Comparison of new Regulations with previous Regulations

Transcription

1 Comparison of new Regulations with previous Regulations Section Part 1: Interpretation and Application... 1 Definitions and Calculations... 1 Citation... 1 Definitions... 1 New definitions have been added: Annual Information Return annual statement to members approved form Canadian Institute of Actuaries Standards of Practice Certified copy Cost certificate CPP Deferred life annuity Designated plan Domestic contract Employee contributions Employer contributions federal Income Tax Act federal Income Tax Regulations former regulations Handbook of the Canadian Institute of Chartered Accountants immediate life annuity individual pension plan insured pension plan letter of credit life annuity maximum funding valuation OAS pensionable earnings physician prescribed fee pre-retirement death benefit previous year credit balance public accountant QPP retirement savings arrangement solvency asset adjustment solvency assets solvency liabilities solvency liability adjustment solvency valuation solvency valuation interest rate transfer deficiency transfer ratio valuation date valuation report wind-up report Calculation of actuarial gain or loss... 3

2 Calculation of going concern assets... 4 Changed to exclude any letter of credit held in trust for the pension plan. Calculation of solvency assets... 5 Changed to exclude any letter of credit held in trust for the pension plan and the present value of any special payments in respect of a going concern valuation unfunded liability disclosed in previously filed valuation reports. Calculation of solvency asset adjustment... 6 Changed to recognize letters of credit. Determination of solvency liabilities... 7 Changed to include indexation of benefits accruing after effective date of the legislation. Solvency liability adjustment... 8 Determination of solvency deficiency... 9 Changed to recognize previous year credit balance and solvency asset adjustment. Solvency valuation Calculation of transfer ratio Changed to recognize the previous year credit balance. Book value substituted for market value in calculations Jointly Sponsored Pension Plans Additional criteria for jointly sponsored pension plans New provisions. Administrator s statement about criteria for jointly sponsored pension plan New provisions. Specified Multi-Employer Pension Plans Specified multi-employer pension plan class of plans Eligibility criteria for specified multi-employer pension plans Incorporating provisions contained in the Income Tax Act that were previously referenced. Election to be specified multi-employer pension plan Notice of election to members Exemptions from the Act and Regulations Exempted pension plans Amendment to avoid revocation of registration under federal Income Tax Act. 20 New provisions. Pension plans maintained for employees of 2 or more employers Nova Scotia Health Employees Pension Plan not a multi-employer pension plan 22 Significant shareholder plans Ensuring no conflict of interest for multi-employer pension plan Notices and summaries of contributions not required for certain multi-employer pension plans New provisions. Exemption from registration or audit under reciprocal agreement... 26

3 Designated Jurisdictions Designated jurisdictions prescribed Part 2: Pension Plan Administration Registration of Pension Plans and Amendments, and Filing of Agreements Application for registration of pension plan Provisions added for consequences of withdrawal of a participating employer from a multi-employer pension plan, and additional requirements for a jointly sponsored pension plan were added. Application for registration of amendment to pension plan Changed to clarify filing of changes to the documents that create and support the pension plan. Notice and explanation of pension plan amendment Changed to written notification to members of amendments 45 days before the amendment is filed. Valuation report on amendment to pension plan Changed to require identification of changes to previous report because of amendment. Amendments that are permitted only if cost of amendments paid into pension fund Amendment to specified multi-employer pension plan requiring liquidation of going concern unfunded liability Requirements for filing reciprocal transfer agreements Requirements for reciprocal transfer agreements.35 New Provision Advisory Committees Advisory committee definition Notice and information about establishing advisory committee Voting on establishing advisory committee Notice concerning result of vote to establish advisory committee Nominating advisory committee representatives Voting on advisory committee representatives Notice of results of vote on advisory committee representatives Term of office for advisory committee Participating on advisory committee Advisory committee procedure, governance and operations Pension Fund Investment and Administration Pension fund trustee Investment of plan assets must be in accordance with regulations Statement of investment policies and procedures... 48

