Federal Pension Reform Comes Into Force
Certain provisions of Bill C-9, last year's Budget Bill, which amended the federal Pension Benefits Standards Act (PBSA), have been proclaimed in force.
As noted in an earlier blog post, Bill C-9 included a number of significant amendments to the PBSA related to funding, plan wind-ups, vesting, and plans at risk. Briefly, the sections coming into force as of April 1, 2011 relate to:
- an employer's ability to use letters of credit in lieu of solvency payments;
- the ability of employers and plan members to agree to "workout schemes" (i.e., short moratoriums on deficit payments and changes to pension arrangements) where the employer is unable to meet the statutory funding requirements;
- the rights of members, former members and certain others to new types of plan information (e.g., actuarial reports, and documents related to workout schemes and letters of credit);
- the Superintendent’s authority to appoint a replacement administrator in insolvencies and certain other circumstances; and
- payments required on plan termination.
Effective July 1, 2011, provisions related to immediate vesting of benefits will come into force.
