Regulations Amending the Pension Benefits Standards Regulations, 1985 and the Pooled Registered Pension Plans Regulations
Enabling Act: Pension Benefits Standards Act, 1985, Pooled Registered Pension Plans Act
Description
The Pension Benefits Standards Regulations, 1985 (PBSR) allow members over the age of 55 to ‘unlock’ up to 50 per cent of their locked-in pension funds on a one-time basis through a transfer to a Restricted Life Income Fund. The proposed amendments would provide DC plan members who choose to receive variable benefits (if offered by their plan) with the same flexibility and options to manage their income in retirement as members who choose to transfer their pension benefits from DC plans to locked-in retirement savings vehicles.
In addition, the Budget Implementation Act, 2019, No. 1, amended the Pension Benefits Standards Act, 1985 (PBSA) to allow defined benefit (DB) plans to fully transfer the responsibility to provide pensions to retirees to a regulated life insurance company through the purchase of annuities (i.e., ‘buy-out’ annuities). The proposed amendments to the PBSR would enable the PBSA changes to come into force by prescribing the types of annuities that plan administrators may purchase in order to transfer pension obligations to a life insurance company and setting disclosure requirements for plan administrators to ensure that former member and survivors for whom buy-out annuities have been purchased are properly notified.
The proposed amendments would also clarify how bridging benefits must be provided and administered by pension plans and make minor technical changes to the PBSR and Pooled Registered Pension Plans Regulations.
Potential Impacts on Canadians, including Businesses
The proposed amendments would not impose any significant costs on pension plan sponsors, administrators, members or retirees.
Consultations
The 30-day pre-publication comment period through the Canada Gazette, Part I will provide an opportunity for stakeholders to comment on the proposed amendments.
Departmental Contact Information
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
Date Regulatory Initiative First Included in Forward Regulatory Plan: July 2020
Regulations Amending the Pensions Benefits Standards Regulations, 1985
Pension Benefits Standards Act, 1985
Description
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 going concern 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.
Regulatory cooperation efforts (domestic and international)
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.
Potential impacts on Canadians, including businesses
The proposed amendments would not impose any significant costs on pension plan sponsors, administrators, members or retirees.
Consultations
The 30-day pre-publication comment period through the Canada Gazette, Part I will provide an opportunity for stakeholders to comment on the proposed amendments.
Departmental Contact Information
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
Date the regulatory initiative was first included in the Forward Regulatory Plan: November 2021
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