Finance
Summary
- Amendments to the Pension Benefits Standards Act will take effect in 2026, strengthening pension standards and improving long-term outcomes for workers
- For the first time, members in defined contribution plans can save more through automatic contribution escalation, with the option to opt out
- Surviving spouses of members who die before retirement will be able to choose a pension directly from the plan instead of a locked-in transfer
- The changes will exempt both types of specified individual plans from BC Financial Services Authority registration, reducing employer costs for executive compensation
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People with workplace pension plans will soon see updated pension standards that support retirement income security, make it easier to build savings and better protect their families.
B.C.’s Pension Benefits Standards Act (PBSA) sets minimum standards for B.C. employer-sponsored pension plans to safeguard the interests of members and the long-term financial health of plans. The Province is strengthening the standards by removing exceptions and inconsistencies, while also eliminating an unnecessary administrative burden for employers.
“People in B.C. should have pension standards that are clear, fair and designed to support their retirement income,” said Brenda Bailey, Minister of Finance. “By strengthening pension standards and removing red tape that doesn’t serve workers or employers, we’re making it easier for people to save and ensuring families have stronger protections when they need them most.”
Helping people save more for retirement
To support stronger retirement outcomes, the Province is implementing the option for automatic escalation of pension contributions. Under this approach, member contributions increase automatically unless the member opts out after receiving notice.
Automatic escalation helps address low contribution rates, enabling members to receive the full employer-matching contribution. People can grow their retirement savings without having to take additional steps each year.
Improving options for surviving spouses
The changes also improve outcomes for families when a plan member dies before retirement. Surviving spouses will have the option to choose a pension directly from the plan instead of a locked‑in transfer. During a challenging time, regular pension payments can provide families with greater financial stability.
Reducing the costs for employers to offer individual pension plans
The updates reverse 2015 changes that required employers offering one type of specified individual plan (SIP) to register with the BC Financial Services Authority. These SIPs, defined benefit pension plans for high-earning employees registered under federal income tax legislation, were not required to register in B.C. before 2015.
The registration requirement created significant cost and administrative challenges for employers, particularly in sectors, such as construction and mining, where SIPs help attract and retain executive talent. Removing this requirement will reduce red tape and support hundreds of employers throughout the province.
Quotes:
Steven Frank, president and CEO, Canadian Life and Health Insurance Association –
“These changes will help strengthen retirement security in the workplace by making it easier for British Columbians to save for retirement and reducing administrative burden for employers.”
Spenser McCaig, senior consultant, Westcoast Actuaries Inc. –
“Restoring the exemption to cover plans for all specified individuals removes a significant barrier for pension plans provided to highly compensated employees. Bill 33 provides significant relief from the administrative burden on these plans, allowing a more flexible and simplified pension arrangement for executive staff. We look forward to a renewed interest from employers in providing a comprehensive retirement benefit to their executive staff.”
Learn More:
- To read Bill 33, visit: https://www.leg.bc.ca/parliamentary-business/overview/42nd-parliament/4th-session/bills/3rd_read/gov33-3.htm
- To read the PBSA, visit: https://www.bclaws.gov.bc.ca/civix/document/id/complete/statreg/00_12030
- For the 2023 announcement, visit: https://news.gov.bc.ca/releases/2023FIN0058-001541
- For more information about the regulation of the PBSA, visit: https://www.bcfsa.ca/industry-resources/pension-resources
- To view the BCFSA regulatory advisory, visit: https://www.bcfsa.ca/industry-resources/pension-resources/pension-regulatory-information/pension-regulatory-advisories
A backgrounder follows.
