Changes to pensions act also announced
British Columbia has re-introduced legislation to bring pooled registered pension plans (PRPPs) to the province. Bill 9, which passed first reading on Feb. 19th, would enable employees of small and medium-sized businesses, as well as the self-employed, to join pension plans administered by regulated financial institutions.
B.C.’s legislation substantially adopts the federal legislation to ensure the province’s participation in the PRPP framework does not impose unnecessary administrative burden.
Providing PRPPs is voluntary and employer contributions are optional. If an employer offers a PRPP to employees, they will be automatically enrolled, but each employee has the right to opt out.
Nearly two-thirds of B.C. workers are without a registered pension plan. Removing the administrative burden of pension plans makes offering a pension plan more attractive and affordable for employers, said the government.
Alberta and Saskatchewan have also enacted PRPP legislation, and Quebec has passed similar legislation — the Voluntary Retirement Savings Plan.
Amendments to pensions act
B.C. has also made amendments to the new Pension Benefits Standard Act to clarify elements of the original act and help ensure the legislation will be ready for proclamation later this year.
The amendments are primarily technical corrections:
•A pension plan is not liable after transferring responsibility for pensions to a regulated insurance company, as long as specific conditions are met.
•The spouse of a deceased pension plan member can designate a beneficiary for the surviving spouse's benefits.
•A former participating employer that fails to provide required information to the plan administrator may be compelled to comply by court order.
•Member consent required for the distribution of actuarial excess or surplus does not apply to withdrawals from a solvency reserve account.
The modernized Pension Benefits Standard Act was passed by the B.C. Legislature in 2012 and included:
•reducing administrative costs
•enhancing the rights of pension plan members, including immediate entitlement to employer-paid contributions and more information about how a plan is operating and extending the same right to retired members
•establishing a framework to 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
•permitting innovative alternatives to existing plans, such as jointly sponsored cost-sharing pension plans and target benefit plans
•requiring other governance policies and providing additional powers to the superintendent of pensions.
In 2012, Alberta enacted parallel legislation as the Employment Pension Plans Act. The new PBSA represents B.C.’s joint commitment with Alberta to create harmonized pension standards legislation that adopts many of the recommendations in the 2008 Report of the B.C./Alberta Joint Expert Panel on Pension Standards.