Newfoundland and Labrador – Teachers’ pension reforms

On June 23, 2015, the Newfoundland and Labrador House of Assembly passed Bill 15, An Act to Amend the Teachers’ Pensions Act. Combined with the PSPP reform of fall 2014, the province has two major plans within the public service reformed. The bill amends the Teachers' Pensions Act to initiate pension reform measures including:

• A two per cent increase in member contribution rates, with a matching increase in government contributions
• A suspension of pension indexing, which had reflected 60 per cent of the CPI annual change to a maximum of 1.2 per cent
• An increase in the number of years used to compute the pensionable salary (best eight years of earnings, up from best five)
• A change in deferred pension activation date from age 60 to 62, for teachers with less than 24.5 years service
• A framework for a joint sponsorship agreement and a new corporate administrator and trustee of the fund, to which the government plans to deliver a $1.8-billion promissory note with a 30-year repayment schedule

New Brunswick – Upcoming changes in required forms

New Bill 41, proposed May 26, 2015 and passed June 2, 2015, amends the New Brunswick Pension Benefits Act to allow the Superintendent to prescribe changes in the required form of applications and documents, including electronic documents. The amendments also enable the Superintendent to regulate withdrawal of commuted value of retirement savings arrangements, and registration of financial institutions acting as a trustees for a retirement savings arrangement.

Nova Scotia

(a) New Pension Benefits Act and regulations in force

The new Nova Scotia Pension Benefits Act came into force in large part on June 1, 2015, on the same date as the accompanying Pension Benefits Regulations. Largely based on the Ontario model, the new Act and Regulations will expand the types of pension plans available, clarify funding rules, and increase disclosure required to be provided to plan members. The Act was originally released as Bill No. 96 in 2011, and has been amended twice (here and here) since as a result of public consultations.

Plan administrators must make all necessary amendments to bring plans into compliance by June 1, 2018. However, plans must be administered according to new Regulations effective June 1, 2015.

(b) Draft PRPP Regulations and addition of transfer options

On December 18, 2015, amendments to the Pooled Registered Pension Plans Act received royal assent, under Bill No. 126. The approach under the Nova Scotia PRPP Act, introduced in November 2014, is to largely incorporate the Federal Pooled Registered Pension Plans Act (Canada) with necessary changes.

The amendments introduced two new transfer options to the PRPP Act:

• The ability to transfer funds from a PRPP to a prescribed locked-in vehicle, such as a locked-in retirement account
• A process for transferring funds as a result of division of assets, for example as the result of a relationship breakdown, from the member’s PRPP account to the spouse’s PRPP, pension plan, locked-in retirement savings arrangement, or life annuity

Earlier, on September 9, 2015, the Nova Scotia Department of Finance and Treasury Board had published its draft PRPP Regulations for public consultation. The proposed regulations largely mirror the federal regulations.

Differences include:

• The definition of spouse accords with the Nova Scotia Pension Benefits Act definition
• PRPP funds may be transferred to a LIRA, LIF or life annuity, but not an RRSP
• An administrator must register all of their PRPPs under the federal Act before they can be licensed in Nova Scotia

The draft regulations and FAQ published by the Nova Scotia Department of Finance and Treasury Board can be found here.

(c) New University Pension Plans Transfer Act

On May 4, 2015, the Nova Scotia legislature passed the new University Pension Plans Transfer Act, which allows for university pensions to be transferred to the Public Service Superannuation Plan. Enacted to facilitate a transfer agreement between Acadia University and its plan members, The Act could be beneficial to other universities, particularly those with defined benefit pension plans.

Dante Manna is an associate and Level Chan is a partner with Stewart McKelvey in Halifax.