New rules for funding and annuity purchases and updates on leaves of absence
An in-depth look at these and other subjects are covered in the current issue of the Morneau Shepell News & Views
TORONTO, Jan. 18, 2018 /CNW/ - Morneau Shepell released the January 2018 issue of its monthly newsletter, News & Views, in which the Company looked at a number of topics including: funding and annuity purchases in Ontario, funding policies and annuity purchases in Quebec, pension benefits regulations in Nova Scotia, the dental fee guide in Alberta and leaves of absence across Canada.
- New rules for funding and annuity purchases in Ontario – The Ontario government is seeking comments on its proposed amendments to the rules for funding and annuity purchases, which are expected to lower contributions and reduce volatility for most plan sponsors. The new details include: reduced solvency funding, enhanced go-concern funding and certain requirements to be met before liabilities can be discharged upon purchase of annuities.
- Funding policies and annuity purchases in Quebec – New regulation on funding policies and annuity purchases are now in place, which includes some changes to the draft regulation from July 2017. Among other changes, the regulation states that each plan must adopt a funding policy by January 4, 2019.
- Pension benefits regulations in Nova Scotia – The Nova Scotia government has established clear criteria for transferring assets between pension plans through its recently amended Pension Benefits Regulations. This is applicable to transfers between pension plans where there is a sale or disposition of the employer's business or the assets of the business. It is also applicable to transfers where an employer ceases to make contributions to an original pension plan and a successor pension plan is established.
- Dental fee guide in Alberta – In November 2017, Alberta released a new dental fee guide that recommends lower dental fees. Effective January 1, 2018, the industry is expected to adopt the new guide and some plan sponsors may need to amend their contractual arrangements as a result.
- Update on leaves of absence across Canada – Effective December 3, 2017, the federal Employment Insurance (EI) rules began permitting maternity benefits to be paid for up to 15 weeks and paternal leave benefits to be paid for up to 61 weeks. Additionally, new adult caregiver benefit is payable for up to 15 weeks and child caregiver benefit is payable for up to 35 weeks. All provinces are affected by these changes except for Quebec, which has its own parental leave insurance program.
- Tracking the funded status of pension plans as at December 31, 2017 – Morneau Shepell shared the changes in the financial position of a typical defined benefit pension plan since December 31, 2016. The graph in the newsletter shows the impact of three typical portfolios on plan assets and the effect of interest rate changes on solvency liabilities of medium duration.
- Impact on pension expense under international accounting as at December 31, 2017 – Morneau Shepell showed the expense impact for a typical pension plan that starts the year at an arbitrary value of 100 (expense index). Since the beginning of the year, the pension expense has increased by 19 per cent (for a contributory plan) due to the decrease in the discount rates.
About Morneau Shepell
Morneau Shepell is the only human resources consulting and technology company that takes an integrated approach to employee assistance, health, benefits and retirement needs. The Company is the leading provider of employee and family assistance programs, the largest administrator of retirement and benefits plans and the largest provider of integrated absence management solutions in Canada. As a leader in strategic HR consulting and innovative pension design, the Company helps clients solve complex workforce problems and provides integrated productivity, health and retirement solutions. Established in 1966, Morneau Shepell serves approximately 20,000 clients, ranging from small businesses to some of the largest corporations and associations. With more than 4,000 employees in offices across North America, Morneau Shepell provides services to organizations across Canada, in the United States and around the globe. Morneau Shepell is a publicly-traded company on the Toronto Stock Exchange (TSX: MSI). For more information, visit morneaushepell.com.
SOURCE Morneau Shepell Inc.