Amendments to the Pension Benefits Standards Regulation
This bulletin is intended to inform pension plan administrators, employers, pension consultants, plan members and others about recent changes to the British Columbia Pension Benefits Standards Regulation (the "Regulation"). These changes came into effect December 17, 1999.
The Regulation is made under the Pension Benefits Standards Act (the "PBSA"). The Regulation and the PBSA are administered by the Superintendent of Pensions and the Pensions Department of the Financial Institutions Commission.
The PBSA was amended in July 1999 through enactment of the Pension Benefits Standards Amendment Act, 1999 ("Bill 58"). A description of those amendments was provided in Bulletin 2 , issued in July 1999. Amendments to the Regulation have been made in order to give effect to many of the amendments to the PBSA. Other changes to the Regulation have also been made.
The following are brief descriptions of the major amendments to the Regulation:
- The filing deadline for an annual information return is now 180 days after the pension plan's fisca l year end (section 4 (1)).
- A plan is required to file audited financial statements if plan assets are greater than $10 million. The filing deadline for the audited financial statements is 270 days after the plan's fiscal year end (section 4 (4)).
- For a multi-employer plan, the filing deadline for an actuarial valuation report is now 270 days after the plan's fiscal year end (section 7 (2)).
- For a flexible benefit pension plan, detailed information on the flexible benefit provisions is required to be provided to members in the members' summary booklet, annual member's statement, and termination statement (sections 10, 11 and 12).
- A person age 65 or older is now able to unlock pension money, under the new section 30 (11) of the PBSA, if the total aggregate amount of benefits in all of that person's defined contribution plans, locked-in RRSPs, and LIFs is less than 40 percent the Year's Maximum Pensionable Earnings ("Y.M.P.E.") (40% of Y.M.P.E. for year 2000 is $15 040). The person is required to complete the new Form 5 and file a copy with the relevant financial institutions. Spousal consent to the unlocking, if the person has a spouse, is also required (section 23.1 (1), Form 5).
- A person who has been a non-resident of Canada for more than 2 years is now able to get money released from pension plans, RRSPs, and LIFs, under the new section 30 (12) of the PBSA. The person is required to complete the new Form 6, attach a copy of a determination by the Canada Customs and Revenue Agency that the person is a non-resident, and file a copy of the form with the relevant financial institutions. Spousal consent to the unlocking, if the person has a spouse, is also required (section 23.1 (2), Form 6).
- The transfer deficiency rules in section 25 now also apply to a transfer to a non-resident under section 30 (12) of the PBSA, and a transfer related to a business successorship under section 58 of the PBSA (section 25 (1)).
- A plan can require a terminating member to exercise portability with respect to a small pension, under section 33 (5) of the PBSA, if the commuted value is now less than 20 percent of Y.M.P.E. (20% of Y.M.P.E. for year 2000 is $7 520) (section 28).
- A plan is now required to provide a terminating member the option of commuting a pension if the monthly pension would be less than 1/12 of 10 percent of Y.M.P.E., or the commuted value would be less than 20 percent of Y.M.P.E. (section 33).
- If a plan is terminated with a solvency deficiency, other than a negotiated cost plan, and the employer is not insolvent, the employer is now required to make special payments to eliminate the solvency deficiency within 5 years (section 35 (3.1), (3.2) and (3.3)). Annual information returns must continue to be filed after successive fiscal year ends until the solvency deficiency has been eliminated (section 4 (3)). Actuarial valuation reports must be filed as of the date of termination, and annually thereafter until the solvency deficiency has been eliminated (section 6 (2) (d)).
- If there has been a reduction of benefits under section 59 (3) of the PBSA, a corresponding reduction of special payments is now allowed (section 35 (21)).
- The persons entitled to consent to an employer's proposal for withdrawal of surplus includes surviving spouses in the class with former members (section 42 (8)).
- A multi-employer plan is permitted to have provisions to allow for the suspension of the pension benefits of a person in receipt of a subsidized early retirement pension, who has returned to work in the same trade and industry with an employer that does not contribute to the plan. In the event that the benefits of a person are suspended, the plan is required to resume benefit payments once the person again ceases working, or reaches normal retirement age (section 22.1).
- The 4 previously existing prescribed forms have been amended, in part to accommodate same sex spouses. Two new forms, Form 5 and Form 6 have been added (Schedule 2).
Approximately 80 other changes have been made to the Regulation. They mainly involve repeal of provisions that were no longer applicable, clarification of existing provisions, and other housekeeping matters.
The following new sections of the PBSA, related to the provisions described above, also came into force on December 17, 1999: sections 9 (7), 30 (11) and (12), 51 (2), 61 (2) to (7) and a definition for "early retirement pension". Other amendments to sections 9 (3) (b) (i) (B) and 37 (5) of the PBSA, and to the definition of "commuted value", also came into force.
Further amendments to the Regulation, to introduce a locked-in retirement income fund ("LRIF") as an alternative vehicle for transfers of pension money are proposed for the near future. New provisions requiring information on investment options to be provided to members of defined contribution plans are also being contemplated.
The amendments to the Regulation are contained in B.C. Regulation 455/99. Printed copies of these amendments, along with the complete Pensio n Benefits Standards Regulation and Pension Benefits Standards Act, are available from Crown Publications.
More information on the Pension Benefits Standards Act and Pension Benefits Standards Regulation is available on the Pensions Department web site located, here.
For further information contact the Pension Standards Branch at (604) 660-3555.
More information on the Pension Benefits Standards Act and Pension Benefits Standards Regulation is available on this web site: