British Columbia has introduced legislation that it says will enable employers to offer a wider choice of pension plan options.
Bill 38 repeals and replaces the current Pension Benefits Standards Act. The province says the changes will help to reduce administrative costs and enhance the rights of pension plan members and retirees.
Among the changes, current and retired pension plan members will have immediate entitlement to employer-paid contributions and more information about how a plan is operating.
In addition, the legislation establishes a framework that will give former plan members the option of withdrawing locked-in funds in an RRSP or life income fund in cases of financial hardship.
The changes permit alternatives to existing plans, such as target benefit plans and—similar to what currently exists in the private sector—jointly sponsored cost-sharing pension plans in which employers and employees would contribute equally to all elements of the plan.
Other key amendments include requiring governance and funding policies for DB and target benefit plans.
“Employers have said they need streamlined regulation so that they can focus on their business and not on red tape, said Minister of Finance Kevin Falcon in the release. “Modernizing the legislation gives employers more flexibility to offer a wider choice of pension plan options, so that more British Columbians can have access to pension income during their retirement years.”
More to come…