YMPE jumps by nearly five per cent for 2021
An in-depth look at this and other subjects are covered in the current issue of the Morneau Shepell News & Views
TORONTO, Nov. 25, 2020 /CNW/ - Morneau Shepell released the November 2020 issue of its monthly newsletter, News & Views, in which the company looks at the following topics:
- YMPE and tax limits jump by nearly five per cent for 2021 – The Canada Revenue Agency has announced higher than usual increases to the year's maximum pensionable earnings (YMPE) under the Canada Pension Plan and contribution limits to pension plans under the Income Tax Act. The YMPE for 2021 will be $61,600, while the annual contribution limit will be $29,210 for money purchase pension plans. The COVID-19 pandemic caused greater unemployment for lower income Canadians, resulting in higher than usual increases in average wages for Canadians who remained employed.
- Quebec introduces target benefit pension legislation – Quebec has introduced legislation to allow for the establishment of target benefit pension plans. The legislation will also allow defined contribution plans and voluntary retirement savings plans to establish variable payment life annuity funds.
- New Brunswick updates pension plan funding rules – New Brunswick has revised its defined benefit funding framework to put into effect changes that were announced earlier in the year. Solvency exempt pension plans will not be subject to the new funding framework.
- New Brunswick unclaimed property rules would affect wound up pension plans – Following the passage of the New Brunswick Unclaimed Property Act, the New Brunswick Financial and Consumer Services Commission (FCNB) published proposed rules for an Unclaimed Property Program. Under the proposed rules, pension benefits will be presumed to be "unclaimed" three years after the approval of a pension plan wind-up report, at which point the administrator would be able to transfer liabilities associated with any missing members to the Unclaimed Property Program.
- FSRA sets pension priorities and service standards – The Financial Services Regulatory Authority of Ontario (FSRA) has issued two draft documents, one setting out its service standards for evaluating its performance against expectations and targets, and another describing its priorities for the next fiscal year.
- Saskatchewan loosens restrictions on DB transfers – The Saskatchewan Superintendent of Pensions announced modifications to the province's temporary freeze on transfers from defined benefit pension plans to provide automatic consent for most such transfers, subject to certain conditions.
- Tracking the funded status of pension plans as at October 31, 2020 – Morneau Shepell describes the funded status of pension plans since December 31, 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 2019. 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, 2020 – 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 eight per cent (for a contributory plan) mainly due to the decrease in the discount rates.
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Morneau Shepell is a leading provider of technology-enabled HR services that deliver an integrated approach to employee wellbeing through our cloud-based platform. Our focus is providing world-class solutions to our clients to support the mental, physical, social and financial wellbeing 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 consulting, actuarial and investment services. Morneau Shepell employs approximately 6,000 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.