LIFEWORKS INC. An in-depth look at this and other subjects covered in the current issue of the
British Columbia amends Pension Benefits Standards Regulation –British Columbia has amended its Pension Benefits Standards Regulation to increase going concern funding requirements and reduce solvency requirements for provincially regulated defined benefit pension plans. The amendments also permit single employers to offer target benefit plans on a go-forward basis. The new funding framework applies to actuarial valuations with effective dates on or afterDecember 31, 2019 .Ontario permits variable benefits in DC pension plans – OnJanuary 1, 2020 , new variable benefit rules came into effect inOntario , allowing former members of a defined contribution pension plan to receive a retirement income directly from the plan. The introduction of variable benefit accounts can make a pension plan more attractive to members, offer lower investment management fees and retain assets in the pension plan.- Developments affecting federally regulated pension plans – In the latest issue of its InfoPensions newsletter, the Office of the Superintendent
of Financial Institutions included a number of announcements affecting federally registered pension plans. The announcements include introducing electronic filing of plan amendments, a new basic rate for annual plan assessments and an optional contribution schedule to inform trustees or custodians of amounts to be remitted by employers. - Federal government delays changes to employee stock option tax rules – The federal government has announced that changes to the tax treatment of employee stock options that had been proposed in
June 2019 have been delayed and would not come into effect onJanuary 1, 2020 , as previously scheduled. A revised timeline for the implementation of the proposed changes is expected to be announced in the 2020 federal budget. - New and extended employment leave provisions in
Saskatchewan –Saskatchewan has adopted a number of new and extended employment leave provisions that will affect pension and benefit plan sponsors. The changes include increasing maternity, adoption and parental leave periods, introducing leave for the care of critically ill adult family members, and expanding interpersonal violence leave to include victims of sexual violence. - Tracking the funded status of pension plans as at
December 31, 2019 –Morneau Shepell describes the funded status of pension plans at the end of 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 2018. 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
December 31, 2019 –Morneau Shepell has shown the evolution of the pension expense for a typical defined benefit pension plan. Since the beginning of 2019, the pension expense has increased by 26 per cent (for a contributory plan) due to a decrease in discount rates despite the high returns on assets (relative to the discount rate).
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