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Posted by Hicks Morley
on February 17, 2012
On February 17, 2012, the Ontario government filed an amendment to O. Reg. 178/11 (Solvency Funding Relief For Certain Public Sector Pension Plans) under the Pension Benefits Act.
O. Reg. 12/12 prescribes those plans that have successfully applied for and, are receiving, solvency funding relief under O. Reg. 178/11.
The Regulation is now in force.
The details regarding solvency funding relief for public sector pension plans were first announced in February, 2011.
Posted by Hicks Morley
on February 06, 2012
On February 1, 2012, Bill C-25, An Act relating to pooled registered pension plans and making related amendments to other Acts passed at Second Reading in the House of Commons, and was referred to the Standing Committee on Finance.
As previously reported, Bill C-25 is new legislation implementing the framework for federally regulated PRPPs, and was first introduced on November 17, 2011. The government subsequently released draft, supporting Income Tax Act amendments related to the PRPP for public commentary on December 14, 2011, which will apply to both federally and provincially regulated PRPPs. Provincial enabling legislation has not yet been introduced; the Ontario Legislative Assembly is set to resume sitting on February 21, 2012.
As announced in Budget 2011, the release of the PRPP legislation follows a joint federal-provincial initiative to move forward with a new type of broad-based privately administered pension arrangement to bridge existing gaps in the Canadian retirement system. Notably, the PRPP is intended to provide small business owners and their employees with access to large-scale, low-cost, professionally administered pension plans.
The proposed tax rules for PRPPs would apply to both federally and provincially regulated PRPPs, and would operate alongside Bill C-25.
Stakeholders and interested parties may submit comments on the package of proposed PRPP amendments before February 14, 2012.
More information about the proposed PRPP legislation is available in our FTR Now of November 23, 2011, "Pooled Registered Pension Framework Introduced."
Posted by Hicks Morley
on December 29, 2011
On December 29, 2011, the federal government announced automobile expense deduction limits and the prescribed rates for the automobile operating expense benefits that will apply in 2012.
A number of deduction limits will remain the same, including:
- the existing, $30,000 capital cost allowance ("CCA") ceiling with respect to passenger vehicles used for business purposes;
- the $800 per month limit on deductible leasing costs for leases entered into after 2011 (a separate restriction prorates deductible lease costs where the value of the vehicle exceeds the capital cost ceiling); and
- the $300 maximum allowable interest deduction for amounts borrowed to purchase an automobile, for loans related to vehicles acquired after 2011.
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Posted by Hicks Morley
on December 22, 2011
The federal government filed a regulatory amendment to the Canada Pension Plan Regulations which prescribes the manner of employee elections (or revocations) regarding the new Post-Retirement Benefit (“PRB”), which will be available under the Canada Pension Plan (“CPP”), effective January 1, 2012.
The amendment was first proposed in October of 2011, as previously reported.
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Posted by Hicks Morley
on December 21, 2011
On December 21, 2011, the Ontario government announced changes to the Pension Benefits Guarantee Fund (“PBGF”) that will become effective January 1, 2012. The enhancements to the PBGF were introduced with Phase II of Ontario’s pension reform and the passage of Bill 120, Securing Pension Benefits Now and for the Future Act, 2010, and are enacted pursuant to Regulation 466/11 under the Pension Benefits Act.
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Posted by Hicks Morley
on December 14, 2011
On December 14, 2011, the federal government released draft legislative proposals outlining proposed amendments to the Income Tax Act (“ITA”) and the Income Tax Regulations to facilitate the implementation of Pooled Registered Pension Plans (“PRPPs”) for public commentary.
The proposed amendments would incorporate PRPPs into the existing ITA regime for registered retirement savings vehicles and would provide the basic framework of income tax rules that will apply in relation to PRPPs, including the treatment of employee and employer contributions and limits on contributions made to PRPPs. The federal PRPP legislative framework is outlined in Bill C-25, An Act relating to pooled registered pension plans and making related amendments to other Acts, which, as previously reported, was introduced on November 17, 2011.
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Posted by Hicks Morley
on November 17, 2011
On November 17, 2011, the Minister of State (Finance) and the Minister of Industry announced the introduction of Bill C-25, An Act relating to pooled registered pension plans and making related amendments to other Acts, new legislation implementing the framework for the federal component of the PRPP.
The government will shortly release draft tax rules for public commentary, which will apply to both federally and provincially regulated PRPPs. Provincial enabling legislation has not yet been introduced; the new Ontario government will convene on November 21, 2011.
