Client Update: New Nova Scotia pension plan asset transfer regulations
On November 29, 2017, the Nova Scotia Department of Finance and Treasury Board released new regulations with respect to asset transfers between pension plans that are effective November 28, 2017. The regulations apply to transfers of pension plan assets when there is a sale of business or an employer establishes a new plan to replace or succeed an existing one.
The regulations are similar to Ontario regulations with respect to asset transfers and provide for:
- Transfers will be in accordance with the agreement between employers or plan sponsors for the transfer of assets from the original plan to the successor plan;
- Prescribed notices to eligible and ineligible members, former members and retired members and other persons entitled to benefits as well as bargaining agents and advisory committees;
- Prescribed notices, information and forms to be provided to eligible members if the transfer agreement requires individual consent for transfer;
- Transfer of assets on a solvency (rather than going concern) basis. The solvency funded ratio of the successor plan after the transfer must be either (i) at least 100% (85% for sale of business transfers); or (ii) no more than 5% below the solvency funded ratios of each of the original plan and the successor plan before the transfer;
- Continuation of special payments until the transfer of assets;
- Transfer with respect to defined benefits is not authorized if the successor plan is permitted to reduce accrued pension benefits;
- The amount of a transferred member’s accrued pension benefits under the successor plan, excluding ancillary benefits, must equal at least 85% of their accrued pension benefits under the original pension plan, also excluding ancillary benefits, as of the effective date of the transfer of assets.
The regulations provide clarity in an area that was not covered when the current regulations were released in 2015.
Of note, there are also provisions with respect to the transfer from an existing Nova Scotia single employer defined benefit pension plan to an Ontario multi-employer targeted benefit pension plan. That transfer is subject to an agreement to transfer assets and individual consent of members prior to transfer of their benefits.
The foregoing is intended for general information only. If you have any questions, please contact our Pensions and Employee Benefits Group.
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