In our most recent posts, we highlighted some of the regulatory relief available to administrators of Ontario registered pension plans and plans registered in jurisdictions other than Ontario as a result of COVID-19. In this post, we highlight additional relief measures that have been announced for administrators and sponsors of registered pension plans, including the announcement of significant funding relief for sponsors of federally regulated defined benefit registered pension plans.
On April 15, 2020, the federal government announced that it will be providing immediate temporary relief to sponsors of federally regulated defined benefit registered pension plans in the form of a moratorium on solvency payments under such plans through the remainder of 2020. Recognizing the potential impact that the COVID-19 crisis could have on defined benefit plan assets and liabilities and solvency funding obligations under such plans in 2021, the federal government also indicated that it will consult with stakeholders over the coming months to provide relief from 2021 funding obligations, as necessary.
The announcement follows the previous measures for federally registered pension plans announced by the federal pension regulator, the Office of the Superintendent of Financial Institutions, in response to the COVID-19 crisis. These include the announcement of a full freeze on portability transfers and annuity purchases related to defined benefit provisions of federally registered pension plans and various filing deadline extensions for administrators of all federally registered pension plans.
It is the most significant relief measure announced to date for sponsors of registered pension plans in response to the COVID-19 crisis in Canada. The announcement is a welcome measure for employers that sponsor federally registered defined benefit pension plans and is intended to help those employers maintain such plans which, in turn, it is hoped will help protect the retirement security of plan members. The funding relief is part of the broader actions that the Canadian federal government has taken in its attempt to support Canadian businesses during the COVID-19 crisis.
It is, however, of limited application as it applies only to federally regulated defined benefit registered pension plans. As of the date of this post, the federal government is the first and only Canadian jurisdiction to expressly provide plan sponsors with funding relief in response to the COVID-19 crisis. It is hoped that the Canadian provinces will soon follow with similar relief measures for sponsors of provincially regulated pension plans.
Consistent with the approach adopted by other provinces to extend certain filing deadlines for administrators of registered pension plans, the New Brunswick Financial and Consumer Services Commission recently announced that the Superintendent of Pensions has exercised her discretion under the Pension Benefits Act (New Brunswick) (“NBPBA”) to extend the time limit for filing any annual information return and actuarial valuation report due to be filed by April 30, 2020 by 30 days. Under the NBPBA, the Superintendent may extend any time limit in the legislation if she is satisfied that reasonable grounds exist for the extension. According to the announcement, the Superintendent is satisfied that the state of emergency declared in the province of New Brunswick is reasonable grounds to extend such time limits.
It is expected (hoped) that additional relief for administrators and sponsors of registered pension plans will be announced in the coming days. For further information or to discuss your obligations as a plan sponsor or administrator, please contact Kim Ozubko at firstname.lastname@example.org or (416-597-4338), and subscribe to our A.M. Pension Blog series to stay informed on the latest developments.
Miller Thomson is closely monitoring the COVID-19 situation to ensure that we provide our clients with appropriate support in this rapidly changing environment. For articles, information updates and firm developments, please visit our COVID-19 Resources page.