Amendments to the new Pension Benefits Standard Act clarify elements of the original act and help ensure the legislation will be ready for proclamation later this year, Finance Minister Michael de Jong announced today.
Today's amendments are primarily technical corrections, including:
- A new provision that clarifies a pension plan is not liable after transferring responsibility for pensions to a regulated insurance company, as long as specific conditions are met.
- Enabling the spouse of a deceased pension plan member to designate a beneficiary for the surviving spouse's benefits.
- Providing that a former participating employer who fails to provide required information to the plan administrator may be compelled to comply by court order.
- Clarifying that member consent required for distribution of actuarial excess or surplus does not apply to withdrawals from a solvency reserve account.
The modernized Pension Benefits Standard Act was passed by the B.C. Legislature on May 31, 2012, and included:
- Reducing administrative costs.
- Enhancing the rights of pension plan members, including immediate entitlement to employer-paid contributions and more information about how a plan is operating and extending the same right to retired members.
- Establishing a framework to give former pension plan members the option of withdrawing "locked-in" funds in a Registered Retirement Savings Plan or life income fund in cases of financial hardship.
- Permitting innovative alternatives to existing plans, such as jointly sponsored cost-sharing pension plans and target benefit plans.
- Requiring other governance policies, and providing additional powers to the superintendent of pensions.
On Nov. 20, 2012, Alberta enacted parallel legislation as the Employment Pension Plans Act. The new PBSA represents B.C.'s joint commitment with Alberta to create harmonized pension standards legislation that adopts many of the recommendations in the 2008 Report of the B.C./Alberta Joint Expert Panel on Pension Standards.
The new PBSA will come into force when the accompanying regulations are written and proclaimed into law by the lieutenant-governor of British Columbia and after pension plans have had a period of time to make changes to comply with the new rules, expected later in 2014.
Updates on the progress of the new Pension Benefits Standards Act will be posted on the Financial Institutions Commission's website at: http://www.fic.gov.bc.ca/
Ministry of Finance