{"id":18528,"date":"2020-05-29T08:30:14","date_gmt":"2020-05-29T12:30:14","guid":{"rendered":"https:\/\/www.benefitscanada.com\/news\/acpm-calling-for-made-in-alberta-pension-measures-due-to-financial-impact-of-coronavirus-146348"},"modified":"2020-05-29T08:30:14","modified_gmt":"2020-05-29T12:30:14","slug":"acpm-calling-for-made-in-alberta-pension-measures-due-to-financial-impact-of-coronavirus","status":"publish","type":"post","link":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/2020\/05\/29\/acpm-calling-for-made-in-alberta-pension-measures-due-to-financial-impact-of-coronavirus\/","title":{"rendered":"ACPM calling for \u2018made-in Alberta\u2019 pension measures due to financial impact of coronavirus"},"content":{"rendered":"
\n
<\/div>\n<\/p><\/div>\n

Staff<\/span> | May 29, 2020 <\/p>\n

The Association of Canadian Pension Management\u2019s Alberta regional council is highlighting the need for \u201cmade-in-Alberta\u201d measures focused on pension plan sponsors, administrators and members due to the financial impact of the coronavirus pandemic.<\/p>\n

In a submission to the provincial government, the council listed recommendations around pension contributions and funding, commuted values, plan administration, defined contribution plans and the Canadian Association of Pension Supervisory Authorities\u2019 agreement on multi-jurisdictional pension plans.<\/p>\n

\u201cCurrently, Alberta employers critically need to conserve cash in order to survive the current economic crisis,\u201d said the letter. \u201cHowever, we expect a number of pension plan sponsors and employers will not survive and become insolvent in the short term, which raises heightened concern among our members for the security of pension benefits accrued under the affected pension plans.\u201d<\/p>\n

Read: An overview of Canadian DB pension relief measures during coronavirus<\/a><\/strong><\/p>\n

For the funding of pension plans, its recommendations in the short term included: the continuation of ongoing contributions, covering current service and going-concern special payments, to promote liquidity and benefit security; the deferral of special payments on a solvency basis, at the option of the plan sponsor, based on certain conditions; allowing plan sponsors that are committed to filing a valuation to immediately suspend contributions until the valuation is filed, then allow a catch-up contribution to be remitted; and guidance from the regulator indicating that plans amended to temporarily cease benefit accruals won\u2019t trigger a plan windup.<\/p>\n

In terms of commuted values, the ACPM\u2019s Alberta regional council recommended that the government implement a temporary full freeze, potentially for a 90-day period, on portability transfers and annuity buyout purchases relating to defined benefit provisions of pension plans.<\/p>\n

Other Canadian jurisdictions have moved forward with similar changes, including the Financial Services Regulatory Authority of Ontario, which recently issued guidance<\/a> on transferring commuted values and purchasing annuities when a pension plan\u2019s transfer ratio has declined since the most recently filed valuation report by 10 per cent and is now below 0.9.<\/p>\n

Read: FSRA issues new guidance for pension plans transferring commuted values, purchasing annuities<\/a><\/strong><\/p>\n

The letter also included recommendations to ease the challenges on pension plan administrators. It suggested that the Alberta government enact legislation allowing electronic communications. This would include that all forms required to administer the plan could be submitted electronically with electronic signatures.<\/p>\n

It also recommended easing pension plan administration by extending filing deadlines, postponing the triennial governance self-assessment requirement until 2021 and amending the regulations to temporarily eliminate witness signature requirements for prescribed forms.<\/p>\n

In terms of the balance between protecting plan members from financial hardship in the short term and protecting their retirement income, the ACPM\u2019s Alberta regional council recommended that the federal Income Tax Act be changed to raise the mandatory retirement income commencement from age 71 to 75 to provide a minimum temporary relief.<\/p>\n

Read: Market corrections and the retirement savings withdrawal dilemma<\/a><\/strong><\/p>\n

For DC plans, the submission recommended that the provincial government: permit the complete suspension of employer and employee contributions for non-negotiated plans; amend the regulations to shorten or eliminate the advance notice period required for amendments reducing contribution rates; ensure any temporary changes to the contribution holiday rules continue to permit hybrid plans to use DB surplus to offset employer DC contribution obligations; and provide regulatory support for temporary adjustments to collectively bargained contribution rates.<\/p>\n

Lastly, the submission highlighted that Alberta should sign the CAPSA\u2019s agreement respecting multi-jurisdictional pension plans. In 2016, the governments of British Columbia, Saskatchewan, Ontario, Quebec and Nova Scotia signed the agreement.<\/p>\n

\u201cAs you know, the regulation of multi-jurisdictional pension plans is currently subject to a patchwork of agreements between different jurisdictions in Canada, which results in complexity and legal uncertainty that adds to the administrative burden on administrators already straining to cope with the challenges of the pandemic,\u201d noted the letter. \u201cThe 2016 agreement is currently being revised by the CAPSA to address, among other things, certain key funding issues.<\/p>\n

\u201cIt is anticipated by the CAPSA that all jurisdictions will sign the new agreement. It is our strong recommendation that Alberta make every effort to do so as well. Any failure to sign the agreement, especially if all other Canadian jurisdictions proceed, will greatly complicate the administration and regulation of multi-jurisdictional pension plans registered in Alberta and put an unnecessary burden on administrators.\u201d<\/p>\n

Read: Employers permitted to suspend DC pension contributions, says FSRA<\/a><\/strong><\/p>\n

Read the full article at BenefitsCanada.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Staff | May 29, 2020 The Association of Canadian Pension Management\u2019s Alberta regional council is highlighting the need for \u201cmade-in-Alberta\u201d measures focused on pension plan sponsors, administrators and members due to the financial impact of the...<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/18528"}],"collection":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/comments?post=18528"}],"version-history":[{"count":0,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/18528\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=18528"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=18528"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=18528"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}