16 Mar Amendments to Act Bring Flexibility to Managing Pension Plans
March 12th, the government of Nova Scotia introduced changes to the Pension Benefits Act. Designed to support employees by offering greater flexibility in managing defined-benefit plans, the changes will also help more employers offer them by removing barriers.
The changes will affect the 92,000 Nova Scotians who belong to one of the 132 defined-benefit pension plans registered under the Nova Scotia Pension Benefits Act. They are based on the What We Heard document, a report based on employee and employer responses to a September 2017 government regulatory review.
Released in April 2018 the What We Heard document indicated that some pension plans have struggled to remain solvent under the existing regulatory framework. Employees needed more transparency and protection of existing benefits, while employers sought more flexibility and stability in the funding network to allow them to keep offering plans.
“changes will provide more flexibility and improve the stability of defined-benefit pension plans”
The legislative changes will:
- Introduce reserve accounts.
- Remove limits on the use of letters of credit.
- Allow for the discharge of liability for annuity buyouts.
Additionally, administrative changes were made to:
- Improve language regarding deemed trust provisions.
- Clarify that information provided to the superintendent of pensions may not be disclosed except as permitted by the act.
“Government values the security that workplace defined-benefit pension plans provide and wants them to continue so Nova Scotians can have peace of mind in their retirement years,” said Finance and Treasury Board Minister Karen Casey. “These changes will provide more flexibility and improve the stability of defined-benefit pension plans in many organizations, including private-sector companies, municipalities and universities.”
When the bill passes, administrative changes will immediately come into effect. In the fall, remaining legislative will be proclaimed and made effective.