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Posted by Hicks Morley
on November 08, 2011
On November 8, 2011, the federal government announced a reduction in the maximum potential increase in Employment Insurance (“EI”) premium rates for 2012 from 10 cents, to 5 cents. Under these new parameters, the 2012 premium rate will not exceed $1.83 per $100 of insurable earnings.
In addition, the government announced a temporary extension of an enhancement to the Work-Sharing Program first outlined in Budget 2011. Prior to Budget 2011, the maximum duration of approved work-sharing agreements between employers and employees was between a minimum of 6 consecutive weeks and a maximum of 26 consecutive weeks, with an extension of up to 12 weeks (for a total duration of 38 weeks). The Budget 2011 temporary extension of up to 16 weeks for active or recently terminated agreements has been extended until October 2012. Accordingly, currently active work-sharing agreements could have a duration of up to 54 weeks.
Posted by Hicks Morley
on November 08, 2011
On November 2, 2011, the Ontario government announced the second window of eligibility for broader public sector (“BPS”) solvency funding relief.
As previously discussed in our FTR Now of February 11, 2011, “Solvency Funding Relief Details for Broader Public Sector Released by Ontario Government”, BPS solvency funding relief provides BPS pension plans two stages of relief (in the form of a moratorium, followed by an extended funding period) during which the relevant stakeholders are given time to make changes to their pension plans to make the plans more sustainable (i.e. contribution increases, benefit reductions).
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Posted by Hicks Morley
on November 07, 2011
The Canada Revenue Agency (“CRA”) has released the 2012 limits for pension plan and retirement savings plans:
- The 2012 annual pension for the year in which a pension commences to be paid under a Defined Benefit pension plan will be limited to $2,646.67 per year of service.
- The 2012 Money Purchase (Defined Contribution) limit will be $23,820.
- The Registered Retirement Savings Plan (“RRSP”) contribution limit in 2012 was previously announced as $22,970. In 2013, the RRSP limit will increase to $23,820.
- The Deferred Profit Sharing Plans contribution limit in 2012 is $11,910.
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Posted by Hicks Morley
on November 07, 2011
On November 4, 2011, the Standing Committee on Finance presented its Report to the House on the federal government’s omnibus Budget implementation Bill C-13, Keeping Canada’s Economy and Jobs Growing Act.
As previously reported, the Bill was introduced on October 4, 2011.
Posted by Hicks Morley
on November 03, 2011
Posted by Hicks Morley
on October 11, 2011
The federal government has proposed a regulatory amendment to the Canada Pension Plan Regulations which prescribes the manner of employee elections (or revocations) regarding the new Post-Retirement Benefit (PRB), which will be available under the Canada Pension Plan (CPP) effective January 1, 2012.
The PRB extends participation in the CPP to those employees (and self-employed workers) who are 60 years of age or older and who receive CPP benefits while continuing to work. Contributions towards the PRB will be mandatory for employees who are at least 60 years of age but under the age of 65 and their employers, and optional in respect of employees who have reached 65 years of age but who are under the age of 70. Individuals in the latter group will be required to contribute towards the PRB unless they elect to opt out.
The proposed regulatory amendment will also extend the time limit for payments of CPP contributions where an election has been made in respect of self-employed earnings.
Interested persons may make comments on the proposed regulatory text within 30 days after publication of the notice of the regulation (Canada Gazette, October 8, 2011).
Posted by Hicks Morley
on September 29, 2011
In anticipation of January 1, 2012, when new legislation related to the division of pension assets on the breakdown of a spousal relationship comes into force, the Financial Services Commission of Ontario (“FSCO”) has published a Question and Answer guide (“Q & A”) for members of the public.
As previously reported, the pension division and valuation reforms were outlined in Bill 133, the Family Statute Law Amendment Act, 2009.
Posted by Hicks Morley
on September 29, 2011
On September 7, 2011, the Office of the Superintendent of Financial Institutions set the basic rate for the Office year beginning on April 1, 2012 at $18.00, pursuant to section 25 of the Pension Benefits Standards Regulations, 1985. This rate applies to the fees paid by federally regulated pension plans with a year-end between October 1, 2011, and September 30, 2012.
Posted by Hicks Morley
on September 01, 2011
On August 30, 2011, the federal government released a paper outlining proposed tax rules governing Employee Profit Sharing Plans (“EPSPs”) for public consultation, in furtherance of initiatives first announced in its 2011 Budget.
