Changes to Alberta’s pension regulations will come into effect this fall.
The Employment Pension Plans Act aims to provide more flexibility to private sector pension plans and improve long-term stability, as well as encouraging the establishment of new plans, according to the provincial government.
“Attractive features of the legislation include its promotion of innovation in plan design, more flexible funding rules and reduced administrative complexity,” said Chris Brown, the former Alberta chair of the Joint Expert Panel on Pension Standards and current partner at Blake, Cassels & Graydon LLP.
Regulation would establish funding rules for private sector pension plans that lean towards a target benefit model on a go-forward basis only.
While the legislation was passed in 2012, the cabinet only approved it on July 22.
“Private sector plan sponsors such as employers and unions have expressed concern about the long-term viability of their plans and have demanded more flexibility,” said Doug Horner, the province’s finance minister. “To further delay proclaiming this act and its regulation would be irresponsible to the many organizations across Alberta who are eagerly awaiting it.”
Key items in the new legislation include:
More flexible rules for the establishment of different types of plans and discussion on new ideas for plan rules on how to fund target benefit plans
Rules for unlocking of benefits for circumstances noted in the act
New disclosure rules that have been revised to be more plan type specific and expanded to provide information to more interested parties
Clarification of the roles and functions of the administrator, fund holder and participating employers
Some specific rules related to the establishment and maintenance of funding and governance policies
- Rules for enforcement, including limits on fees and penalties and establishment of the Alberta Pension Tribunal.
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