2006 | | NEW ANNUAL FILING REQUIRED FOR ONTARIO PENSION PLANS
Starting on June 30, 2006, sponsors of defined benefit pension plans registered in Ontario must complete a new annual filing with the Financial Services Commission of Ontario (FSCO). The new Form 8, Investment Information Summary (IIS), provides information to enable FSCO to monitor investment activity in pension plans, and to flag plans whose investment profile falls outside of industry norms.
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October 2005 | | CAPITAL ACCUMULATION PLAN (CAP) GUIDELINES
Where has the time gone? A full year and a half has passed since the final version of CAP Guidelines was released by the Joint
Forum of Financial Market Regulators. Industry stakeholders are expected to adopt and comply with the Guidelines by the end
of 2005. So, with little more than 10 weeks remaining before the December 31, 2005 deadline, it’s time to take stock of your
organization’s progress towards compliance.
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June 2005 | | ENDING MANDATORY RETIREMENT IN ONTARIO
The Ontario government recently introduced legislation that would end the practice of forcing employees to retire once they reach the age 65. While the change may be very significant in terms of workforce planning decisions, it is not expected to have a major effect on the operation or design of employee benefit and pension plans. Currently, the Ontario Human Rights Code...
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June 2005 | | A CALL TO ACTION: YOUR OPPORTUNITY TO HELP STRENGTHEN CANADA'S DEFINED BENEFIT PLAN FRAMEWORK
The Department of Finance has issued a consultation paper seeking the views of Canadians on how to strengthen the legislative and regulatory framework for federally regulated defined benefit pension plans. Any changes ultimately adopted from this consultation process would result in amendments to the Federal Pension Benefits Standards Act (PBSA). This Special Notice ...
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February 2005 | | BUDGET 2005 BRINGS IMPORTANT CHANGES TO TAX-DEFERRED RETIREMENT PLANS
The minority Liberal government delivered a budget this week which should receive favourable reviews from the retirement industry. The budget promises to:
• eliminate the long-standing foreign property rule that restricts plan investments, effective immediately, and
• extend the fixed schedule of increases to pension plan and RRSP limits, thereby delaying the automatic indexation of these limits until 2010 and 2011 respectively.
Successful implementation of the proposals will depend on the minority Liberal government’s ability to steer…
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February 2005 | | Pension changes in store for Manitobans
Manitoba pension legislation is on the brink of a major overhaul and Canadian pension plan sponsors with Manitoba members will soon face some major changes to their plans. The effective date is as yet unknown, but with Bill 10 expected to pass into law when the Manitoba legislature reconvenes this spring, sponsors may wish to begin evaluating the impact on their plans. Many changes, such as the move to a minimum 60% surviving spouse’s pension…
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January 2005 | | Enhanced disclosure of executive retirement benefits
With the recent rise in complex compensation structures, many shareholders find it difficult to understand what executives are paid and how compensation is determined. As a result, shareholder
representatives are urging public companies to improve disclosure. In particular, companies are being pressured to report more details about the value of executive retirement benefits, such as supplementary pension plans, in the context of overall compensation.
Under current Canadian disclosure ...
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