New Brunswick introduces shared-risk pension plans

Greater flexibility – and greater regulatory oversight
By Hugh Wright
|Canadian HR Reporter|Last Updated: 10/10/2012

In the summer of 2012, New Brunswick introduced a new form of pension plan — a shared-risk plan — based on a model originating in the Netherlands. Although elements of the plan bear some resemblance to jointly sponsored pension plans and multi-employer pension plans, the particular combination in New Brunswick is unique in Canada.

The shared-risk model enables a variety of arrangements that allow for a reduction in earned benefits and restrictions on the ability to accrue ancillary benefits. It also provides for elevated regulatory oversight and direction.

The changes provide for both the establishment of new shared-risk pension plans and the conversion of existing defined benefit (DB) pension plans to the new format.