The Government of New Brunswick recently proclaimed Bill 66, which amends the province’s Pension Benefits Act(PBA)to require plan sponsors to fully fund their defined benefit pension plans on wind-up, says Morneau Sobeco’s News & Views publication.
Previously, the act only required sponsors to remit contributions that were due as of the date of wind-up.
This will force plan sponsors to fully fund the difference between the market value of investments and the solvency liabilities that exists at the wind-up date, making New Brunswick the only province in Atlantic Canada with such a requirement.
Still, the amendment will allow sponsors a maximum of five years to fund the shortfall after the effective date of wind-up.
During that period, the plan administrator must continue to file annual information returns and actual valuation reports as required under the PBA.
The funding requirement does not apply to plans established under either a collective agreement or trust agreement, where the employer’s contributions are fixed.
Bill 66 received Royal Assent on June 26, 2007.
To view the text of the bill on the Government of New Brunswick’s website, click here.
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