Regulatory Initiative: Regulations Amending the Pension Benefits Standards Regulations, 1985 and the Pooled Registered Pension Plans Regulations (In-Plan Unlocking and Buy-out Annuities) – Forward Regulatory Plan 2023-2025

Title or working title of the regulatory initiative:

Regulations Amending the Pension Benefits Standards Regulations, 1985 and the Pooled Registered Pension Plans Regulations (In-Plan Unlocking and Buy-out Annuities)

Enabling acts:

Pension Benefits Standards Act, 1985, Pooled Registered Pension Plans Act

Description of the objective:

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 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.

Public consultation opportunities:

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:

July 2020