Nova Scotia Announces Solvency Funding Relief for DB Plans
Nova Scotia’s private defined benefit pension plans are set to benefit from an extension of the time required to make their plans fully solvent.
Under the new regulations recently announced by the Department of Labour and Workforce Development, plan administrators will have ten years to fund solvency deficiencies, as opposed to the normal five years, with permission from plan members. The regulations apply to plans reporting underfunding between December 30, 2008 and January 2, 2011. The regulations also permit plan administrators to file a new valuation in order to pay previous funding shortfalls over the new ten-year period.
The announcement follows the recommendation of the report of the Nova Scotia Pension Review Panel (PDF) to lengthen the amortization for funding solvency deficits from five to ten years. It also comes on the heels of temporary solvency funding relief announced in other provinces, including Ontario, where pension plan administrators can extend the amortization period to ten years for new solvency deficiencies only, with the consent of members and former members.
The new regulations are not yet available, but are expected to be incorporated into the Nova Scotia Pension Benefits Regulations shortly.
