Client Update: New Nova Scotia pension plan asset transfer regulations
Peter McLellan, QC and Level Chan
On November 29, 2017, the Nova Scotia Department of Finance and Treasury Board released new regulations with respect to asset transfers between pension plans that are effective November 28, 2017. The regulations apply to transfers of pension plan assets when there is a sale of business or an employer establishes a new plan to replace or succeed an existing one.
The regulations are similar to Ontario regulations with respect to asset transfers and provide for:
- Transfers will be in accordance with the agreement between employers or plan sponsors for the transfer of assets from the original plan to the successor plan;
- Prescribed notices to eligible and ineligible members, former members and retired members and other persons entitled to benefits as well as bargaining agents and advisory committees;
- Prescribed notices, information and forms to be provided to eligible members if the transfer agreement requires individual consent for transfer;
- Transfer of assets on a solvency (rather than going concern) basis. The solvency funded ratio of the successor plan after the transfer must be either (i) at least 100% (85% for sale of business transfers); or (ii) no more than 5% below the solvency funded ratios of each of the original plan and the successor plan before the transfer;
- Continuation of special payments until the transfer of assets;
- Transfer with respect to defined benefits is not authorized if the successor plan is permitted to reduce accrued pension benefits;
- The amount of a transferred member’s accrued pension benefits under the successor plan, excluding ancillary benefits, must equal at least 85% of their accrued pension benefits under the original pension plan, also excluding ancillary benefits, as of the effective date of the transfer of assets.
The regulations provide clarity in an area that was not covered when the current regulations were released in 2015.
Of note, there are also provisions with respect to the transfer from an existing Nova Scotia single employer defined benefit pension plan to an Ontario multi-employer targeted benefit pension plan. That transfer is subject to an agreement to transfer assets and individual consent of members prior to transfer of their benefits.
The foregoing is intended for general information only. If you have any questions, please contact our Pensions and Employee Benefits Group.
Archive
Peter McLellan, QC and Level Chan On November 29, 2017, the Nova Scotia Department of Finance and Treasury Board released new regulations with respect to asset transfers between pension plans that are effective November 28, 2017.…
Read MoreRick Dunlop and Kevin Landry The federal government has opened its 60-day consultation period with the release of its Proposed Approach to the Regulation of Cannabis. The paper outlines a potential regulatory framework which could…
Read MoreJosie Marks and Lara Greenough As 2017 comes to a close, please find below a summary of significant 2017 legislative amendments in each of the Atlantic Canadian provinces as well as federally, along with a…
Read MoreBrian Johnston, QC and Julia Parent In response to the report of the House of Commons committee on pay equity, the federal Liberal government announced its intention to bring in legislation to better ensure that…
Read MorePaul Smith and Dante Manna 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…
Read MoreAndrew Burke and Kevin Landry The Toronto Stock Exchange (“TSX”) has made two recent changes to the TSX Company Manual that will impact disclosure: A. It introduced a requirement for many corporate listed issuers to…
Read MoreJennifer Taylor There is a role for social justice in statutory interpretation, according to the Nova Scotia Court of Appeal in the recent decision of Sparks v Nova Scotia (Assistance Appeal Board). This case is…
Read MoreKevin Landry and Jamie Watson New Brunswick’s proposed cannabis regulatory scheme has been introduced. An initial press release was followed by the introduction of amendments to the New Brunswick Liquor Control Act, and the Motor…
Read MorePeter McLellan, QC & Level Chan In September 2017, Nova Scotia’s Department of Finance and Treasury Board announced that stakeholder input is being sought regarding potential permanent changes to the funding framework for defined benefit…
Read MoreAndrew Burke & Divya Subramanian Securities markets around the world are grappling with new concerns: As fintechs make cryptocurrency offerings such as Initial Coin Offerings (ICOs), Initial Token Offerings (ITOs) or other digital token offerings,…
Read More