PEI permits electronic beneficiary designations
On May 13, 2021, Prince Edward Island (PEI) passed Bill 6 – An Act to Amend the Designation of Beneficiaries Under Benefit Plans Act. Bill 6 amended the province’s Designation of Beneficiaries Under Benefit Plans Act to permit participants in pension or other retirement savings plans in Prince Edward Island to designate beneficiaries electronically. The amended legislation also permits beneficiaries to be designated in a will.
The amendment clarifies that beneficiary designations are governed by the Prince Edward Island Electronic Commerce Act. Therefore, a beneficiary designation under a pension plan or other retirement savings arrangement that complies with the terms of that legislation would be valid for the purposes of the plan, as long as it is not part of a will. Beneficiary designations made by will cannot be done electronically, as wills cannot be signed electronically.
While there is no pension standards legislation in force in Prince Edward Island, the aforementioned Designation of Beneficiaries Under Benefit Plans Act governs beneficiary designations made under a pension plan in respect of PEI residents, as well as certain other retirement savings and profit-sharing vehicles, including tax-free savings accounts (TFSAs), registered retirement savings plans (RRSPs), and retirement income funds (RIFs).
With this change, Prince Edward Island joins Alberta and Ontario in amending its legislation to clearly permit pension plans and certain other retirement savings arrangements to accept beneficiary designations that have been made electronically.