Government launches consultations on strengthening federally regulated pension plans
November 6, 2020 - Ottawa, Ontario - Department of Finance Canada
The Government of Canada is committed to supporting a secure and dignified retirement for Canadians by improving Canada’s retirement income system. Part of that commitment is to promote the efficient funding of federally regulated pension plans and ensure pension benefit security for plan members and retirees.
Today, the Department of Finance Canada released a consultation paper on potential solvency funding relief options for 2021 and measures to further strengthen the framework for federally regulated pension plans, as committed to in Budget 2019. About seven percent of private pension plans in Canada are federally regulated, such as those in federally regulated industries like banking, telecommunications, and inter-provincial transportation. The release of the paper and the launch of public consultations mark the next step in the government’s ongoing work to enhance Canadians’ retirement security.
Through this consultation, the government seeks to learn more about Canadians’ and stakeholders’ views on the following subjects:
- Potential options for temporary broad-based solvency funding relief in 2021
- Measures to strengthen pension plan governance and administration
- Solvency reserve accounts
- Variable payment life annuities
- Ministerial guidelines on special funding relief.
Individuals or organizations interested in submitting their views are invited to review the consultation document at the link below. Submissions are requested on or before January 14, 2021, via email to FIN.Pensions-Pensions.FIN@canada.ca.
Consultation submissions can also be mailed to:
Financial Crimes and Security Division
Financial Sector Policy Branch
Department of Finance Canada
90 Elgin Street
As part of the Government of Canada’s COVID-19 economic response plan, the Government enacted a temporary moratorium on solvency special payments for federally regulated defined benefit pension plans from April 1, 2020, to December 30, 2020. The Solvency Special Payment Relief Regulations, 2020 came into force on May 27, 2020.
In Budget 2019, the government announced a number of measures aimed at enhancing the security of workplace pension in the event of corporate insolvency. In addition, the government committed to continue to engage with Canadians on further ways to support the sustainability of defined benefit plans.
Federal pension law reforms since 2009 aim to enhance protections for plan members and retirees and reduce funding volatility for employers. The federal framework for private pension plans continually strives to strike an appropriate balance between financial flexibility for plan sponsors and benefit security for members and retirees.
The federal Pension Benefits Standards Act, 1985 (PBSA) governs private pension plans linked to federally regulated areas of employment, such as banking, telecommunications, inter-provincial transportation, and navigation and shipping, as well as private sector employment in Yukon, the Northwest Territories and Nunavut, and employment at certain federal Crown corporations.
Media may contact:
Department of Finance Canada
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