Specifically, the government is seeking stakeholder input on the following issues:
- eligibility of non-arm’s length employees / “related persons” to participate in an EPSP;
- the role of minor children and the exclusion of EPSP allocations from the tax on split income provisions;
- limitations on employer contributions (e.g. a certain percentage of an employee’s salary or wages paid directly by the employer for the year); and
- withholding requirements for, and general tax treatment of, EPSPs.
Interested persons and stakeholders may submit comments electronically by October 25, 2011.
Posted by Hicks Morley
on August 19, 2011
On August 18, 2011, the federal government announced the launch of Employment Insurance (“EI”) rate-setting consultations, and released a related consultation paper.
The EI consultations are intended to enhance delivery of benefits, and increase overall premium stability.
Individuals and stakeholders may participate in the web-based consultation process online, or via email before November 30, 2011.
Posted by Hicks Morley
on August 17, 2011
On August 16, 2011, the Department of Finance released draft legislative and regulatory proposals to implement a number of key tax measures first introduced by the federal government in Budget 2011, the Next Phase of Canada’s Economic Action Plan—A Low-Tax Plan for Jobs and Growth.
In part, “Legislative Proposals Relating to the Income Tax Act and Related Regulations” proposes:
- anti-avoidance rules for Registered Retirement Savings Plans;
- new rules to limit tax deferral opportunities for individual pension plans by imposing minimum annual withdrawal requirements similar to those for Registered Retirement Income Funds and by reducing the tax advantages related to making contributions to an individual pension plan in respect of past service;
- a Volunteer Firefighters Tax Credit, allowing eligible volunteer firefighters to claim a 15% non-refundable tax credit based on an amount of $3,000; and
- extends the dividend stop-loss rules to dividends deemed to be received on the redemption of shares held by certain corporations.
Interested persons and stakeholders may comment upon the proposals by September 16, 2011.
For more information on Budget 2011, please see our FTR Now of June 7, 2011, “Federal Budget Reintroduced June 6, 2011”.
Posted by Hicks Morley
on July 25, 2011
The Ontario government has posted proposed content for Pension Benefits Act regulations for public review and commentary. These regulations are required before amendments to section 80.1 of that Act come into effect. Once proclaimed in force, section 80.1 of the Act will allow the administrators of certain public sector plans to negotiate agreements to give eligible employees an opportunity to consolidate their pension benefits in relation to past government-initiated restructurings.
The proposed supporting regulatory content (Transfer Agreements Under Section 80.1 of the Pension Benefits Act) elaborates on intended application, the temporary framework requirements and disclosure obligations.
Stakeholders and interested persons may comment by August 19, 2011 on this proposed content.
Posted by Hicks Morley
on June 29, 2011
On June 24, 2011, the Ontario government filed long-anticipated regulations in support of amendments to the Pension Benefits Act effected by Bill 133, the Family Statute Law Amendment Act, 2009.
O. Reg. 287/11 (Family Law Matters) follows the previously reported March 2011 release of draft regulations and a related Consultation Paper, and reflects that consultation process by making significant changes to the earlier draft regulations.
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Posted by Hicks Morley
on June 21, 2011
The Financial Services Commission of Ontario (“FSCO”) released its Guidance Note (PDF) with respect to how it expects plans to apply the revised Canadian Institute of Actuaries’ (“CIA”) Practice-Specific Standards for Pension Plans (the “Standards”).
The Guidance Note expressly states that the application of some of the CIA revisions to the Standards, which became effective on December 31, 2010, may result in the use of assumptions which FSCO would not consider “appropriate” for an actuarial valuation report filed under the Pensions Benefits Act and applicable regulations.
In light of FSCO’s enhanced powers to reject a valuation where it does not agree with the assumptions used regardless of whether the assumptions are consistent with accepted actuarial standards, this Guidance Note, while not of legislative force, is particularly important.
The Guidance Note follows the release of a previous consultation paper and submissions, which are available here.
Posted by Hicks Morley
on June 09, 2011
On June 3, 2011, the Ontario government filed two regulations under the Pension Benefits Act.
O. Reg. 195/11 amends General Regulation 909 by creating a new section, “Designated Jurisdictions and Agreements with Designated Jurisdictions”, and a Table listing multi-jurisdictional agreements entered into under section 100 of the Act, and the date on which the agreement comes into effect in Ontario. This regulation comes into force on July 1, 2011. As previously reported, Ontario has entered into one such agreement, effective July 1, 2011, with Quebec.
