Financial Services Regulatory Authority of Ontario issues pension priorities for 2020
An in-depth look at this and other subjects in the current issue of the Morneau Shepell News & Views
TORONTO, Nov. 27, 2019 /CNW/ - Morneau Shepell has released the November 2019 issue of its monthly newsletter, News & Views, in which the company looks at the following topics:
- Ontario sets pension priorities for 2020 – The Financial Services Regulatory Authority of Ontario (FSRA) issued two documents relating to pensions: a draft 2020-2021 "Priorities and Budget" consultation document, as well as its proposed "Pension Sector Guiding Principles." The documents detail FSRA's priorities to strengthen its oversight activities in the pension sector and identifies the principles that will help guide those activities.
- Ontario allows statutory discharge for buy-out annuities of surviving spouses – On October 15, 2019, the Ontario government filed Regulation 335/19, which sets out the rules for providing a statutory discharge for a buy-out annuity in respect of a surviving spouse. This allows defined benefit pension plan sponsors in Ontario to discharge their responsibilities in respect of surviving spouses, as well as former and retired members for whom such discharges were already available.
- New pension regulator established in British Columbia – As of November 1, 2019, the Financial Institutions Commission (FICOM) was officially replaced by the BC Financial Services Authority (BCFSA) as British Columbia's pension regulator. The BCFSA is a new self-funded Crown corporation that will operate at an arm's length from the Ministry of Finance.
- Changes to benefit plans in Ontario, Quebec and Alberta – Several changes to provincial health care benefits have been announced recently. Effective January 1, 2020, the Ontario Health Insurance Plan will no longer cover emergency medical costs for individuals from Ontario travelling outside of Canada. Other changes include: FreeStyle Libre flash glucose monitors are now covered under the Ontario Drug Benefit for patients on insulin therapy; the Quebec government launched a new program that provides children under the age of 18 with up to $250 in coverage every two years for glasses or contact lenses; and the 2019 Alberta Budget announced new program changes that will include a biosimilars initiative, limiting drug benefit coverage to lower cost alternatives under Maximum Allowable Cost pricing rules and discontinuing coverage for non-senior dependents under the Alberta Senior Drug Benefit Program.
- 2019 federal election pension and benefits developments – The Liberal Party of Canada obtained the most seats in the 2019 federal election, having made several promises that would affect pensions and benefits in Canada. The party promised to increase the Old Age Security Benefit by 10 per cent for seniors age 75 and over, and increase the survivor benefit under the Canada Pension Plan and Quebec Pension Plan by 25 per cent. As well, the Liberals promised to set clear national standards for access to mental health services, and provide up to $3,000 available in free counselling services for veterans before making a disability claim.
- Tracking the funded status of pension plans as at October 31, 2019 – Morneau Shepell describes the funded status of pension plans over the first 10 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 October 31, 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 30 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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SOURCE Morneau Shepell - Corporate