FEDERAL REG

SOR/2016-205: Regulations Amending the Pension Benefits Standards Regulations, 1985

REGISTRATION OF FEDERAL REGULATION - VIA OIC DATABASE, PRIOR TO PART II OF THE GAZETTE

Registered
June 30, 2016


REGULATORY IMPACT ANALYSIS STATEMENT (This statement is not part of the Regulations.) Issues The federal Pension Benefits Standards Act, 1985 (PBSA) and its Regulations, the Pension Benefits Standards Regulations, 1985 (PBSR), set out minimum standards for private registered pension plans sponsored by employers in industries that are federally regulated, such as navigation and shipping, banking, ... (Click for more)


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Published on June 30, 2016

Bill Summary

SOR/2016-205: Regulations Amending the Pension Benefits Standards Regulations, 1985

REGULATORY IMPACT ANALYSIS STATEMENT (This statement is not part of the Regulations.) Issues The federal Pension Benefits Standards Act, 1985 (PBSA) and its Regulations, the Pension Benefits Standards Regulations, 1985 (PBSR), set out minimum standards for private registered pension plans sponsored by employers in industries that are federally regulated, such as navigation and shipping, banking, interprovincial transportation and communications, as well as employment in the Yukon, the Northwest Territories and Nunavut. Under the PBSA, the Minister of Finance has the authority, subject to the approval of the Governor in Council, to enter into agreements with designated provinces respecting matters related to pension plans with both federal and provincial members. For the purposes of the PBSA, a designated province is currently one in which there is in force a law substantially similar to the PBSA (e.g. a law that sets similar minimum funding standards for similar types of pension plans). Section 3 of the PBSR prescribes the designated provinces as Newfoundland and Labrador, Nova Scotia, New Brunswick, Quebec, Ontario, Manitoba, Saskatchewan, Alberta and British Columbia. In 2010, the Sustaining Canada’s Economic Recovery Act, the second Budget 2010 implementation act, which received royal assent on December 15, 2010, amended the definition of “designated province.” The amendment was in recognition of the fact that many provinces had developed or were in the process of developing new and innovative pension plan frameworks with features that may not be considered compatible with the provisions of the PBSA and, therefore, the provincial pension legislation may no longer be considered substantially similar to the PBSA. For example, some provincial pension legislations have been amended to allow for pension plans with features (e.g. benefits that are not guaranteed or different funding requirements) that may not be considered to be compatible with the provisions of the PBSA. The amended definition is broader, as it defines a designated province as one in which there is in force pension legislation applicable to private pension plans. Objectives The objective of this amendment is to enable the amended definition of “designated province” in the PBSA to be operationalized once subsection 179(1) of the Sustaining Canada’s Economic Recovery Act is in force. The amended definition of “designated province” will be brought into force on the same day as this regulatory amendment. Description The Regulations Amending the Pension Benefits Standards Regulations, 1985 amend section 3 of the PBSR, which prescribes the designated provinces for the purposes of the definition of “designated province” in the PBSA. In particular, the amendments will remove the reference in section 3 to a designated province having pension legislation in force that is substantially similar to the PBSA in order to align it with the amended definition of “designated province” in the PBSA. The prescribed provinces are the same as are currently prescribed in the PBSR (Newfoundland and Labrador, Nova Scotia, New Brunswick, Quebec, Ontario, Manitoba, Saskatchewan, Alberta and British Columbia). “One-for-One” Rule The “One-for-One” Rule does not apply, as the amendment does not result in administrative costs to business. Small business lens The small business lens does not apply, as the amendment does not impose costs on small business. Consultation The Office of the Superintendent of Financial Institutions, the entity responsible for administering the PBSA and PBSR, has been consulted and is supportive of this amendment. Rationale The PBSA requires that provinces be designated by regulation in order to allow the Minister of Finance to enter into agreements with respect to pension plans with federal and provincial members. This amendment is required to enable the amended definition of “designated province” in the PBSA to be operationalized once it is brought into force through an order in council. The Order in Council bringing these legislative amendments into force will be brought into force on the day the Order is made, and this regulatory amendment will be brought into force on the same day. The amended definition of “designated province” will allow the Minister of Finance, subject to the approval of the Governor in Council, to enter into agreements concerning pension plans that include both federal and provincial members with designated provinces that have developed new and innovative pension plan frameworks which might not be considered to be compatible with the PBSA, and whose pension legislation may no longer be considered to be substantially similar to the PBSA as a result. Contact Lisa Pezzack Director Financial Systems Division Department of Finance 90 Elgin Street, 13th Floor Ottawa, Ontario K1A 0G5 Email: [email protected] Footnote a S.C. 2012, c. 16, s. 89 Footnote b R.S., c. 32 (2nd Supp.) Footnote 1 SOR/87-19

This Bill does not amend any statutes.

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