O. Reg. 196/11, “AbiBow Canada Inc. Pension Plans”, implements certain agreements involving Ontario, Quebec and AbiBow Canada Inc., relating to the Ontario pension plans listed in Schedule 1 and the Quebec pension plans listed in Schedule 2 to the regulation, providing for the aggregate funding of those plans. This regulation, which stems from Abitibi and Bowater’s filing under the Companies’ Creditors Arrangements Act, is now in force.
Posted by Hicks Morley
on May 31, 2011
June 1, 2011 has been named as the day on which subsections 1 (9) and 3 (3) and section 16 of Bill 120, the Securing Pension Benefits Now and for the Future Act, 2010, come into force.
These provisions relate to the recently reported filing of O. Reg. 177/11, and specifically, the change affecting jointly-sponsored pension plans ("JSPPs"), such that they are no longer required to make contributions in respect of solvency deficiencies (in the case of JSPPs in existence on August 24, 2010).
More information about O. Reg. 177/11 is available in our FTR Now of Friday, May 27, 2011, "Ontario Pension Funding and JSPP Regulations Released”.
Posted by Hicks Morley
on May 26, 2011
On May 20, 2011, the Ontario government filed two new regulations under the Pension Benefits Act.
O. Reg. 177/11 contains several amendments to the Pension Benefits Act General Regulation 909 ("Regulations”) relating to measures first introduced by the government when it tabled Bill 120, Securing Pension Benefits Now and for the Future Act, 2010, which was previously reported here.
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Posted by Hicks Morley
on May 21, 2011
On May 20, 2011, the Ontario government announced that it has signed the Agreement Respecting Multi-Jurisdictional Pension Plans (the “MJPPA”) (PDF) with the government of Quebec. The MJPPA will be effective July 1, 2011 for multi-jurisdictional pension plans where the “major authority” (province of registration) is Ontario or Quebec, and the pension plans have Ontario and Quebec plan members.
The MJPPA establishes an efficient and transparent regulatory environment for multi-jurisdictional pension plans. It specifies the rules that apply to these plans and allows, to the extent provided for in the MJPPA, a single pension supervisory authority to exercise all of the supervisory and regulatory powers relevant to these pension plans. The MJPPA sets out the rules governing which province’s pension legislation applies to these plans and their members in a wide range of circumstances.
As previously reported, technical amendments to the Pension Benefits Act came into force on October 1, 2010, specifically authorizing the government to enter into similar MJPPAs with other designated jurisdictions with similar pension legislation.
It is anticipated that all governments will sign the MJPPA in the near future.
Posted by Hicks Morley
on April 21, 2011
Effective April 1, 2011 and July 1, 2011, certain sections of the federal Jobs and Economic Growth Act (Bill C-9) and the Pension Benefits Standards Act, 1985 (“PBSA”) come into force.
As previously reported, amendments to the PBSA which were brought into force effective April 1, 2011 include provisions:
- permitting plan sponsors to secure letters of credit in lieu of making solvency payments to the pension plan;
- affecting the requirements on plan termination, which include requiring plan sponsors to fully fund pension benefits on plan termination; and
- implementing the distressed pension plan workout scheme (which provides a framework for parties of a distressed pension plan to negotiate an alternative funding schedule for the plan in order to provide an opportunity for the restructuring of the employer, the plan or both).
The PBSA amendments are supported by the April 1, 2011 implementation of the Regulations Amending Certain Regulations Made Under the Pension Benefits Standards Act, 1985 which provide the necessary details for these provisions. In addition, amendments to the PBSA effective April 1, 2011 include a number of the enhanced disclosure requirements.
Amendments to the PBSA which will now come into force effective July 1, 2011 include the entitlement to immediate vesting of pension benefits and minimum standards changes to the PBSA provisions regarding locking-in, minimum pension benefit credit (the 50% rule) and pre-retirement death.
As previously reported, Bill C-9 was introduced on March 29, 2010 and is omnibus legislation that amends various Acts to implement certain key measures outlined in the federal government’s 2010 Budget.
For more information about these amendments, please see our FTR Now of April 4, 2011, “A Roadmap to Federal Pension Reform”.
Posted by Hicks Morley
on March 30, 2011
On March 25, 2011, the Ontario government filed two regulations amending General Regulation 909 under the Pension Benefits Act:
- O. Reg. 84/11, dealing with the deadlines for solvency valuations and related payments for certain plans in the public sector and broader public sector; and
- O. Reg. 85/11, providing for the adoption of the federal investment regulations, as amended from time to time.
