Ontario announces new solvency funding framework; BC issues draft records retention guideline
Jun 20, 2017
An in-depth look at these and other subjects are covered in the current issue of the Morneau Shepell News & Views
TORONTO, June 20, 2017 /CNW/ - Morneau Shepell released the June 2017 issue of its monthly newsletter, News & Views, in which the company looked at a number of topics including the following: in Ontario, a new defined benefit (DB) pension plan funding framework and proposed regulations on administrative penalties; draft records retention guideline for registered pension plans in British Columbia; and clarified Saskatchewan sales tax on insurance premiums.
- Ontario announces new funding framework for DB pension plans – On May 19, 2017, in announcing a new DB pension plan funding framework and other related measures, Ontario expanded coverage under the Pension Benefits Guarantee Fund (PBGF). The framework included shortening the going concern amortization period from 15 years to 10 years, with special payments consolidated into a single schedule. It also announced increasing, by 50 per cent, the maximum guarantee provided by the PBGF, covering monthly pensions up to $1,500 instead of $1,000. Documentation to implement the changes is expected in the fall.
- Ontario released proposed changes on procedures and proposed amounts for administrative penalties – The public had until June 12 to make submissions on the amendments to the Pension Benefits Act (PBA) allowing the Superintendent of Financial Services to impose administrative penalties on plan administrators and other persons without requiring a prosecution.
- BC Financial Institutions Commission released a draft Records Retention Guideline – The guideline further outlines the Commission's expectations on how pension plan records will be managed. The consultation period for the draft guideline ends this month with the final version to be effective January 1, 2018.
- Saskatchewan clarifies provincial sales tax (PST) on insurance premiums – Following consultations with the insurance industry, the effective date for PST being applied to insurance premiums has been delayed from July 1, 2017 to August 1, 2017. It was also confirmed that self-insured group benefit arrangements, also known as Administrative Services Only (ASO) arrangements, will be subject to PST.
- Tracking the funded status of pension plans as at May 31, 2017 – Morneau Shepell shared the changes in the financial position of a typical defined benefit pension plan since December 31, 2016.
- Impact on pension expense under international accounting as at May 31, 2017 – Morneau Shepell shows the expense impact for a typical pension plan that starts the year at an arbitrary value of 100 (expense index). Since the beginning of the year, the pension expense has increased by 13 per cent for a contributory plan due to the decrease in the discount rates despite the good returns (relative to the discount rate).
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Morneau Shepell is the only human resources consulting and technology company that takes an integrative approach to employee assistance, health, benefits and retirement needs. The Company is the leading provider of employee and family assistance programs, as well as the largest administrator of retirement and benefits plans and the largest provider of integrated absence management solutions in Canada. Through health and productivity, administrative, and retirement solutions, Morneau Shepell helps clients reduce costs, increase employee productivity and improve their competitive position. Established in 1966, Morneau Shepell serves approximately 20,000 clients, ranging from small businesses to some of the largest corporations and associations. With approximately 4,000 employees in offices across North America, Morneau Shepell provides services to organizations across Canada, in the United States, and around the globe. Morneau Shepell is a publicly-traded company on the Toronto Stock Exchange (TSX: MSI). For more information, visit morneaushepell.com.
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For further information: Cathren Ronberg, Morneau Shepell, 416.355.5632, email@example.com