The cases of Richardson Estate v. Mew and Tower Estate v. Tower Estate considered whether a provision in a separation agreement can revoke a prior beneficiary designation. In Orpin v. Littlechild, at issue was a provision included in the will of the deceased, and whether it had the effect of revoking a prior beneficiary designation made under an insurance policy.
Continue Reading...Shortly (eight days) after a series of transactions under which Imasco Inc.’s Shoppers Drug Mart business was transferred to Shoppers Drug Mart Inc. (Shoppers) and then sold (share sale) to institutional investors, Mr. Boys’ employment with Shoppers was terminated. As part of the transactions, Boys’ retained his accrued seventeen year pension under the Imasco pension plan and joined a new successor pension plan established in 2000 for executive employees by Shoppers (the Shoppers Plan). The Shoppers Plan was designed under a “wrap around” arrangement to provide substantially comparable benefits to those provided under the Imasco plan.
Continue Reading...In prior blog posts, (see posts from October 26, 2010 and July 15, 2011) I have described new participant fee and investment disclosure requirements that will apply to 401(k) plans and other participant-directed defined contribution plans beginning May 31, 2012. Many participants will learn for the first time the fees they are paying for services such as investment management, custody and record-keeping when the new regulations become effective.
Continue Reading...Following its introduction of Bill C-25 on November 17, 2011 (see my prior blog post), the federal government released for consultation a package of draft legislative proposals under the Income Tax Act to accommodate the creation of Pooled Registered Pension Plans (PRPPs) within the basic system of rules and limits currently applicable to registered pension plans (RPPs) and RRSPs. It is anticipated that the introduction of these new tax rules will “set the stage” for provincial legislation required to implement PRPPs beyond federal “included employment”.
The stated objectives of the tax proposals are to put in place PRPP rules which are “simple and straightforward to promote low-cost plans, take-up by employers and pension coverage among Canadians”.
Continue Reading...On November 15, 2011 Nova Scotia introduced Bill 96, An Act Respecting Pension Benefits, for first reading. If passed, the current Nova Scotia Pension Benefits Act would be repealed and replaced in its entirety by Bill 96.
Continue Reading...The Supreme Court of Canada has granted leave to appeal the decision of the Ontario Court of Appeal in Re Indalex.
In its April 2011 ruling, the Court of Appeal held that the entire amount an employer is required to contribute to fund a pension plan wind-up deficiency under the Ontario Pension Benefits Act (PBA) is subject to the deemed trust provisions of the PBA and, in the circumstances, should be paid in priority to outstanding secured creditor claims. A detailed account of the facts is available in a previous Osler Update relating to the Ontario Court of Appeal decision.
Continue Reading...When restricted stock is transferred to a U.S. taxpayer in connection with the performance of services, Internal Revenue Code Section 83(b) allows the recipient to accelerate the taxable event to the time of transfer, rather than the time that restrictions lapse (vesting). If the taxpayer makes a Section 83(b) election, which is required to be filed with the Internal Revenue Service, then the compensatory element of the stock grant is closed so that ordinary income is recognized at the time of grant. All future growth or loss in the value of the stock is eligible for capital gains or loss tax treatment, even though the stock remains subject to forfeiture. Section 83(b) elections are frequently made by founders or executives of growth companies or start-ups when the value of the stock is very low at the time of grant.
Continue Reading...Back in 2009, the Quebec government adopted measures to alleviate the effects of the 2008 financial crisis on the funding of defined benefit (DB) plans. These measures allowed an employer to instruct a plan’s pension committee to implement one or more of the following measures for the first complete actuarial valuation dated after December 30, 2008:
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Following up on the consultation paper it released last December, the federal government introduced Bill C-25: the Pooled Registered Pension Plans Act (Bill C-25) yesterday. Bill C-25 sets out a legal framework for the establishment and administration of pooled registered pension plans (PRPP).
Continue Reading...The Canadian Association of Pension Supervisory Authorities (CAPSA) has been working away at providing pension plan administrators with guidance regarding pension plan investing and funding. As we reported earlier, CAPSA released draft guidelines this past spring. Those guidelines were released on November 15, 2011 in final form: Guideline No.6 – Pension Plan Prudent Investment Practices Guideline (the Investment Guideline) and Guideline No.7 – Pension Plan Funding Policy Guideline (the Funding Policy Guideline).
These guidelines are intended to build on the principles of pension plan governance established by CAPSA Guideline No.4 – Pension Plan Governance Guideline.
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