The regulations are now in force.
Posted by Hicks Morley
on March 25, 2011
On April 1, 2011, regulatory amendments to the Pension Benefits Standards Regulations, 1985 will come into force. These amendments support the changes to the Pension Benefits Standards Act, 1985 (PBSA) made by Bill C-9, which is discussed here.
As previously reported, these amendments will:
- permit plan sponsors to secure properly structured letters of credit in lieu of making solvency payments to the pension fund, up to a limit of 15% of plan assets;
- require the plan sponsor to fully fund pension benefits on plan termination;
- void any amendments to a pension plan that would reduce the solvency ratio of the pension plan if the plan’s solvency ratio would be below a ratio of 0.85; and
- permit sponsors, plan members and retirees of a distressed pension plan to negotiate their own funding arrangements to facilitate a plan restructuring.
Further amendments to the Pension Benefits Standards Regulations, 1985 are required to support additional amendments to the PBSA made in Bill C-47, which is discussed here.
Posted by Hicks Morley
on March 21, 2011
On March 17, 2011, the Québec government tabled its 2011-2012 Budget. The Budget proposed, among other things, to strengthen Québec’s retirement income system by:
- making adjustments to the Québec Pension Plan, as of January 1, 2012, to guarantee a new basic income to Québecers at retirement; and
- undertaking to implement new Voluntary Retirement Savings Plans (VRSPs) with required enrolment to foster the savings of Québecers who do not have access to workplace pension plans (employees will be able to opt out of the VRSPs).
For more information on the VRSPs initiative, see the corresponding News Item on our website.
Posted by Hicks Morley
on March 04, 2011
On March 3, 2011, the Ontario government posted draft regulations under Bill 133, the Family Statute Law Amendment Act, 2009, and a related Consultation Paper for public review and comment.
Among other family law-related matters, Bill 133 amends the Pension Benefits Act and creates new rules governing both:
(1) the valuation of pension assets by plan administrators for family law purposes; and
(2) the immediate settlement of the former spouse’s entitlement, either through a lump sum transfer if the marriage breakdown occurs prior to retirement or division of the pension in pay, where there is a court order, family arbitration award or domestic contract awarding a payout from the pension.
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Posted by Hicks Morley
on February 11, 2011
On February 10, 2011, the Ontario government released its proposed details regarding solvency funding relief for the public sector and broader public sector (“BPS”).
The government first announced that it would consider providing solvency funding relief for university pension plans on August 5, 2010 (which was consistent with the 2010 Budget announcement that solvency funding relief may be provided to BPS employers). The goal of the solvency funding relief is to support sustainable public sector and BPS defined benefit or hybrid pension plans, including Ontario university pension plans.
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Posted by Hicks Morley
on January 05, 2011
On January 1, 2011, Regulations Amending the Canada Pension Plan Regulations came into force (SOR/2010-300). The regulations implement the legislative amendments in the Economic Recovery Act (stimulus) (which received Royal Assent on December 15, 2009) and are intended to restore and enhance the actuarial adjustments made to Canada Pension Plan retirement pensions taken before and after age 65 to their actuarially fair values. They set out a plan to implement those adjustments over a number of years.
Posted by Hicks Morley
on December 21, 2010
On December 15, 2010, the Financial Services Commission of Ontario (“FSCO”) posted a draft consultation policy (the “policy”) regarding the management of inquiries and complaints by plan administrators. FSCO also posted a draft consultation guideline for developing a written policy (the “guideline”) on managing inquiries and complaints from plan beneficiaries for public review and commentary.
The guideline provides plan administrators with key items to consider when drafting policies for the effective management of inquiries and complaints, including:
- the identification of participants and responsibilities;
- development of processes and procedures; and
- the timing and content of communications.
Interested stakeholders are invited to make submissions regarding both the policy and the guideline by February 11, 2011.
Posted by Hicks Morley
on December 16, 2010
On December 15, 2010, Bill C-47, the Sustaining Canada’s Economic Recovery Act, received Royal Assent. The Bill is omnibus legislation and addresses numerous measures of interest to employers, including:
- changes to harmonize the Superintendent of Financial Institutions’ ability to collect pension fees from employers; and
- reforms to the Pension Benefits Standards Act, 1985 to designate an entity to receive pension benefit credit due to un-located pension plan beneficiaries, to create a "safe harbour" for administrators who offer investment options meeting certain criteria in respect of member-directed defined contribution pension plans, to address electronic communications with pension plan beneficiaries and to require consent of a member’s spouse or common-law partner before the transfer of a member’s pension benefits to a retirement savings plan.
