{"id":19804,"date":"2020-10-08T15:15:16","date_gmt":"2020-10-08T19:15:16","guid":{"rendered":"https:\/\/www.benefitscanada.com\/news\/nl-urged-to-include-plan-sponsors-in-new-pension-unlocking-rules-150801"},"modified":"2020-10-08T15:15:16","modified_gmt":"2020-10-08T19:15:16","slug":"nl-urged-to-include-db-plan-sponsors-in-new-pension-unlocking-rules","status":"publish","type":"post","link":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/2020\/10\/08\/nl-urged-to-include-db-plan-sponsors-in-new-pension-unlocking-rules\/","title":{"rendered":"NL urged to include DB plan sponsors in new pension unlocking rules"},"content":{"rendered":"
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Staff <\/span> | October 8, 2020 <\/p>\n

While the Association of Canadian Pension Management is urging the Newfoundland and Labrador government to introduce legislative amendments to facilitate pension unlocking in cases of financial hardship, it also suggests this move should include plan sponsors.<\/p>\n

In response to the provincial government\u2019s questionnaire on the topic, the ACPM recommended that locked-in retirement accounts, life income funds and locked-in retirement income funds be eligible for unlocking provisions.<\/p>\n

In addition, it said unlocking provisions be permitted in defined benefit pension plans, an option not included in the questionnaire, with the caveat that this shouldn\u2019t be an unfettered right, suggesting \u201cany unlocking should only be if the sponsors to such plan amend the plan to permit any unlocking.\u201d<\/p>\n

Read: Sounding Board: Governments must ease burden on pension plans in era of coronavirus<\/a><\/strong><\/p>\n

The association noted that unlocking under financial hardship is contrary to its general principle that funds remain locked in until pension plan members reach retirement age, but it also acknowledged the policy rationale for offering this exception. It also referred to other jurisdictions \u2014 British Columbia, Alberta, Ontario and Nova Scotia \u2014 which permit unlocking due to financial hardship.<\/p>\n

\u201cTherefore, this change would provide harmony with other jurisdictions, which would be supported by ACPM.\u201d<\/p>\n

The questionnaire also asked how often an individual should be allowed to unlock due to financial hardship, with the ACPM responding it should only be triggered by specific events. To the question of how much should be eligible for unlocking, the ACPM suggested 50 per cent to be consistent with other jurisdictions.<\/p>\n

Read: FSRA responds to questions on filing deadlines, pension transactions<\/a><\/strong><\/p>\n

Speaking further to consistency, the association noted it promotes the harmonization of locking-in rules to avoid unnecessary complexity. \u201cAlthough unlocking provisions for financial hardships are not identical across the jurisdictions . . . , there are several general provisions noted in all pension standards legislation for British Columbia, Alberta, Ontario, Nova Scotia and the federal jurisdiction that Newfoundland and Labrador should strongly consider adapting to ensure harmonization.\u201d<\/p>\n

Specifically, these include financial hardship provisions related to rental or mortgage default, medical or disability expense costs and low income, generally defined as less than two-thirds of the year\u2019s maximum pensionable earnings or three-quarters at the federal level.<\/p>\n

\u201cIncorporating these general categories into Newfoundland and Labrador pension legislation and aligning with other jurisdictions\u2019 definitions of these terms allows for continued harmonization.\u201d<\/p>\n

The consultations on unlocking pensions ended Sept. 30, 2020. The Department of Digital Government and Service NL are currently in the process of reviewing the comments and feedback, which it will share on its website.<\/p>\n

Read: Newfoundland and Labrador amends Pension Benefits Act<\/a><\/strong><\/p>\n

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

Staff  | October 8, 2020 While the Association of Canadian Pension Management is urging the Newfoundland and Labrador government to introduce legislative amendments to facilitate pension unlocking in cases of financial hardship, it also suggests this move...<\/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\/19804"}],"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=19804"}],"version-history":[{"count":0,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/19804\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=19804"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=19804"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=19804"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}