4 Record of investments Designated jurisdictions alternate corresponding provisions Reporting to the Superintendent Pension plan that provides only defined contribution benefits exempted Initial valuation reports Time period for filing changed from 60 days to 90 days after the plan is established. New requirements related to the funding of escalated adjustments for benefits earned after the effective date of the legislation. New requirement for a valuation report for a designated plan to include a maximum funding valuation. Valuation reports at regular intervals New requirements related to the funding of escalated adjustments for benefits earned after the effective date of the legislation. New requirement to set out the previous year credit balance. New requirement for a valuation report for a designated plan to include a maximum funding valuation. Valuation reports for multi-employer pension plans Changed time period for administrator to act after receiving a report. Solvency concerns indicated in initial or review valuation report Now applies to all plans, not just those seeking solvency funding relief. Valuation report for plan that ceases to be designated plan or individual pension plan Superintendent may require additional valuation report Payment of contributions in accordance with additional valuation report Time period for filing valuation reports Changed from 12 months to 9 months Cost certificates Changed to recognize previous year credit balance, transfer ratios and to require identification of assets and liabilities. Reports and certificates to be prepared by actuary, accountant or other authorized person Use of actuarial methods and assumptions in preparing valuation and wind-up reports Actuarial information summary to accompany valuation report Copy of report to agent of administrator Filing annual information return Financial statements required to be filed for pension plans Content and preparation of financial statements Auditor s report on financial statements Auditor s duty to report to administrator and Superintendent... 69

5 Extension of time limit for filing of document Information to Members and Others Member and eligible member information Information to be provided where plan permits optional contributions Information to be provided before variable benefits account established Annual statement to members Additional information to be provided the transfer ratio, its impact, statements regarding special payments, letter of credit, if exempt from solvency funding, treatment of surplus both ongoing and on wind-up. For multi-employer pension plans, a statement that benefits may be reduced if funding is not sufficient. Annual statement to variable benefits participant Statement on termination of employment or membership Statement to variable benefits participant on transfer from variable benefits account Death benefits statement Statement after death of variable benefits participant Notification of options to retiring member Retirement statement to member Information required to be available on request Changed to add actuarial information summaries, letters of credit statement of investment policies and goals. Inspection of filed records of pension plan and pension fund Records Respecting Pension Plans Retention of records Part 3: Funding of Pension Plans Payment of Contributions Employer contributions and employee contributions set out in pension plan Minimum contributions to pension plan Subsection (2) is new. Sufficiency of contributions for a multi-employer pension plan Sufficiency of contributions for Specified multi-employer pension plan Contributions made to a jointly sponsored pension plan Previous year credit balance used to reduce employer payments Funding of escalated adjustments Subsection (1) is a new provision. When and how payment of contributions to be paid Time limits for contributions under pension plans that are subject to collective agreements Offset on conversion of plan to defined contribution benefit... 94

6 Restrictions on reductions or suspensions of contributions New provisions. Use of actuarial gain Administrator s or agent s notice that contributions not paid Summary of Contributions Special Payments General Minimum amount of special payments Subsection (2) is a new provision. Interest payments required for employers who provide letter of credit Alternative determination of special payments for jointly sponsored pension plans.101 Previous year credit balance Adjustment of special payments for solvency excess Special Payments Temporary Exceptions Temporary exceptions to minimum special payments going concern unfunded liabilities Temporary exceptions to minimum special payments solvency deficiencies arising under former regulations Definitions for election to extend amortization period Sections 108 to One-time election to extend amortization period Election to extend amortization period Information statements and notices of objection to be provided for proposed election Last date for accepting notices of objection Administrator to keep notices of objection Prohibition against identifying persons who submit notices of objection Successful election to extend amortization period Certificate of consent to election Notice of extension of amortization period to members Progress report on special payments under extended amortization period Letters of Credit Requirements prescribed in Schedule Prescribed employers Prescribed person or entity provided letter of credit Determining solvency liabilities for subsection 77(3) of Act Deadlines for providing letters of credit When trustee must demand payment of amount of letter of credit Notification by trustee if payment demanded under letter of credit 123

