Financial Services Regulatory Authority of Ontario becomes new pension regulator in the province
An in-depth look at this and other subjects in the current issue of the Morneau Shepell News & Views
TORONTO, July 24, 2019 /CNW/ - Morneau Shepell has released the July 2019 issue of its monthly newsletter, News & Views, in which the company looks at the following topics:
- Final recommendations on pharmacare issued by Advisory Council – The Advisory Council on the Implementation of National Pharmacare issued its final report in June 2019, recommending universal public, single-payer pharmacare for all Canadians. The advisory council proposes phased implementation beginning with essential medicines in 2022 and expanding to a comprehensive formulary by 2027.
- Financial Services Regulatory Authority of Ontario becomes Ontario's new pension regulator – In June 2019, the Financial Services Regulatory Authority of Ontario (FSRA) assumed the regulatory duties of the Financial Services Commission of Ontario (FSCO) regarding pension plan regulation in Ontario. FSRA has identified its main priorities as burden reduction and regulatory effectiveness. FSRA will review inherited guidance, data collection, filing requirements, and service standards to ensure they are relevant, provide value and support its mandate.
- Employee stock option deduction limits to take effect in 2020 – The federal government has introduced legislation, which would limit the availability of deductions with respect to shares issued under certain employee stock options effective on January 1, 2020. The proposals will put a $200,000 annual limit on the value of the employee stock options that vest in a year and continue to qualify for the stock option deduction. The new limit will apply to stock options granted to employees of large, long-established and mature firms, while Canadian-controlled private corporations and "start-ups, emerging or scale-up companies" would be exempted.
- Federal Department of Finance releases legislation on employee life and health trusts – In May 2019, the federal Department of Finance released draft legislation setting out the process for conversion of existing health and welfare trusts to employee life and health trusts. The existing rules for employee life and health trusts will be amended to address stakeholder concerns. The draft legislation is required because the rules that permit health and welfare trusts will cease to apply after December 31, 2020.
- FSCO addresses non-residency unlocking from a pension plan – On May 28, 2019, FSCO released a new spousal waiver form and frequently asked questions document (FAQ) on non-residency unlocking for Ontario former members of a registered pension plan. The FAQ clarifies that plans are not required to provide non-residency unlocking to their members.
- British Columbia introduces new forms of employee leave – British Columbia updated its employment standards legislation to include leave for critical illness or injury and domestic or sexual violence, effective May 30, 2019. Critical illness or injury leave entitles employees to take unpaid leave to care for or support a family member. Domestic or sexual violence leave applies to an employee or certain family members who have experienced physical, sexual, psychological or emotional abuse.
- Quebec issues draft regulation affecting pension plan funding – On July 3, 2019, Quebec issued a draft regulation to amend the Regulation respecting supplemental pension plans, part of which may have financial consequences on pension plan sponsors. The draft regulation affects the determination of stabilization contributions and increases the upper limit on annual information return filing fees, among other changes.
- Tracking the funded status of pension plans as at June 30, 2019 – Morneau Shepell describes the funded status of pension plans over the first six months 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 June 30, 2019 – Morneau Shepell has shown the evolution of the pension expense for a typical defined benefit pension plan. Since the beginning of the year, the pension expense has increased by 32 per cent for a contributory plan due to the decrease in the discount rates, despite the good returns on assets relative to the discount rate.
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Morneau Shepell is the leading provider of technology-enabled HR services that deliver an integrated approach to well-being through our cloud-based platform. Our focus is providing everything our clients need to support the mental, physical, social and financial well-being of their people. By improving lives, we improve business. Our approach spans services in employee and family assistance, health and wellness, recognition, pension and benefits administration, retirement and benefits consulting, actuarial and investment services. Morneau Shepell employs almost 5,000 employees who work with some 24,000 client organizations that use our services in 162 countries. Morneau Shepell is a publicly traded company on the Toronto Stock Exchange (TSX: MSI). For more information, visit morneaushepell.com.
SOURCE Morneau Shepell Inc.