Client Update: New Brunswick proposes Pooled Registered Pension Plan legislation
On November 14, 2017, Bill 22, also known as the proposed Pooled Registered Pension Plan Act (the “NB Act”), was introduced in the New Brunswick Legislature. If passed, New Brunswick would join other provinces, including Nova Scotia, in enacting legislation similar to the Federal Act bearing the same name which was introduced in 2012. Like the Federal Act, which covers federally regulated employees, the NB Act would potentially provide access to Pooled Registered Pension Plans (“PRPPs”) to New Brunswick employees.
In general, PRPPs are seen as a means of filling in gaps for employers that do not provide employment pension plans, by pooling contributions and distributing the associated costs across sectors. The regulatory framework enables third-party companies to seek licenses to provide PRPPs to multiple employers with investment and administrative management of the funds. Employer participation is voluntary and is open to smaller employers and the self-employed.
PRPPs must be provided to members for “low cost”, which according to the Federal definition means the cost of a defined contribution plan with at least 500 employees. The proposed NB Act leaves the definition of “low cost” to be determined by regulation.
Like other provincial PRPP legislation, the proposed NB Act aligns very closely with the Federal PRPP scheme, with the main differences being mostly procedural in nature. The NB Act also deals at length with the entitlement to pension funds of former spouses or common law partners on the breakdown of a marriage or partnership.
Given the close adherence of the proposed NB Act to the Federal model, it seems possible that New Brunswick will subscribe to the Multilateral Agreement Respecting Pooled Registered Pension Plans and Voluntary Retirement Savings Plans (“Multilateral Agreement”) once its legislation is passed. Currently, all provinces with PRPP legislation in effect are signatories. The signatory provinces effectively delegate responsibility for licensing, registering and supervising PRPPs to the Federal Office of the Superintendent of Financial Institutions (“OSFI”). This coordination further enables multi-jurisdictional PRPPs by streamlining and centralizing the regulatory regime. It remains to be seen whether steps will be taken to join the other signatory provinces and make OSFI-regulated PRPPs immediately available in New Brunswick as well.
The proposed NB Act also follows other provinces to enact PRPP legislation in leaving a broad spectrum of matters to be determined by regulations, which are yet to come. For example, such important matters as frequency of employer contributions, when an employer’s contribution rate may be set to 0, and the criteria for determining whether a PRPP is “low cost”, are left to be provided in the regulations. In Nova Scotia, PRPP regulations were released for consultation prior to being passed.
If passed, the NB Act should be viewed as a positive step towards offering New Brunswickers another option in saving for their retirement.
This update is intended for general information only. If you have questions about how the cases or tips above may affect you, please contact our pension and benefits law practitioners such as Paul Smith in Saint John and Dante Manna in Halifax.
Archive
Stewart McKelvey is pleased to announce the creation of Discovery: Atlantic Education and the Law, a publication specifically designed for universities and colleges. We know it is not always easy for institutions in Atlantic Canada…
Read MoreRick Dunlop and Kevin Landry New Brunswick’s Final Report of the Select Committee on Cannabis was released September 1, 2017. The Committee was appointed by the Legislature of New Brunswick and was mandated to conduct…
Read MoreJennifer Taylor A child and her adoptive parents “found themselves caught up in a judge-made vortex of uncertainty and delay” when a judge made a “self-directed constitutional reference” instead of issuing an adoption order, prolonging…
Read MoreJennifer Taylor Introduction The recent Nova Scotia Supreme Court decision in Dyack v Lincoln is a nice case study on how to work through a limitations issue. It arrives almost two years after the “new”…
Read MoreBrian G. Johnston, QC While the concept of good faith is not new to employment law, its limits and implications remain uncertain. In a recent decision, Avalon Ford v Evans 2017 NLCA 9, the Newfoundland…
Read MoreLevel Chan and Dante Manna On August 9, 2017, the Nova Scotia Superintendent of Pensions announced temporary solvency relief for defined benefit pension plans available effective August 8, 2017. The changes allow pension plan sponsors…
Read MoreKevin Landry Edmonton wants “Cannabis Lounges”, Nova Scotia Landlords don’t want tenants to smoke marijuana in their rental homes, and Calgary City Council contemplates a private recreational cannabis system. The old adage of “Location. Location.…
Read MoreJon O’Kane and Jamie Watson Legal cannabis will have numerous implications for insurers. The federal Cannabis Act (discussed here), the provincial acts (discussed here) and the regulations (discussed here) are all going to add layers…
Read MoreVasu Sivapalan and Ben Whitney Legalized and regulated cannabis is on track to become a reality in Canada in just under a year (on or before July 1, 2018). This will create a number of…
Read MoreFurther to our Client Update on June 15 titled, “Requirement to register as a lobbyist in New Brunswick”, the deadline for initial registration under the Lobbyists’ Registration Act of New Brunswick has been extended from…
Read More