The Bill should be consulted for specific coming into force information.
Posted by Hicks Morley
on December 16, 2010
On Tuesday, December 14, 2010, the federal government proposed a number of regulatory amendments to the Pension Benefits Standards Regulations, 1985 for public commentary.
The proposed amendments are designed to increase protection of plan members and retirees and would, in part:
- permit plan sponsors to secure properly structured letters of credit in lieu of making solvency payments to the pension fund, up to a limit of 15% of plan assets;
- require plan sponsors to fully fund pension benefits on plan termination;
- void any amendments to a pension plan that would reduce the solvency ratio of the pension plan if the plan’s solvency ratio is below 0.85 or the amendment causes the solvency ratio to fall below 0.85; and
- introduce a distressed pension plan “workout scheme”.
The amendments will be published in the Canada Gazette on December 18, 2010. At that time, interested persons and stakeholders may make representations on the proposed amendments within 30 days, prior to final consideration by the government.
Posted by Hicks Morley
on December 09, 2010
On December 8, 2010, Bill 120, the Securing Pension Benefits Now and for the Future Act, 2010, received Royal Assent.
As previously reported, the Bill passed at Third Reading on December 7, 2010 after being amended by the Standing Committee on Finance and Economic Affairs under an accelerated schedule for consideration and debate.
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Posted by Hicks Morley
on December 07, 2010
On Tuesday, December 7, 2010, the Ontario government passed Bill 120, the Securing Pension Benefits Now and for the Future Act, 2010.
As previously reported, Bill 120 was amended by the Standing Committee on Finance and Economic Affairs and ordered for Third Reading on December 1, 2010 under an accelerated schedule for consideration and debate.
While certain amendments will come into force on Royal Assent, the Bill should be consulted for specific coming into force information.
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Posted by Hicks Morley
on December 02, 2010
In accordance with the terms of a special time allocation motion that was passed on November 3, 2010, Bill 120, the Securing Pension Benefits Now and for the Future Act, 2010, was reported to the House as amended by the Standing Committee on Finance and Economic Affairs and ordered for Third Reading on December 1, 2010.
The Bill is expected to be debated at Third Reading on December 2, 2010, and to pass shortly thereafter.
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Posted by Hicks Morley
on November 09, 2010
On November 3, 2010, the Ontario government passed a special time allocation motion setting out an accelerated timetable for the full consideration and debate of Bill 120, the Securing Pension Benefits Now and for the Future Act, 2010, by December 2, 2010.
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Posted by Hicks Morley
on November 01, 2010
On October 29, 2010, the Ontario government released a paper, "Securing our Retirement Future: Consulting with Ontarians on Canada's Retirement Income System", for public discussion, and reiterated its intention to amend the Pension Benefits Act in respect of employment-based defined benefit plans, among other matters.
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Posted by Hicks Morley
on October 19, 2010
Posted by Hicks Morley
on October 01, 2010
On September 30, 2010, the federal government introduced Bill C-47, the Sustaining Canada’s Economic Recovery Act.
As outlined in the government announcement, Bill C-47 is omnibus legislation and addresses numerous measures of interest to employers including:
- income tax reforms relating to stock option plans and employee life and health trusts as outlined in the March 2010 Budget previously reported on August 30, 2010; and
- reforms to the Pension Benefits Standards Act to satisfy benefit payments due to un-located pension plan beneficiaries, to create a "safe harbour" for member-directed defined contribution pension plan investments meeting certain criteria, and to address electronic communications with pension plan beneficiaries.
Hicks Morley is reviewing Bill C-47 and will be publishing a more detailed analysis of these reforms on our website.
Posted by Hicks Morley
on September 30, 2010
On September 30, 2010, the federal government announced plans to limit the Employment Insurance (“EI”) maximum premium rate increase for 2011 to five cents per $100 of insurable earnings, and ten cents per $100 of insurable earnings for subsequent years.
The rate increase is set by the Canada Employment Insurance Financing Board, which by November 14, 2010, could have raised premiums by the full legislative limit of 15 cents. However, with this announcement, the employee rate per $100 of insurable earnings can rise to no higher than $1.78, starting January 1, 2011, from the current rate of $1.73.
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Posted by Hicks Morley
on September 23, 2010
The Financial Services Commission of Ontario (“FSCO”) updated its long-running online “FAQ” for pension plan administrators to set out FSCO’s position on surplus distribution on full or partial plan wind ups in light of recent amendments to the Pension Benefits Act.
