Special Notice

Special Notice

Special Notice provides timely information and insights on legal, legislative and regulatory developments relating to pensions and benefits.

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March 20, 2019  –  2019 Federal Budget: Investments Across Generations
 

The 2019 Federal Budget, Investing in the Middle Class (Budget), was tabled by Finance Minister Bill Morneau on March 19, 2019. Key announcements of interest to employers and benefits plan sponsors, include:

  • Increased retirement security and flexibility for Canadian workers;
  • Changes to improve participation in the Canada Pension Plan;
  • Continued progress towards a national pharmacare strategy;
  • Measures to address major health care challenges;
  • Changes to tax measures affecting health care;
  • Increased support for persons with disabilities; and
  • Other measures related to privacy, parental leave and employee stock options.

This Special Notice provides a summary of key Budget measures and their impact on employers and plan sponsors.

February 20, 2019  –  Updated CAPSA Guideline No. 8 Provides Best Practices for Variable Benefits
 

The Canadian Association of Pension Supervisory Authorities (CAPSA) has released an updated version of Guideline No. 8: Defined Contribution Pension Plans Guideline (Guideline). This Guideline was first introduced in March 2014 to clarify the rights and responsibilities of defined contribution (DC) plan stakeholders – including administrators, service providers and members – and to provide guidance to administrators on the tools and information they should give members during the accumulation phase, when approaching the payout phase and during the payout phase.

As DC pension plans continue to mature and more members reach retirement age, the revised Guideline is a response to stakeholder requests for more detailed direction on best practices relating to the payout phase. It also provides some additional requirements concerning fee disclosure. This notice provides an overview of the main changes introduced in the updated Guideline.

January 11, 2019  –  Selected pension and benefit statistics
 
  • Income Tax Act - Pension and Savings Maximums
  • Employment Insurance (EI)
  • Quebec Parental Insurance Plan (QPIP)
  • Old Age Security (OAS)
  • Guaranteed Income Supplement (GIS) 
  • Monthly Payment Allowance
  • Canada Pension Plan (CPP)
  • Quebec Pension Plan (QPP)
December 20, 2018  –  Quebec Outlines Minimum Solvency Funding for Multi-jurisdictional DB Plans
 

On December 5, 2018, the government of Quebec issued a draft regulation regarding the Supplemental Pension Plans Act (SPPA), prescribing the minimum solvency funding requirements of multi-jurisdictional defined benefit (DB) pension plans registered in Quebec. The regulation requires that a solvency de?ciency must be determined in plans with a solvency ratio of less than 75% after December 30, 2018.

The draft regulation is in response to asset allocation issues pursuant to the 2016 Agreement Respecting Multi-Jurisdictional Pension Plans. Under this agreement, upon windup of a multi-jurisdictional pension plan, assets are allocated to members working in each province based on the members’ windup liabilities. However, provinces where solvency funding is not required are placed lower on the priority list for asset allocation purposes.

For multi-jurisdictional pension plans in Quebec, this often means assets are allocated to members at a lower ratio than to members in other provinces. The proposed changes will correct this issue, giving Quebec members a comparable level of benefit protection and priority.

June 4, 2018  –  Human Rights Tribunal of Ontario Finds Discontinuing Employee Benefits at Age 65 Violates Charter of Rights and Freedoms
 

The Human Rights Tribunal of Ontario (Tribunal) has released a significant interim decision in Talos v. Grand Erie District School Board (Talos). The Tribunal concluded that the practice of applying provisions of the Ontario Human Rights Code (Code), combined with the regulations on benefit plan coverage under the Employment Standards Act, 2000 (ESA), to reduce or terminate benefit plan coverage for Ontario employees once they reach age 65, discriminated against employees based on age contrary to the Canadian Charter of Rights and Freedoms (Charter).

This Special Notice provides an overview of the Talos decision, and its implications for Ontario employers and benefit plan sponsors. Please contact your Eckler consultant to obtain more information about how this decision could affect your organization’s plans.

May 11, 2018  –  Ontario Defined Benefit Plan Funding Reform: Funding Rules Finalized
 

In December 2017, Ontario released the highly anticipated details of its consultation on Reform of Ontario’s Funding Rules for Defined Benefit Pension Plans: Description of New Funding Rules (Consultation). Ontario has since finalized its new funding rules for defined benefit (DB) pension plans with the April 20, 2018 filing of O. Reg. 250/18 (Regulation). The Regulation follows a Consultation released in December 2017, that provided a description of proposed regulations and that was discussed in Eckler’s Special Notice, Ontario Defined Benefit Pension Funding Reform Moves Closer (December 21, 2017).

