Proposed Changes to the PBGF Assessment Formula
As part of the new funding framework for DB pension plans, the maximum monthly PBGF benefit will be increased from $1,000 to $1,500. On January 19, 2018, the Ministry of Finance released a regulatory proposal on related amendments to the PBGF assessment formula in Regulation 909. Comments are due by February 20, 2017. Proposed reforms would:
- Increase the current risk-based component in each of Tiers 1 through 3, by 50%
- Increase the current plant closure/permanent layoff benefit assessment component, from 2% to 3% of excluded liabilities
- Add a new component based on a plan's PBGF liabilities (i.e. solvency liabilities in respect of Ontario plan beneficiaries) of 0.015% to reduce PBGF assessment volatility
- Eliminate other assessment components, such as the basic $5 assessment per Ontario plan beneficiary and the $250 minimum assessment per plan, to reduce complexity.
Court Orders Partial Assignment of Pre-Retirement Death Benefit to Member’s Dependent Child
In Cotnam v. Rousseau, the Ontario Superior Court of Justice ordered that one-half of the deceased member’s pre-retirement death benefit, valued at $368,288 and initially granted to his surviving spouse, be attributed back to the member’s estate and then assigned to his adult dependent child. Despite jurisprudence supporting the spouse’s position (including Carrigan v. Carrigan Estate) the Court held that allowing her to retain the entire benefit would have thwarted the balancing of interests between spouses and other dependants, as mandated by Part V of the Succession Law Reform Act.
Also of Interest – CAPSA Remittance of Contribution Notification Checklist
The Canadian Association of Pension Supervisory Authorities has released its final Remittance of Contribution Notification Checklist that can be used to report contribution remittance issues. CAPSA encourages all pension industry stakeholders to use the Checklist. In addition, the Checklist includes two supporting tables (current to August 2017):
- Notification of Late or Incorrect Contributions Requirements by Jurisdiction, which sets out the legislated notice requirements for late or non-remittance; and
- Contribution Remittance Timeframes – Requirements by Jurisdiction, which sets out the timeframes and requirements for remitting various types of contributions and payments
CAPSA had launched a consultation on this topic in January 2016.
Also of Interest – Revised CAPSA Governance Self-Assessment Questionnaire
The Canadian Association of Pension Supervisory Authorities has revised its Pension Plan Administrator Governance Self-Assessment Questionnaire (a component of CAPSA Guideline No. 4: Pension Plan Governance, which was updated in 2017).
There are two related changes in the updated version of the Questionnaire. Existing item c) under Principle 10: Code of conduct and conflict of interest, was split into c) and new item d), which now asks: “Do you have processes in place to receive appropriate disclosure from your delegates of conflicts and any breaches of the code of conduct” (words in italics were added).