The New Regs
On May 11, 2015, the B.C. Government approved the new Pension Benefits Standards Regulation (the New Regs.). The New Regs. support the new Pension Benefits Standards Act, SBC 2012, c. 30. (the New Act) which was passed in the spring of 2012 and subsequently amended by Bill 10-2014, the Pension Benefits Standards Amendment Act.
The effective date of the Act and Regulations is September 30, 2015.
The new legislation reflects the changes recommended by the Joint Expert Panel on Pension Standards in their 2008 report. It has been drafted to be highly “harmonized” with the province of Alberta. Significant differences between the BC and Alberta Acts are only with respect to effective dates and with respect to differences required by differences in Family Law legislation.
In the sense that the legislation was passed over 3 years ago and we have had a good preliminary view of what the Regs. will look like based on the Alberta Regs., there are no great surprises. One thing that did surprise us to an extent was that the Regs. were adopted without the 6 month “exposure draft” period which had been mentioned by representatives of FICOM as a possibility.
The following are details of the main provisions of the new Act and Regulations:
Individual Pension Plans
Plans for Connected Members (more than 10% shareholders or related)
Plans for Connected Members are still exempt from registration with FICOM and do not need to meet any minimum funding requirements.
Plans for “Specified Individuals”
Specified Individuals are defined as individuals who earn more than 2.5 times the YMPE (Year’s Maximum Pensionable Earnings as defined in the CPP). Previously these plans had been exempt from registration with FICOM. Under the New Regs., plans for “specified individuals” will need to be registered with FICOM and they would be subject to provisions such as the minimum funding rules, if these plans are submitted to CRA for registration after Sept 30, 2015. Plans which were registered or submitted for registration with CRA prior to Sept 30, 2015 are still exempt from registration.
Registered Pension Plans (“RPPs”) in General
New provisions for all RPPs are:
LIRAs and LIFs
B.C. has adopted the use of the term “locked-in retirement account” or “LIRA.” The terms “locked-in registered retirement savings plan,” “locked-in RRSP” or “LIRRSP” will no longer be used. “Life Income Fund” or “LIF” will continue to be used. The requirements for offering LIRAs and LIFs will change, as BC harmonizes administrative procedures with Alberta.
This content is for general information only. As it is impossible to include all situations, circumstances and exceptions in a commentary such as this, a further review or study should be undertaken to the reader’s own situations and circumstances for compliance with the new B.C. Pension Benefits Standards Act and Regulations. Every effort has been made to ensure the accuracy of the information contained in this commentary. However, because of the nature of the subject, no person or firm involved in the preparation or distribution of this commentary accepts any liability for its contents or use.