Client Update: New Brunswick proposes Pooled Registered Pension Plan legislation
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 would join other provinces, including Nova Scotia, in enacting legislation similar to the Federal Act bearing the same name which was introduced in 2012. Like the Federal Act, which covers federally regulated employees, the NB Act would potentially provide access to Pooled Registered Pension Plans (“PRPPs”) to New Brunswick employees.
In general, PRPPs are seen as a means of filling in gaps for employers that do not provide employment pension plans, by pooling contributions and distributing the associated costs across sectors. The regulatory framework enables third-party companies to seek licenses to provide PRPPs to multiple employers with investment and administrative management of the funds. Employer participation is voluntary and is open to smaller employers and the self-employed.
PRPPs must be provided to members for “low cost”, which according to the Federal definition means the cost of a defined contribution plan with at least 500 employees. The proposed NB Act leaves the definition of “low cost” to be determined by regulation.
Like other provincial PRPP legislation, the proposed NB Act aligns very closely with the Federal PRPP scheme, with the main differences being mostly procedural in nature. The NB Act also deals at length with the entitlement to pension funds of former spouses or common law partners on the breakdown of a marriage or partnership.
Given the close adherence of the proposed NB Act to the Federal model, it seems possible that New Brunswick will subscribe to the Multilateral Agreement Respecting Pooled Registered Pension Plans and Voluntary Retirement Savings Plans (“Multilateral Agreement”) once its legislation is passed. Currently, all provinces with PRPP legislation in effect are signatories. The signatory provinces effectively delegate responsibility for licensing, registering and supervising PRPPs to the Federal Office of the Superintendent of Financial Institutions (“OSFI”). This coordination further enables multi-jurisdictional PRPPs by streamlining and centralizing the regulatory regime. It remains to be seen whether steps will be taken to join the other signatory provinces and make OSFI-regulated PRPPs immediately available in New Brunswick as well.
The proposed NB Act also follows other provinces to enact PRPP legislation in leaving a broad spectrum of matters to be determined by regulations, which are yet to come. For example, such important matters as frequency of employer contributions, when an employer’s contribution rate may be set to 0, and the criteria for determining whether a PRPP is “low cost”, are left to be provided in the regulations. In Nova Scotia, PRPP regulations were released for consultation prior to being passed.
If passed, the NB Act should be viewed as a positive step towards offering New Brunswickers another option in saving for their retirement.
This update is intended for general information only. If you have questions about how the cases or tips above may affect you, please contact our pension and benefits law practitioners such as Paul Smith in Saint John and Dante Manna in Halifax.
Level Chan and Dante Manna On March 12, 2019, the Nova Scotia legislature introduced long anticipated amendments to the Pension Benefits Act (“PBA”) which, according to a statement by Finance Minister Karen Casey, are aimed…Read More
Julia Parent and Graham Haynes In the long-awaited decision in the case of Orphan Well Association v Grant Thornton Ltd, the Supreme Court of Canada held that end-of-life environmental cleanup obligations imposed by Alberta’s provincial…Read More
Michelle Chai & Jennifer Taylor Justice Ann Smith of the Supreme Court of Nova Scotia recently dismissed an action against a disability insurer for being out of time. The case, Richards Estate v Industrial Alliance…Read More
Chad Sullivan and Bryan Mills New Brunswick has recently introduced a new regulation under the Occupational Health and Safety Act on the topic of problematic workplace conduct. The change will bring New Brunswick in line…Read More
Jennifer Taylor In an important decision for the auto insurance industry, the Nova Scotia Court of Appeal has confirmed that future CPP disability benefits are indeed deductible from damages awarded in Nova Scotia cases for…Read More
Brian Johnston, QC and Matthew Jacobs Bill C-86, enacted as SC 2018, c. 27, will effect massive changes upon how federal labour and employment relations are regulated. They come into effect in 2019 with staggered…Read More
We can all make 2019 a success by building on the year that was. For employers, 2018 was a year of many notable developments in labour and employment law across the country. We saw Ontario…Read More
Level Chan and Dante Manna As 2018 comes to an end, we countdown some pension and employee benefits developments in the last year that we anticipate may lead to developments in 2019. Discrimination in benefits…Read More
Kevin Landry The first look at regulations for cannabis edibles, extracts and topicals has arrived. The Federal Government has opened a 60-day consultation period respecting the strict regulation of additional cannabis products. Notice of the consultation was accompanied…Read More