An in-depth look at this and other subjects are covered in the current issue of the
- OSFI freezes defined benefit transfers and annuity purchases, extends regulatory deadlines – The Office of the Superintendent
of Financial Institutions (OSFI) has announced that it would implement certain regulatory adjustments in light of the extraordinary circumstances posed by the COVID-19 crisis. OSFI has announced a temporary freeze on portability transfers and annuity purchases relating to defined benefit provisions of pension plans. Additionally, the deadlines for certain actions and filing requirements under federal pension legislation have been extended. - FSRA releases COVID-19 response –
The Financial Services Regulatory Authority of Ontario (FSRA) has announced that it will be accepting requests for filing extensions of up to 60 days. While FSRA does not have power to extend prescribed timelines for producing member statements, it has indicated it will not be penalizing administrators for non-compliance with deadlines for the time-being. Quebec regulator introduces temporary relief measures – Retraite Québec has announced temporary measures to assist pension plan members and administrators in light of the COVID-19 outbreak. Retraite Québec will offer a three-month extension of the deadlines for certain regulatory obligations, require pension plans to consider the estimated the solvency level for payments to be made from defined benefit plans, and allow for additional temporary withdrawals from life income funds for individuals under 70.- Western provinces announce regulatory extensions – Pension regulators in several western provinces have announced regulatory extensions and other changes in light of the COVID-19 situation. The
Alberta regulator will also consider extensions for amortization periods for unfunded liabilities and/or solvency deficiencies and contribution remittances on a case-by-case basis. In addition, theSaskatchewan Superintendent of Pensions has announced a freeze on transfers and payments out of defined benefit plans. Atlantic pension regulators respond to COVID-19 – Pension regulators inNova Scotia ,New Brunswick andNewfoundland andLabrador have announced extensions for Annual Information Returns and Actuarial Valuation Report whose filing deadlines are upcoming.- Adoption of revised commuted value standards delayed – On
April 6, 2020 , theActuarial Standards Board of theCanadian Institute of Actuaries announced it would delay the adoption of its revised commuted value standards until at leastDecember 1, 2020 . The updated standards were published inJanuary 2020 and had been previously scheduled to become effective as ofAugust 1, 2020 . - Minimum RRIF and variable benefit withdrawals reduced for 2020 – On
March 25, 2020 ,Parliament passed Bill C-13, the COVID-19 Emergency Response Act (Bill C-13), which reduces the minimum withdrawal requirements for registered retirement income funds (RRIFs), life income funds (LIFs) and locked-in retirement income funds (LRIFs) by 25 per cent for 2020. The bill also reduces the minimum withdrawal amount for an individual member's variable benefit account under a defined contribution provision of a pension plan by 25 per cent. - Tracking the funded status of pension plans as at
March 31, 2020 –Morneau Shepell describes the funded status of pension plans sinceDecember 31, 2019 based on three typical investment portfolios. A graph shows the changes in the financial position of a typical defined benefit plan since the end of 2019. A table shows the impact of past returns on plan assets and the effect of interest rate changes on solvency liabilities of a medium duration pension plan. - The impact of pension expense under international accounting as at
March 31, 2020 –Morneau Shepell has shown the evolution of the pension expense for a typical defined benefit pension plan. Since the beginning of the year, the pension expense has decreased by 19 per cent (for a contributory plan) mainly due to the increase in the discount rates, despite the poor returns on assets (relative to the discount rate).
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