7 Notification by trustee if issuer of letter of credit fails to pay on demand Part 4: Membership, Benefits and Interest Pension Plan Membership Prescribed classes of employees Variations and Reductions for CPP, QPP and OAS Variation of pension benefits for CPP or QPP entitlements Calculating reduction when integrating retirement benefits with CPP, QPP and OAS Reduction of bridging benefits Application for withdrawal from pension plan in circumstances of shortened life expectancy Deferred pension under pension plan insured by individual level-premium contracts issued before qualification date Portion of benefits attributable to employment after January 1, 1988 final average or best average earnings plans Death Benefit Entitlements Exercising entitlement to pre-retirement death benefit under subsection 67(1) or (2) of Act Exemption from reduction in pre-retirement death benefit entitlement Offset in relation to pre-retirement death benefits Commuted Value and Limits on Transfers Commuted value of pension benefits and ancillary benefits for transfer Calculating portion of commuted value available for transfer Limits on transferring commuted value of pension benefits Clause 137(2)(a) changed reduction of transfer ratio that is materially reduced to reduction of transfer ratio reduced to a value less than 0.9 Balance of transfer if less than 100% of commuted value transferred Exemptions to limits on transfers Benefits that result from voluntary contributions for past service Reciprocal transfer agreement 50% rule Entitlement to excess amount of commuted value of converted benefits 142 Additional prescribed ancillary benefits Bridging benefits not taken into account Phased Retirement Option Definition of phased retirement option Application for phased retirement option Participation in phased retirement option Variable Pension Benefits Definitions for Sections 150 to Pension plan provisions for variable pension benefits Additional transfers permitted to variable benefits account Maximum amount of variable pension benefits payable

8 Optional benefits prescribed Interest Definitions for crediting interest on contributions Sections 155 to When contribution interest accrues Interest rates for defined contribution pension plan Interest rates for defined benefit pension plan Interest for pension plans that provide both defined contribution benefits and defined benefits Interest rate on termination of employment or membership Interest on lump sum payments Interest on commuted value of former member s deferred pension Interest on ordered repayment of money or return of assets Interest on commuted value on wind-up of plan Withdrawing Surplus from Pension Plan Notice of application to withdraw surplus from continuing pension plan.163 Application to withdraw surplus from continuing pension plan Determining surplus for continuing pension plan Notice of application to withdraw surplus from plan being wound up 166 Application to withdraw surplus from plan being wound up Notice of intention to enter into agreement for payment of surplus to employer 168 Payments in accordance with election re surplus Number of persons for purposes of agreement regarding payment of surplus to employer Part 5: Wind-up of Pension Plans Notice of intended wind-up Statement of member entitlements on wind-up Payments in accordance with election on wind-up Prescribed circumstances for ordering wind-up Wind-up report Additional information with wind-up report Minimum commuted value as of effective date of wind-up 177 Payments exempt under subsection 94(3) of Act Payments out of pension plan on wind-up Reduction in benefits on wind-up Documents required to be filed within 6 months of wind-up Notice of distribution of all assets of pension plan Payment of outstanding amounts by employer on wind-up Payments on wind-up of pension plan other than jointly sponsored pension plan 184 Payments of any additional amounts on wind-up of jointly sponsored pension plan Administrator s responsibilities during wind-up if additional funding required 186 Subsection 186(4) new provision. Definitions for election to exclude jointly sponsored pension plan from Section 97 of Act Sections 189 to Notice of vote

9 Vote on whether to make election to exclude Last date for accepting election forms Maintenance of election forms Prohibition against identifying persons who submit election forms Successful election to exclude Notice of election Part 6: Withdrawals and Transfers Withdrawals and Transfers from Pension Plans Direction to administrator to exercise entitlement under subsection 61(5) of Act..195 Direction to administrator to transfer into registered retirement savings arrangement Transfers to a retirement savings arrangement under clause 61(1)(b) of Act Transfers of excess amount into LIRA or LIF Life Annuities, LIRAs and LIFs Life annuities Purchasing LIRAs Contracts establishing and governing LIRAs Administrator s duties respecting transfers to LIRAs Conditions for transferring assets from LIRAs Amending LIRAs Purchasing LIFs Contracts establishing and governing LIFs LIF filing requirements and Superintendent s list Administrator s duties respecting transfers to LIFs Conditions for transferring assets from LIFs Amending LIFs Withdrawals from LIRAs and LIFs Definitions for circumstances of financial hardship Sections 213 to Prescribed circumstances of financial hardship Application to Superintendent for consent to withdraw funds from LIRA or LIF in circumstances of financial hardship Declaration about a spouse for withdrawal from LIRA or LIF Mortgage default circumstance application information Medical expenses circumstance application information Rental default circumstance application information..217 Reduced income circumstance application information Superintendent may require additional information Superintendent entitled to rely on information Stale-dated document not valid for application

