In its annual Pension and Benefits Law Update, Hicks Morley presented a list of “hot topics” yesterday at the Intercontinental Hotel in Toronto. Here are a few highlights.
Get Your Supplement
OMERS has introduced its new supplement to its primary pension plan for the emergency services sector(firefighters, police and paramedics). Although costs of the supplementary plan are much higher, said Jordan Fremont, an associate in the Pension & Benefits Practice Group, with Hicks Morley, the unions still have an interest in them.
Unions Speak Up
While emergency services employees will be enjoying their supplementary plan, the 65-plus may not be enjoying any benefits as “some employers have decided not to extend benefits past 65,” said Fremont. However, the unions are speaking up, he said, and may say that this is a breach of the collective agreement. Insurers are beginning to react to this, allowing retired employees to remain in the plan for health and dental coverage. Insurers are also offering AD&D(though it’s usually capped at age 70)and offering individualized solutions for long-term disability when they’re approached by employers.
Buying Spree
U.S. and U.K. financial firms are in the midst of a buying spree — buying out frozen pension plans. The growing trend certainly has one advantage for employers as it will remove the liabilities from their books.
Phased One
Although the buyout trend hasn’t reached our shores, phased retirement nearly has. With changes to the tax rules, pension plan members will soon be allowed to receive benefits while accruing additional credited service.
Border Break
The Canada-U.S. Tax Treaty has also implemented changes that will give cross-border employees a break — a tax break. For example, a Canadian resident who works in the U.S. could participate in a U.S. retirement plan and deduct the contribution to the U.S. plan for Canadian tax purposes.
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