Quebec's pension reform legislation, Bill 3, passes into law and more innovation emerges in pension design and funding in the West
These are among the subjects included in the current issue of the Morneau Shepell News & Views, a monthly publication dedicated to providing insights to its clients in Canada
TORONTO, Dec. 16, 2014 /CNW/ - In the December issue of its monthly newsletter, News & Views, Morneau Shepell examines Quebec's Bill 3 which has been passed into law as well as growing activity in pension design and funding in the West.
- Bill 3 passes into law – After months of protest from municipal employees across the province, the Quebec government has passed its controversial pension legislation, Bill 3. The law will force municipal workers and retirees to share a portion of their pension fund's deficit.
- Alberta issues draft interpretive guideline on solvency reserve accounts – Morneau Shepell summarizes the details of the draft guideline issued by the Alberta Superintendent of Pensions. The guideline summarizes the legislative provisions concerning Solvency Reserve Accounts ("SRAs"), as well as the Superintendent's expectations and recommendations for plan administrators.
- City of Regina adopts a new target benefit framework – The City of Regina and the Pension and Benefits Committee, which represents the employer and employees of the Civic Pension Plan, have reached a negotiated agreement to address concerns regarding the long-term sustainability of the Plan. Morneau Shepell breaks down the new target benefit plan to show how it could be of interest to stakeholders across Canada who might be considering how a target benefit design could represent an attractive solution.
- Ontario government publishes status updates on significant pension initiatives – Last month, the Ontario government published the 2014 Ontario Economic Outlook and Fiscal Review. The Economic Outlook reaffirms the government's commitment to the introduction of legislation enabling Pooled Registered Pension Plans, a legislative framework for target benefit plans in Ontario and the introduction of the Ontario Retirement Pension Plan in 2017. Morneau Shepell examines the future reforms for Ontario.
- Ontario proposes amendment for pension plan investments in local infrastructure –The Ontario Ministry of Finance has released a proposed amendment to the Regulations under the Ontario Pension Benefits Act for public comments. The amendment would enable a plan administrator to invest in more than 30 per cent of the voting shares of an infrastructure corporation. Morneau Shepell looks at what this means for pension plan administrators in this province.
- Changes to tax withholding for disability plans – Morneau Shepell explains tax changes for those receiving short- and long-term disability benefits. Effective January 1, 2015, income tax must be withheld at source for taxable short- and long-term disability benefit payments to align with new requirements from the Canada Revenue Agency. Previously, plan sponsors or plan members could choose to withhold (or not) income tax from taxable disability benefit payments.
- Consultation on the financial literacy of Canadian youth and adults – The Federal Government has released the third phase of consultation paper titled Toward a National Strategy for Financial Literacy: Young Canadians and Adults. As the title suggests, the latest consultation paper indicates that various studies have found that young Canadians lack the skills to navigate the complex world of financial decision-making. Morneau Shepell outlines the goals of the paper in relation to young and adult Canadians.
- Market Indices – Monthly summary of returns from various market indices such as the FTSE TMX Bond Indices and Canadian, U.S. and Foreign Equity Indices. Also includes returns from benchmark portfolios used by pension funds.
- Tracking the funded status of defined benefit pension plans – Impact of past returns on plan assets and the effect of interest rate changes on solvency liabilities.
- Impact on pension expense under international accounting – Expense impact for a typical defined benefit pension plan.
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SOURCE Morneau Shepell - Pension/Retirement