Regulatory Initiative: Regulations Amending the Pension Benefits Standards Regulations, 1985 (Negotiated Contribution Plans) and Regulations Amending the Pension Benefits Standards Regulations (Persons who Cannot be Located) – Forward Regulatory Plan 2023-2025

Regulations Amending the Pensions Benefits Standards Regulations, 1985 (Negotiated Contribution Plans) and Regulations Amending the Pension Benefits Standards Regulations (Persons who Cannot be Located)

Pension Benefits Standards Act, 1985

The Budget Implementation Act, 2021, No. 1 amended the Pension Benefit Standards Act, 1985 (PBSA) to establish a revised framework for negotiated contribution (NC) pension plans to strengthen plan governance, transparency, and sustainability of benefits. The proposed amendments to the Pension Benefits Standards Regulations, 1985 (PBSR) would operationalize the framework by removing solvency funding requirements and introducing enhanced funding requirements for negotiated contribution plans.  The amendments would also prescribe the going concern funding threshold for benefit improvements and the elements required in the funding and governance policies.

In addition, the Budget Implementation Act, 2021, No. 1 also clarified the PBSA provisions regarding the unclaimed pension balances of unlocatable individuals. The proposed amendments to the PBSR will help operationalize the unclaimed pension balances framework by prescribing the information the plan administrator must provide to the designated entity when transferring unclaimed pension assets as well as the information the designated entity may publish related to the unclaimed pension assets.  The amendments also specify the eligible claimants and prescribe the period of time before the unclaimed pension assets are transferred to the Crown.

The proposed amendments are not part of a formal regulatory cooperation initiative, but would align with certain provincial regulations that have exempted NC-type plans from solvency funding requirements and/or have frameworks to address unclaimed pension balances.

The proposed amendments would not impose significant costs on pension plan sponsors, administrators, members or retirees.

The proposed amendments were pre-published on June 24, 2023, for a 30-day comment period through the Canada Gazette, Part I: Vol. 157 (2023), number 25, page 2325.

Kathleen Wrye
Director, Pensions Policy
Financial Sector Policy Branch
Department of Finance Canada
90 Elgin St.
Ottawa, Ontario K1A 0G5
Email: Kathleen.Wrye@fin.gc.ca

November 2021