Benefit Regulation Amendments
Employers, and in some cases employees, in Nova Scotia have advised the Government that funding defined benefit pension plans has become onerous following the decline in the financial markets and the continuing low rates of return. This situation is not unique to Nova Scotia, and several other provinces have made changes to assist plans in responding to market pressures.
After due consideration, with a view to maintaining defined benefit pension plans for employees, the Government responded to this concern by amending the Pension Benefits Regulations on December 9, 2004 under Order in Council 2004-487 to remove the requirement to fund "grow-in" benefits under a solvency valuation. Under the Pension Benefits Act, plan administrators are required to provide members not yet eligible for early retirement with the right to "grow in" to unreduced, early retirement benefits provided under a pension plan, where a defined benefit pension plan is winding up. In this amendment to the regulations, "grow-in" provisions continue to apply on full or partial pension plan wind-up; however, their priority on pay out would be second to the basic pension that all employees would receive. "Grow-in" benefits would only be paid out if there were sufficient assets in the fund at the time of wind up of a plan to provide for those benefits. The "grow-in" provisions do not exist in any other provincial jurisdiction in Canada, other than Nova Scotia and Ontario.
The Government also reviewed the request of university plan administrators for additional flexibility in funding their plans and amended the Regulations on April 22, 2005 under Order in Council 2005-162 to allow universities a time extension to pay back any solvency deficiencies over 15 years as opposed to 5. This extension applies only to solvency deficiencies that arise prior to January 1, 2006 under university pension plans. If there is a partial wind up of a university plan, due to outsourcing a particular service or terminating a program, immediate and full funding of the benefits payable in respect of those employees is required.
Help
Contact Us
Emergencies