In September 2017, Nova Scotia's Department of Finance and Treasury Board announced that stakeholder input is being sought regarding potential permanent changes to the funding framework for defined benefit pension plans for Nova Scotia.
There is no indication as to any preferred course of action for Nova Scotia; however the discussion paper does summarize what has been done in the past in Nova Scotia – predominantly temporary solvency relief (and permanent solvency relief for certain quasi-public sector plans) – and also references what has been done in other jurisdictions, notable Ontario and Quebec. This is an important opportunity for sponsors of defined benefit pension plans in Nova Scotia to have input on the regime on a go forward basis in Nova Scotia:
- Do we maintain the status quo (full solvency funding)?
- Do we eliminate solvency funding and enhance going concern funding (e.g. the Ontario approach)?
- Do we reduce solvency funding – i.e. from 100% to 85%?
Input is also being sought on a number of regulatory issues including:
- Should Nova Scotia proceed with providing for target benefit plans? If so, should they be restricted to unionized workplaces and should defined benefit plans be permitted to convert to target benefit plans, including accrued benefits?
- What restrictions should apply to annuity buy-outs?
- Should Nova Scotia mirror or adopt recently updated federal investment regulations?
- The Province has set a deadline of Friday, November 10, 2017 for stakeholder input.
Our Pensions and Employee Benefits Group would be pleased to discuss this review with you and to assist in any submissions to be made to the Province.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.