The funding rules outlined within the Regulation apply to actuarial valuations with a valuation date of December 31, 2017 or later, and filed after April 30, 2018. The new funding rules will not apply to specific jointly sponsored pension plans (JSPPs) or to Specified Ontario Multi-Employer Pension Plans (SOMEPPs), but will apply to multiemployer plans that are not SOMEPPs.

In addition to funding rules, the Regulation also details changes to the calculation of the annual Pension Benefits Guarantee Fund (PBGF) assessment. The new assessment formula, the subject of a Consultation released in January 2018, will take effect for assessment dates of January 1, 2019 and later. The 2018 Budget announced that the corresponding increase in the PBGF coverage limit to $1,500 per month, and the related elimination of age and service requirements for coverage, will be effective retroactively for plans wound up on May 19, 2017, or later.

This Special Notice provides an overview of the Regulation and the new funding framework, as well as details regarding the impact these new funding rules will have on affected Ontario-registered DB plans. Please contact your Eckler consultant to obtain more information about how these changes will affect your organization’s plans.

April 6, 2018  –  Ontario Releases Funding Framework for Target Benefit MEPPs
 

On April 4, 2018, Ontario’s Ministry of Finance released a consultation on the proposed funding framework for target benefit multi-employer pension plans (TB MEPPs). The consultation is open for comment until May 4, 2018.

The consultation’s release was promised in the 2018 Ontario Budget, tabled March 27, 2018. Once finalized, the TB MEPP framework will replace the temporary funding rules in place for specified Ontario multi-employer pension plans (SOMEPPs), and extend the application of these rules to TB MEPPs that would not previously satisfy the SOMEPP criteria. The proposed framework:

  • Permanently exempts TB MEPPs from solvency funding;
  • Requires 15-year amortization of going concern deficiencies;
  • Implements a provision for adverse deviations (PfAD), designed to improve benefit security;
  • Introduces a new basis for calculating commuted values (CVs) on member termination or plan wind-up;
  • Implements new rules for determining benefit reductions where required funding levels are not met;
  • Requires the creation and use of funding and governance policies; and
  • Introduces enhanced disclosure to plan beneficiaries.

This Special Notice provides an overview of the consultation and next steps, and provides an initial assessment of the potential impact of the proposed new framework on SOMEPPs and other Ontario-registered collectively bargained MEPPs. Please contact your Eckler consultant to obtain more information about how these changes may affect your plan.

March 29, 2018  –  2018 Ontario Budget: Focus on Care and Protection
 

The 2018 Ontario Budget, A Plan for Care and Opportunity (Budget), was tabled by Minister of Finance Charles Sousa on March 28, 2018. The government also introduced Budget legislation in Bill 31, Plan for Care and Opportunity Act (Budget Measures), 2018.

Key announcements of interest to employers and benefits plan sponsors, include:

  • Introducing a new Ontario Drug and Dental Program in the summer of 2019 for Ontarians without extended health coverage;
  • Expanding the OHIP+ Program to seniors as of August 2019;
  • Changing eligibility rules for the Employer Health Tax (EHT) exemption;
  • Developing measures to protect pension plan members, including changes to the Pension Benefits Guarantee Fund (PBGF), in response to the closure of Sears Canada;
  • Update on changes to funding rules for single and multi-employer defined benefit (DB) pension plans in the private sector; and
  • Update on creation of the Financial Services Regulatory Authority (FSRA).

This Special Notice provides a summary of key aspects of the Budget and Bill 31, and their impact on employers and plan sponsors.

February 28, 2018  –  2018 Federal Budget: Goodbye Health and Welfare Trusts; Hello Expanded Parental Leave
 

The 2018 Federal Budget, Equality + Growth, A Strong Middle Class (Budget), was tabled by Finance Minister Bill Morneau on February 27, 2018. Key announcements of interest to employers and benefits plan sponsors include:

  • Elimination of health and welfare trusts (HWTs) in favour of Employee Life and Health Trusts (ELHTs);
  • Introduction of a new Parental Sharing Benefit through the Employment Insurance (EI) program;
  • Consultations on a national pharmacare program;
  • Additional enhancements to the Canada Pension Plan (CPP);
  • Consultations aimed at enhancing pension protections in the event of a plan sponsor’s bankruptcy;
  • Consultations aimed at addressing the issue of unclaimed pension balances; and
  • Introduction of pay equity legislation and new leaves of absence for federally regulated employees.

This Special Notice provides a summary of the key Budget measures, and their impact on employers and plan sponsors.

 

January 8, 2018  –  Selected pension and benefit statistics
 

This Special Notice outlines:

  • Income Tax Act - Pension and Savings Maximums
  • Employment Insurance (EI)
  • Quebec Parental Insurance Plan (QPIP)
  • Old Age Security (OAS)
  • Guaranteed Income Supplement (GIS) 
  • Monthly Payment Allowance
  • Canada Pension Plan (CPP)
  • Quebec Pension Plan (QPP)