10 Only 1 application in 12-month period Calculating maximum consented amounts Consented amount may be lower than requested Application related to mortgage default or rental default circumstance prohibited Superintendent s decision Notification of decision Owner authorized to receive payment Payment after consent Stale-dated consent is nullity Withdrawal from LIRA or LIF in circumstances of shortened life expectancy Changed to recognition of illness or disability likely to shorten their life expectancy to less than 2 years from a mental or physical disability that is likely to considerably shorten their life expectancy. Withdrawal from LIRA or LIF in circumstances of non-residency Withdrawal of small amounts from LIRA or LIF at age Changed to increase withdrawal amount from 40% of the YMPE to 50% of the YMPE. Subsection 233 (3) is a new provision. Part 7: Division of Pension Entitlement and Compliance with Attachment Division of Pension Entitlement Between Spouses Definitions for division of pension entitlement Sections 235 to Application of Sections 234 to Matrimonial Property Act settlements Separation date specified in court order or domestic contract Information about pension plan, LIRA or LIF provided to spouse 238 Notice to member, former member or retired member of spouse s request Limited members Information to be provided to limited member Transfer of proportionate share out of pension plan Limited member s separate pension resulting from division of defined benefit..243 End of entitlement to limited member s proportionate share.244 Death of member, former member or limited member entitled to defined benefit 245 Variation of payment to disabled person and payment of commuted value if benefit is small Calculation of proportionate share of defined contribution benefit Calculation of proportionate share of LIRA or LIF Calculation of proportionate share of pension, defined benefit or pre-retirement death benefit in respect of defined benefit Adjustment of a member s or former member s defined benefit Notice to spouse if member s, former member s or retired member s interest may be affected Administrative fees incurred to satisfy entitlement of spouse Complying with Attachment Costs of complying with attachment under Maintenance Enforcement Act Changed to add cost of attachment of a defined benefit and a defined contribution benefit

11 Schedule 1: Permitted Investments Definitions for Schedule Indirect investment by administrator...2 Person in control... 3 Subsidiary corporations... 4 Affiliated entities... 5 Substantial investments... 6 Associated with person or pension plan... 7 Application of this Schedule... 8 Quantitative limits on lending or investing money of pension plan.9 Limits on investing securities of a corporation. 10 Limits on investing securities of real estate corporation..11 Limits on investing securities of resource corporation Limits on investing securities of investment corporation Transactions for the purposes of Sections 15 and 16 of Schedule Prohibited related party investments and transactions Permitted related party investments and transactions Schedule 2: Letters of Credit Definitions for this Schedule... 1 Letters of credit criteria... 2 Providing a copy of trust agreement..3 Issuers of letters of credit... 4 Matters that must be included in letter of credit... 5 Matters that must be included in trust agreement... 6 Schedule 3: Nova Scotia LIRA Addendum The addendum is new. However, many of the requirements were in the previous regulations, except as noted below. Definitions for this Schedule... 1 Note Re Requirements of the Pension Benefits Act and Regulations... 1 Transferring assets from LIRAs... 2 Information to be provided annually by financial institution on transfers of assets of LIRAs.. 3 Information to be provided annually by financial institution.4 Death benefits... 5 Clauses 5(1)(a) and (b) are new provisions. Waiver of entitlement to death benefits by spouse... 6 Information to be provided by financial institution on death of owner... 7 Schedule 4: Nova Scotia LIF Addendum

12 Definitions for this Schedule... 1 Fiscal year of LIFs... 2 Reference rate criteria... 3 Note Re Requirements of the Pension Benefits Act and Regulations... 3 Periodic payments of income out of LIFs... 4 Amount of income payments from LIFs... 5 Minimum annual LIF withdrawal... 6 Pro-rating amount of withdrawal if initial fiscal year less than 12 months... 7 Maximum annual life income from LIF that does not provide for temporary income... 8 Withdrawal of temporary income from LIFs... 9 Maximum temporary income for fiscal year Maximum life income withdrawal from LIF Maximum annual income payable if financial institution guarantees rate of return of LIFs Income in excess of maximum Information to be provided annually by financial institution..14 Clause 14(a)(iv) added to recognize withdrawal for financial hardship. Transferring assets from LIFs Information to be provided by financial institution on transfer of balance of LIFs 16 Information to be provided upon transfer of additional amounts to LIFs..17 Death benefits Waiver of entitlement to death benefits by spouse Information to be provided by financial institution on death of owner Schedule 5: Life Income Fund Factor F Schedule 6: Life Income Fund Temporary Income Factor D