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
As many of you will now know, the Nova Scotia Government introduced legislation on Friday, December 6, 2013, amending provisions of the Nova Scotia Trade Union Act dealing with First Contract Arbitration. This client update sets out…
Read MoreIn a decision that will largely be of interest to international organizations that have been granted some type of immunity in Canada, the Supreme Court of Canada (SCC) has confirmed that international organizations enjoy immunity…
Read MoreThe Prince Edward Island (“PEI”) legislature has proposed changes to the PEI Human Rights Act to add “gender expression” and “gender identity” as new protected grounds of discrimination. First introduced on November 13, 2013 the…
Read MoreWe previously circulated a client update regarding contemplated changes to automobile insurance in Prince Edward Island. Government has now published a consultation paper (www.gov.pe.ca/photos/original/eljautoinreform.pdf), seeking responses in writing on or before December 2, 2013. According to the consultation…
Read MoreThe Association of Caribbean Corporate Counsel (ACCC) released the inaugural edition of its quarterly journal, Caribbean Corporate Counsel, featuring CEO, John Rogers, Q.C., advisor on the International Advisory Board, and an article by partner Paul Smith, entitled “Governance…
Read MoreCHANGES, CHANGES AND MORE CHANGES: KEEPING UP WITH THE TEMPORARY FOREIGN WORKER PROGRAM These days, Canada’s Temporary Foreign Worker Program (“TFWP”) is more top of mind than ever for Canadian employers. This is in part…
Read MoreBy October 17, 2014 existing not-for-profit corporations incorporated under Part II of the Canada Corporations Act (the “Old Act”) are required to be continued under the new Canada Not-for-Profit Corporations Act (the “New Act”) or face the possibility of automatic administrative…
Read MoreIN THIS ISSUE: Reasonable Cause: A necessary prerequisite for random alcohol testing policies by Mark Tector, Steve Carpenter, CHRP, Melissa Everett Withers, Ruth Trask Business Succession: Why is it critical? by Richard Niedermayer, TEP Privacy Please: Nova Scotia brings in new…
Read MoreOn May 19, 2011, Nova Scotia’s Labour Standards Code was amended to protect foreign workers from exploitation by recruiters and employers. These amendments imposed a requirement for third-party recruiters to obtain a license from the Province to…
Read MoreFacts This appeal arose from a decision which held that the Dominion of Canada General Insurance Company (“Dominion”) has a duty to defend Larry and Lona Hannam and their teenage son Jordan in an action…
Read More