On January 9, the federal government released a discussion paper on improving the framework for federally regulated private pension plans. These plans currently represent seven per cent of all private pension plans in Canada, accounting for approximately 12 per cent of pension assets.
“The government acted in the Economic and Fiscal Statement to provide temporary solvency relief to federally regulated pension plans that have been affected by the substantial declines in equity markets,” said Jim Flaherty, minister of finance, in releasing the paper. “The purpose of this paper is to get the views of Canadians on issues related to the legislative framework for federally regulated defined benefit and defined contribution pension plans with the objective of making permanent changes in 2009.”
The federal government regulates private pension plans that are subject to the Pension Benefits Standards Act, 1985. These plans cover areas of employment under federal jurisdiction, including banking, telecommunications, and inter-provincial transportation.
The discussion paper, entitled Strengthening the Legislative and Regulatory Framework for Private Pension Plans Subject to the Pension Benefits Standards Act, 1985, can be viewed on the Department of Finance website at www.fin.gc.ca/activty/consult/pensions-eng.asp#background. The department welcomes the views of Canadians on this issue. On-line submissions can be addressed to firstname.lastname@example.org and will be accepted until midnight, March 16, 2009.
According to a bulletin from law firm Blake, Cassels & Graydon LLP, the discussion paper covers both defined benefit and defined contribution plans, and also raises issues pertaining to multi-employer pension plans and other elements of the pension framework. In addition, says Blakes, the paper seeks to canvass the ideas of interested parties on the investment regulations applicable to federally regulated plans. Blakes note that this last component will be of interest not only to the sponsors and administrators of federally regulated pension plans but also to the sponsors and administrators of provincially regulated plans in those common-law provinces that have adopted the federal investment regulations.
The federal government plans to hold a series of national consultation meetings will begin in March, with details to be announced in the coming weeks.
Flaherty said the government will also consult with provinces and territories, which also regulate pension plans. To this end, a federal-provincial working group of senior officials has been established to discuss pension issues, which will provide opportunities for information sharing.
For more information, visit www.fin.gc.ca/activty/consult/pensions-eng.asp#background.
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