Pensions & Benefits Law : Canada Pension & Benefits Lawyers & Attorneys : Osler Hoskin & Harcourt Law Firm: Post-Employment Benefits & Defined Benefit Plans : Toronto, New York

The U.S. Department of Labor (DOL) has issued a proposed regulation intended to expand the class of advisers considered to be fiduciaries of plans subject to ERISA (which includes all 401(k) and other tax qualified plans) and IRAs. 

The consequence will be to impose an obligation to act in the interest of participants and potential personal liability on a larger class of advisers, and potentially to change the practices of some broker-dealers and consultants who currently take the position that they are not fiduciaries. Investment advice includes advice as to the value of securities or other property, or advice or recommendations as to the advisability of buying or selling securities or other property. However, current law imposes a number of additional conditions for fiduciary status.

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In January 2009, the Québec Supplemental Pension Plans Act was amended to allow retirees and retirement eligible members, whose benefits cannot be settled in full following the termination of the pension plan of a bankrupt employer, to apply for the payment of their benefits through a pension paid by the Régie des rentes out of the assets of the plan (Bill 1).

The assets attributable to those who elect this new option are to be administered and invested by the Régie during a prescribed period and will then be used to purchase annuities at a time when the annuity market is hopefully more favourable. The Régie is thereby assuming the risk of a further deterioration in economic conditions.

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The New Brunswick government has followed the approach taken by other Canadian jurisdictions - Alberta, British Columbia, Ontario, Nova Scotia and the federal government -- announcing on October 28, 2010 that it will appoint an expert panel to study pensions. According to the government press release, the task force will consult with New Brunswickers on how to ensure that private sector pension plans are “protected and sustainable in the long-term”. Based on these consultations, the task force will make recommendations to the New Brunswick government. No timeline for the consultation was provided.

The government also indicated that public sector pension plans would be subject to a separate review.

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