An in-depth look at these and other subjects are covered in the current issue of the Morneau Shepell News & Views
TORONTO, Oct. 17, 2017 /CNW/ - Morneau Shepell released the October 2017 issue of its monthly newsletter, News & Views, in which the company looked at a number of topics, including benefit plan coverage of medical marijuana, provincial changes on medical premiums and funding regulation and administrative penalties levied in Ontario.
- Medical marijuana and benefit plans – To date, medical marijuana has been a point of contention, particularly following the introduction of Bill C-45 (Cannabis Act) in the House of Commons in April 2017. While medical marijuana is generally not eligible under a group extended healthcare benefit, it can be acceptable as a healthcare spending account (HSA) expense. With the likely legalization of recreational marijuana looming, an increasing number of individuals view medical cannabis as an acceptable form of treatment – which could potentially increase a benefit plan's usage. As a result, pressure on plan sponsors to provide coverage and the potential cost impact for marijuana could be significant.
- Reduction in provincial medical premiums in British Columbia – On September 11, 2017, the British Columbia government announced that Medical Services Plan premiums will be reduced by 50 per cent for all residents, effective January 1, 2018. The change could result in savings of $450 per year for individuals and $900 per year for families currently paying full premiums. Employers paying such premiums for their employees should review employment contracts and collective agreements to determine the specific impact of this change.
- Defined benefit pension plan funding in Nova Scotia – Nova Scotia announced a consultation on defined benefit (DB) pension plan funding and other regulatory matters on September 6, 2017. The three options being considered in the consultation paper include: maintain full solvency funding with measures to help reduce funding volatility, eliminate solvency funding and enhance going concern funding, and require only partial funding of solvency liabilities. The consultation follows the introduction of target benefit plans in New Brunswick, Quebec funding reforms and the newly announced funding framework in Ontario.
- New Brunswick adopts funding relief regulation for multi-jurisdictional pension plans – On September 29, 2017, the New Brunswick government adopted a funding relief regulation that provides a 10-year extension to solvency funding requirements, as well as a consolidation of past deficiencies for multi-jurisdictional pension plans. The final version of the regulation is identical to the draft regulation, with one new requirement: notice must be included in each annual statement to members until the expiry of the 10-year period.
- Saskatchewan establishes funding regime for limited liability plans – As of August 25, 2017, the Saskatchewan Pension Benefits Regulations were amended to establish a new funding and regulatory regime for limited liability plans, which will directly affect a small number of Saskatchewan-registered pension plans. The new regime includes a permanent exemption from funding solvency deficiencies, restrictions on benefit improvements and enhanced member communications, among others.
- Administrative penalties to come into force on January 1, 2018 in Ontario – Ontario filed a regulation setting the amounts for administrative penalties levied under the Pension Benefits Act on September 15, 2017. The act was amended in November 2016 to permit the Superintendent of Financial Services to impose administrative penalties on plan administrators and other persons without requiring a prosecution and conviction for a provincial offence. Administrative penalties will come into force on January 1, 2018.
- Tracking the funded status of pension plans as at September 30, 2017 – Morneau Shepell shared the changes in the financial position of a typical defined benefit pension plan since December 31, 2016. The graph in the newsletter shows the impact of three typical portfolios on plan assets and the effect of interest rate changes on solvency liabilities of medium duration.
- Impact on pension expense under international accounting as at September 30, 2017 – Morneau Shepell shows the expense impact for a typical pension plan that starts the year at an arbitrary value of 100 (expense index). The discount rate has increased in the last month, resulting in a reduced expense, bringing it almost to its level at the beginning of the year.
About Morneau Shepell
Morneau Shepell is the only human resources consulting and technology company that takes an integrated approach to employee assistance, health, benefits and retirement needs. The Company is the leading provider of employee and family assistance programs, the largest administrator of retirement and benefits plans and the largest provider of integrated absence management solutions in Canada. As a leader in strategic HR consulting and innovative pension design, the Company helps clients solve complex workforce problems and provides integrated productivity, health and retirement solutions. Established in 1966, Morneau Shepell serves approximately 20,000 clients, ranging from small businesses to some of the largest corporations and associations. With more than 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.
SOURCE Morneau Shepell Inc.