Nova Scotia enters new agreement on multi-jurisdictional pension plans
Nova Scotia has entered into a new 2016 Agreement Respecting Multi-Jurisdictional Pension Plans that will continue to protect member entitlements and streamline regulation of pension plans.
The agreement between Nova Scotia, British Columbia, Ontario, Quebec and Saskatchewan is intended to take effect July 1, 2016. The 2016 Agreement replaces the 1968 Memorandum of Reciprocal Agreement (1968 Agreement) with respect to the above-mentioned provinces. The 1968 Agreement continues to apply between Nova Scotia and the remaining provinces.
Multi-jurisdictional pension plans are employment-based pension plans with members in more than one Canadian jurisdiction, whether provincial or federal. These plans are often sponsored by larger employers and unions that operate in several jurisdictions.
The 2016 Agreement was developed by The Canadian Association of Pension Supervisory Authorities (CAPSA) to provide a clear legal framework for the administration and regulation of multi-jurisdictional pension plans. It includes rules on how plan assets are to be distributed among jurisdictions if a multi-jurisdictional plan terminates with insufficient assets. Participation in the agreement is important to provide greater security and certainty to Nova Scotians who are members of pension plans registered elsewhere in Canada.
Nova Scotia brought into force the necessary legislative changes to sign the 2016 Agreement on June 1, 2015, when the new Pension Benefits Act was proclaimed.
For more information about the agreement, visit: CAPSA release.
New Pension Benefits Act comes into force June 1, 2015
A summary of provisions in the new Pension Benefits Regulations. Please note this document is intended to provide guidance.
On April 21, 2015, the Pension Benefits Regulations were approved by the Lieutenant Governor. The Regulations support the new Pension Benefits Act which was passed by the legislative assembly in 2011 and proclaimed to be in effect June 1, 2015.
The new Act is available online at http://nslegislature.ca/legc/PDFs/annual%20statutes/2011/c041.pdf. The Regulations are online at http://novascotia.ca/just/regulations/rxam-z.htm#penben.
Fees under the new Pension Benefits Act have been established. The Pension Benefits Fee Regulations take will take effect on June 1, 2015 and can be viewed here.
Factors to consider in the implementation of the new Act and Regulations follow:
- Amendments for compliance – all plans: An amendment to the plan text to reflect the new required plan provisions must be filed before June 1, 2018. Although the plan text amendments are not required immediately, the plan must be administered to reflect the new legislative requirements from June 1, 2015 forward.
- Disclosure: The new information to be provided on the annual statements to active members apply to statements issued in respect of plan years ending after June 1, 2015.
- Information to trustees: The summary of contributions must be given to the fund trustees no later than 60 days after the beginning of the plan's fiscal year. Note that there is no requirement for a summary of contributions to be provided in respect of a multi-employer pension plan.
- Changes to LIRAs and LIFs: The changes to LIRAs and LIFs apply from June 1, 2015 onwards. Copies of the new Schedule for the LIRA and the revised Schedule for the LIF should be sent to all LIRA and LIF owners with the next statement of account that is sent to them.
- Filing audited financial statements: Audited financial statements for a pension fund must be filed no later than 6 months after the end of the plan's fiscal year. This requirement does not apply if the market value of the plan's assets is less than $5,000,000, or if all of the plan's assets are held by 1 insurance company or in pooled funds provided by a single trust company and the pooled funds are audited. However, a multi-employer pension plan must file audited financial statements, without exception.
- Requirements for filing annual valuations: Annual filing of a valuation report and actuarial information summary are required for defined benefit pension plans if a valuation report prepared as at a date after June 1, 2015 indicates solvency concerns. Solvency concerns exist if the ratio of the solvency assets to the solvency liabilities is less than 0.85.This does not apply to designated pension plans or an individual pension plan.
- Provisions of new Act not proclaimed into force – provisions relating to target benefit plans, the provisions found in subsections 24(2) and (3) relating to void amendments, and section 111 relating to the Companies' Creditors Arrangement Act.
Please contact the Pension Regulation Division if you have any questions regarding the new Act and Regulations. E-mails can be sent to novascotia.ca.