A detailed discussion of the FAQ and FSCO's position on this point is available on our website.
Posted by Hicks Morley
on September 20, 2010
On September 17, 2010, the Ontario government filed O. Reg. 367/10 under the Pension Benefits Act, amending Reg. 909 of R.R.O. 1990 (General).
The amendments extend certain filing deadlines and funding schedules under the temporary solvency funding relief regulations for two university-sponsored pension plans.
By way of background, Ontario’s temporary solvency funding relief regulations were enacted in June 2009. For more information, please see Hicks Morley’s FTR Now, Solvency Funding Relief is Here.
The amendments are now in force.
Posted by Hicks Morley
on September 14, 2010
On October 1, 2010, amendments to the Pension Benefits Act and Financial Services Commission of Ontario Act, 1997, set out in Bill 16, the Foundation for Jobs and Growth Act, 2010, will come into force.
These Bill 16 amendments permit the Ontario government and the pension regulator to enter into agreements with other designated provincial pension regulators regarding the governance and regulation of multi-jurisdictional pension plans (“MJPPs”).
The amendments greatly expand the scope of the powers and duties of the pension regulator and the use of such agreements in the operation of MJPPs.
The amendments are supported by the previously reported new general pension regulation amendments filed on September 8, 2010, O. Reg. 342/10, which will also come into force on October 1, 2010.
Posted by Hicks Morley
on September 09, 2010
On September 8, 2010, the Ontario government published O. Reg. 342/10 (General) under the Pension Benefits Act, amending Reg. 909 of R.R.O. 1990.
The amendments authorize the Ontario government and the pension regulator to enter into reciprocal agreements with designated jurisdictions providing for the orderly regulation of multi-jurisdictional pension plans.
O. Reg. 342/10 will come into force on October 1, 2010.
Posted by Hicks Morley
on August 30, 2010
The Department of Finance released draft legislative proposals in July and August of 2010 to implement a variety of tax measures, including those first outlined in its 2010 Budget along with several previously announced tax initiatives, for public consultation.
The proposals outline significant changes to the tax rules applicable to employee stock options that will:
- alter the deductions available when stock option rights are paid out in cash instead of exercised for shares;
- alter the treatment of underwater options in certain circumstances; and
- eliminate the taxable benefit deferral on the exercise of options to acquire public company shares after March 4, 2010.
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Posted by Hicks Morley
on August 24, 2010
On August 24, 2010, the Ontario government announced that further pension reforms to be tabled this fall will address almost 40 recommendations made by the Expert Commission on Pensions.
The announcement indicates that this “broad package of pension reforms” will include:
- modifications to the funding requirements for multi-employer pension plans and jointly sponsored pension plans, including the establishment of a framework for “target benefit” plans of these types;
- requirements for sustainable funding of promised benefits;
- tougher funding standards for benefit improvements, especially where plans are underfunded;
- clarified pension surplus rules, providing a dispute resolution process to allow members, retirees and sponsors to reach agreements on how surplus should be shared on wind up; and
- the implementation of a strategy to build Ontario's Pension Benefits Guarantee Fund reserves, increase revenues, limit current exposure and reduce risk to taxpayers in the future.
The proposed legislation will also include a number of measures intended to modernize the Ontario pension system, including allowing the use of letters of credit, the introduction of flexible Defined Benefit plans and the payment of variable benefits from Defined Contribution plans.
To learn more about the Expert Commission’s Report, please see our November 20, 2008 FTR Now, Ontario Expert Commission on Pensions Releases Report. Our Pension and Benefits Group will review the government announcement and will soon be posting a news item on Hicks Morley’s website.
Posted by Hicks Morley
on August 05, 2010
On August 5, 2010, the Ontario government announced that it will provide universities with temporary solvency funding relief.
The temporary funding relief will be provided through two stages: a temporary period during which each university must develop a sustainability plan for its pension plans and, if the sustainability plan is acceptable to the government, an extended amortization period for funding their solvency deficiencies.
Amendments to the Pension Benefits Act regulations will be required in order to give effect to the promised relief.
More information regarding the announcement is available on our website.
Posted by Hicks Morley
on July 16, 2010
The Financial Services Commission of Ontario (“FSCO”) issued a records retention policy for pension plan administrators effective July 9, 2010.
The policy is intended to provide guidance for “prudent records management and retention practices” relating to Ontario-registered pension plans. The policy was approved and issued following the introduction of a draft policy last year and a public consultation period.
