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.
Archive
We are pleased to introduce our new labour and employment podcast, Workplace Issues in Atlantic Canada: A Legal Perspective. In this series, our labour and employment lawyers across the region will discuss hot topics affecting…
Read MoreRick Dunlop and William Wojcik On May 12th, 2021, the Government of Nova Scotia announced in a news release that it is implementing a COVID-19 Paid Sick Leave Program (“Program”) to support workers who must…
Read MoreBrendan Sheridan As Canada begins its economic recovery from the COVID-19 pandemic, immigration is playing an important role. While much of the focus has been on increasing the skilled workforce to fill gaps in the…
Read MoreBrian Johnston, QC, Killian McParland and Bhreagh Ross On April 6, 2021, Stewart McKelvey was advised by the Federal Labour Program that the Labour Program’s Forward Regulatory Plan 2021–23 (“Plan”) is now available and includes details and timing on 21…
Read MoreMark Tector and Bhreagh Ross With vaccine rollout well underway across the country, employers should be aware of legislative changes that entitle employees to paid or unpaid time-off to receive the COVID-19 vaccine. Here are…
Read MoreJennifer Taylor and Bhreagh Ross In the recent Reference re Greenhouse Gas Pollution Pricing Act (“GGPPA Reference”), the judges of the Supreme Court of Canada unanimously agreed that climate change is real and dangerous.…
Read MoreWe are pleased to present the fifth installment of Beyond the border, a publication aimed at providing the latest information to clients about new programs and other immigration-related information that may be pertinent to employers of…
Read MoreRichard Jordan Is a worker under a contract “of” service or contract “for” service? The former means a worker is an employee whereas the latter means a worker is an independent contractor. The answer to…
Read MoreKevin Landry and William Wojcik In September 2020 the Supreme Court of Canada heard Reference re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11, a case featuring appeals from Ontario, Saskatchewan, and Alberta with respect to…
Read MoreChristopher Marr, TEP and David Slipp Effective March 1, 2021 in all provinces of Canada, other than Ontario and Quebec (to be effective there on July 1, 2021), securities laws related to the distribution of…
Read More