The government of British Columbia has introduced legislation to modernize the Pension Benefits Standards Act and allow the private sector to offer a wider choice of pension plan options.
Bill 38 brings improvements to pension legislation by reducing administrative costs and enhancing the rights of pension plan members, including immediate entitlement to employer-paid contributions and more information about how a plan is operating, said the government. The bill will extend the same right to receive plan information to retired members.
“Employers have said they need streamlined regulation so that they can focus on their business and not on red tape,” said Minister of Finance Kevin Falcon. “Modernizing the legislation gives employers more flexibility to offer a wider choice of pension plan options, so that more British Columbians can have access to pension income during their retirement years.”
It also establishes a framework that will give former pension plan members the option of withdrawing locked-in funds in a registered retirement savings plan (RRSP) or life income fund in cases of financial hardship.
The changes permit innovative alternatives to existing plans, such as jointly sponsored cost-sharing pension plans and target benefit plans. Under the jointly sponsored cost-sharing plan model, similar to what currently exists in public sector pension plans, employers and employees would contribute equally to all elements of the pension plan, said the government.
Other key amendments include requiring governance and funding policies for defined benefit (DB) and target benefit plans.
The bill provides the superintendent of pensions the power to levy administrative penalties and appoint replacement administrators or actuaries.
The changes will also ensure that legislative support exists for the regulation of pension plans that have members located in more than one province, the government said.
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