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New Brunswick regulator seeks input on revised proposed rule under Unclaimed Property Act

Christopher Marr, TEP and Level Chan with the assistance of Annelise Harnanan (summer student)

On May 20, 2021, the New Brunswick Financial and Consumer Services Commission (“FCNB”) released a revised version of one of its proposed rules (“Revised Rule”) under the Unclaimed Property Act (“the Act”). As detailed in our previous client update, the Act aims to reconnect New Brunswickers with their forgotten or lost assets, and to release holders of lost assets from any liability with respect to those assets, by allowing lost assets to be transferred to the Director of Unclaimed Property. The Act received Royal Assent in March 2020 and will come into force once the associated rules are finalized.¹

FCNB first published draft rules for comment in September 2020, and received 14 comments from businesses and other organizations. The Revised Rule was prepared by FCNB in response to those comments, and includes the following significant changes:

Changes to the categories of property that are excluded from application of the Act

  • Property held in a safe deposit box by a provincially regulated credit union, trust company, caisse populaire or federal financial institution, was clarified to include all property held in safekeeping by any of the foregoing institutions (s. 3(1)(c)).
  • Property that is an insurance policy and is deemed non-payable due to an exclusion permitted by the Insurance Act, and property that is held by a federal institution as defined in the Canada Deposit Insurance Corporation Act (Canada) were added as new categories of excluded property (s. 3(f) and (g)).

Distinguishing between registered accounts and non-registered accounts

  • The time periods for property to be considered unclaimed set out in Section 5 of the Revised Rule now treat property held in a registered plan and property held outside of registered plans as distinct categories (s. 5(1)-(2)). A period of three years remains the general rule, however the Revised Rule clarifies when that period starts.

Increasing the fair market value of property that is not required to be reported or delivered

  • The Revised Rule increases the baseline amount for when holders of unclaimed property do not need to submit an unclaimed property report or deliver the associated unclaimed property to the Director of the new program to $1,000. Now, under s. 6(1), a holder may not have to submit a report or deliver the unclaimed property if:
  1. the total fair market value of the property from the previous five years is less than $1,000; and
  2. each individual property has a fair market value of less than $50.

Amendments adding registered disability savings plans and tax-free savings accounts

  • Other registered accounts, such as tax free savings accounts and registered disability savings plans, were added to the Revised Rule (s. 5(2)).

With respect to registered pension plans, the Revised Rule continues to provide that the Act only applies to a wound-up pension plan but not an ongoing pension plan. FCNB said they may consider measures for ongoing pension plans at a later date. The Revised Rule also continues to exclude benefits from an ongoing accident, disability or sickness insurance policy.

FCNB has invited stakeholders to submit their comments on the Revised Rule during a 30-day period, ending on June 19, 2021. Written submissions may be sent to:

Secretary
Financial and Consumer Services Commission
85 Charlotte Street, Suite 300
Saint John, N.B.   E2L 2J2
Telephone:    506‐658‐3060
Toll Free:   866‐933‐2222
Fax:     506‐658‐3059
E‐mail:    information@fcnb.ca


This article is provided for general information only. If you have any questions about the above, please contact a member of our Pensions & Benefits Group.

 

Click here to subscribe to Stewart McKelvey Thought Leadership.


¹ See this note published by the FCNB regarding unclaimed property.

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