Client Update: New Nova Scotia pension plan asset transfer regulations
Peter McLellan, QC and Level Chan
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.
Archive
*Flowchart below last updated June 2, 2020 (Originally published April 14, 2020) Dante Manna With the passing of Bill C-14, the COVID-19 Emergency Response Act, No. 2 on April 11, 2020, the federal government has…
Read MoreBurtley Francis Recently, the Government published for public comment draft legislation referred to as the Time Limits and Other Periods Act (COVID-19). The underlying purpose of the draft legislation, which was published on May 20,…
Read MoreMark Tector and Katharine Mack The province of Nova Scotia announced today that most sectors of the economy may begin to reopen. Provincial grant funding was also announced to help businesses open safely, as well as…
Read MoreBrian Tabor, QC, Ryan Baker, and Madeleine Coats On April 16, 2020, Prime Minister Justin Trudeau announced the beginning of a new piece to the COVID-19 federal economic response package – this time, in the…
Read MoreChad Sullivan and Clarence Bennett As many employers resume operations during the ongoing pandemic, we have prepared a list of FAQs and a reopening checklist for businesses operating in Atlantic Canada. Do employers need to…
Read MoreDaniela Bassan, QC Using its COVID-19 Protocol, the English Technology and Construction Court (TCC) handed down remotely a decision about the role of experts in international arbitration and how multiple retainers by a global firm…
Read MoreRuth Trask On a typical, “normal” day in many Canadian households, adults leave home to go to work, and kids attend school or perhaps daycare. As we keep hearing, though, these are far from “normal”…
Read MoreMaurice Chiasson, QC The Federal Court of Appeal released its decision in The Toronto-Dominion Bank v. Her Majesty the Queen on Apr. 29, 20201. This decision confirms the earlier ruling of the Federal Court in…
Read MoreClarence Bennett and Chad Sullivan The May 8, 2020 announcement On Friday, May 8, 2020, the New Brunswick Government made a significant announcement that the province was moving into the second phase of NB’s four…
Read MoreTo our clients who have been innovating to protect our communities, from all of us here at Stewart McKelvey, we thank you and are proud of your efforts. As we grapple with the profound impact…
Read More