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
Any individual, business or organization that uses email, text messages or social networks to promote their products and services should take note of Canada’s Anti-Spam Legislation and its accompanying regulations. Effective July 1, 2014, the…
Read MoreIN THIS ISSUE: Consistent Use: The Collection of Union Members’ Personal Information by their Union by Alison Strachan and Jonah Clements. Single Incident of Offensive and Threatening Facebook Post is Just Cause by Harold Smith, QC. The New Anti-Spam Law –…
Read MoreYesterday, Monday June 2, 2014, the Government of Newfoundland and Labrador introduced brand new (and unexpected) amendments to the Labour Relations Act. The full text of the proposed amendment can be accessed here. Bill 22, if it…
Read MoreDownload as a PDF
Read MoreDownload as a PDF
Read MoreThis morning the Supreme Court of Canada released its much awaited decision in McCormick v. Fasken Martineau DuMoulin, holding that most legal (and other professional) partnerships are not subject to Human Rights obligations to partners,…
Read MoreNo really. We mean it this time. During the Spring 2014 sitting of the legislature, the PEI government passed legislation that will result in significant changes to the standard automobile policy, effective October 1, 2014. Most…
Read MoreThe Editor’s Corner Clarence Bennett This edition focuses on employment and labour issues in Construction. From occupational health and safety legislation to what you need to know when the union organizer arrives at your workplace.…
Read MoreFederally regulated employers should be aware of changes to the Canada Labour Code (“the Code“) effective April 1, 2014, namely subsections 219 and 223-231 of the Jobs and Growth Act, 2012, chapter 31 of the Statutes of Canada (also…
Read MorePEI Auto Accident Benefits – Behind the Times No More Nicole McKenna and Janet Clark Significant changes are coming to the standard automobile policy in Prince Edward Island (“PEI”), including increases to the accident benefits available under…
Read More