B.C. Ministry of Finance releases consultation paper for solvency funding reform
An in-depth look at these and other subjects are covered in the current issue of the Morneau Shepell News & Views
TORONTO, Nov. 15, 2018 /CNW/ - Morneau Shepell released the November 2018 issue of its monthly newsletter, News & Views, in which the Company looked at a number of topics including: a consultation paper issued by the B.C. Ministry of Finance on solvency funding reform; required amendments to Ontario Statements of Investment Policies and Procedures and pension plan texts; the introduction of a new Employment Insurance parental sharing benefit, Nova Scotia expanding parental leave and New Brunswick creating domestic violence leave; and draft updates to surplus policies announced by the Financial Services Commission of Ontario.
- British Columbia releases consultation paper on solvency funding reform – On October 22, 2018, the B.C. Ministry of Finance issued a consultation paper providing options for reforming the funding framework for defined benefit (DB) pension plans registered in British Columbia. The paper suggests either modifying the current solvency funding regime or replacing the solvency funding with enhanced going-concern funding.
- Required amendments to Ontario Statements of Investment Policies and Procedures and pension plan texts – As of May 1, 2018, Ontario-registered defined benefit pension plans will have to make amendments to their Statements of Investment Policies and Procedures (SIPPs) and pension plan texts. Each SIPP must include a target asset allocation, compliant with the amended regulations. DB pension plan texts require amendments to reflect the new funding requirements. For most plans, these amendments will be required to be made over the next year.
- Start day set for Employment Insurance parental sharing benefit; Nova Scotia and New Brunswick expand employment leaves – On September 26, 2018, the federal government set a start date for a new Employment Insurance (EI) parental sharing benefit that was previously announced in the 2018 federal budget. The benefit will come into effect March 17, 2019, three months earlier than anticipated. Under the new EI parental sharing benefit, a second parent may receive up to an additional five weeks of benefits for a total of 40 weeks of parental leave between two parents. As well, on October 11, 2018, Nova Scotia amended its labour standards legislation to increase pregnancy and parental leave periods, introduced a new form of leave for the care of critically ill adults and expanded the leave for the care of critically ill children. New Brunswick introduced leave for employees who experience domestic, intimate partner or sexual violence, which came into effect September 1, 2018.
- Financial Services Commission of Ontario announces updates to surplus policies – The Financial Services Commission of Ontario (FSCO) announced on October 15, 2018, that it was in the process of updating its surplus policies based on changes to the Pension Benefits Act that became effective on July 1, 2012. To date, two draft policies were posted by FSCO for consultation with one, Policy S900-512: Application by Employer for Payment of Surplus on Wind Up of Pension Plan, being more important to employers. The draft Policy S900-512 will replace two pre-existing policies that set out rules for surplus withdrawal on full and partial wind ups.
- Tracking the funded status of pension plans as at October 31, 2018 – Morneau Shepell shared the changes in the financial position of a typical defined benefit plan with an average duration since December 31, 2017. 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 October 31, 2018 – Morneau Shepell showed 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 decreased by 10 per cent (for a contributory plan) due to an increase in discount rates despite negative returns on assets.
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Morneau Shepell is the only human resources consulting and technology company that takes an integrated approach to employee well-being, health, benefits and retirement needs. The Company is the largest administrator of retirement and benefits plans and the largest provider of integrated absence management solutions in Canada. LifeWorks by Morneau Shepell is a total well-being solution that combines employee assistance, wellness, recognition and incentive programs. As a leader in strategic HR consulting and innovative pension design, the Company also helps clients solve complex workforce problems and provides integrated productivity, health and retirement solutions. Established in 1966, Morneau Shepell serves approximately 24,000 clients, ranging from small businesses to some of the largest corporations and associations. With more than 4,500 employees in offices worldwide, Morneau Shepell provides services to organizations 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 - Pension/Retirement