A detailed discussion of the new policy is available on our website.
Posted by Hicks Morley
on July 13, 2010
On Monday, July 12, 2010, Bill C-9, the Jobs And Economic Growth Act, received Royal Assent.
As previously reported, Bill C-9 was introduced on March 29, 2010 and is omnibus legislation that amends various Acts to implement certain key measures outlined in the federal government’s 2010 Budget.
Amendments to the Pension Benefits Standards Act (“PBSA”) setting out new solvency funding rules for federally-registered defined benefit plans are now in force (associated regulations were released on June 25, 2010).
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Posted by Hicks Morley
on June 25, 2010
On June 25, 2010, the federal government released final regulations amending the Pension Benefits Standards Regulations, 1985.
The regulations follow the publication of previously reported draft regulations on May 8, 2010, and are intended to enhance protections for private pension plan members by reducing funding volatility and modernizing the rules for investments by pension funds.
The amendments include:
- a new standard that uses average solvency ratios to determine minimum funding requirements;
- limiting contribution holidays unless the solvency ratio exceeds full funding plus a new solvency margin (5% of solvency liabilities); and
- a modernized investment framework that removes the limits on the amounts pension plans can invest in resource and real property investments.
The government has indicated that further regulatory changes will be implemented later in the coming months as part of its ongoing initiative to modernize the federal pension framework.
Posted by Hicks Morley
on May 19, 2010
On May 19, 2010, the Department of Finance released proposed changes to the Harmonized Sales Tax (“HST”) rules covering the supply of financial services relating to the calculation of the provincial component of the HST under the Excise Tax Act.
As outlined in the government Backgrounder, the proposed changes would affect, among others, mutual funds, pension plans, DPSPs, RCAs, health and welfare trusts, supplementary unemployment benefit plan trusts, and other employee benefit plans.
The proposal also includes consequential changes flowing from the new Input Tax Credit calculation method for registered pension plans introduced in Bill C-9, which we discussed in our FTR Now of April 5, 2010.
Comments on the proposals may be submitted by interested parties by June 9, 2010 to ConsultationsFI-IF@fin.gc.ca.
Posted by Hicks Morley
on May 18, 2010
On May 18, 2010, Bill 236, the Pension Benefits Amendment Act, 2010 received Royal Assent. A number of the Bill 236 amendments are now in force, while others will come into force later this year. Supporting regulations are also expected to be introduced. As previously reported, Bill 236 carried at Third Reading on May 5, 2010 after being reported as amended by the Standing Committee on Finance and Economic Affairs, following a series of amendments.
Our FTR Now of December 15, 2009 provides a summary of this significant new legislation, which followed on the heels of the Report of the Ontario Expert Commission on Pensions, and marks the beginning of a multi-stage pension reform process designed to modernize Ontario’s pension system. The second stage of the modernization process is slated to be introduced later in 2010, and is anticipated to include changes applicable to the funding and investment of pension plans.
Our most recent Bill 236 FTR Now of May 19, 2010 provides a roadmap of actions that now need to be taken by plan administrators and sponsors.
Posted by Hicks Morley
on May 13, 2010
On May 13, 2010, Bill 54, the Retirement Savings Plans for Employees and Self-Employed Persons Act, 2010 was referred to the Standing Committee on Finance and Economic Affairs. Bill 54 is a Private Member's Public Bill, first introduced on May 5, 2010. As outlined in our FAQ section, historically, very few Private Member Bills progress beyond the Committee stage to Third Reading or receive Royal Assent. It is therefore unlikely to become law.
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Posted by Hicks Morley
on May 08, 2010
On May, 8, 2010, the Federal government published proposed amendments to the Pension Benefits Standards Regulations, 1985.
The proposed amendments would:
- amend the funding rules to adopt a new standard for establishing minimum funding requirements on a solvency basis using average (rather than current) solvency ratios to determine minimum funding requirements;
- introduce a solvency margin precluding sponsors from taking contribution holidays unless the solvency ratio exceeds full funding plus the set margin of solvency liabilities (5%); and
- remove the 5%, 15%, and 25% quantitative investment limits in respect of resource and real property investments.
Posted by Hicks Morley
on May 05, 2010
On May 5, 2010, Bill 236, the Pension Benefits Amendment Act, 2010 carried at Third Reading, and is expected to receive Royal Assent. Bill 236 was reported as amended by the Standing Committee on Finance and Economic Affairs on April 19, 2010.
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