Human Resources Legislative Update
Federal Government Implements Transitional Pension Funding Relief Regulations (Canada Post)
Date: March 21, 2014
On March 12, 2014, the federal government published final pension funding relief regulations temporarily relieving Canada Post Corporation from the requirement to make special payments to its defined benefit employee pension plan, as ordinarily required under the Pension Benefits Standards Act, 1985 (“PBSA”). Under the Canada Post Corporation Pension Plan Funding Regulations (“Regulations”), the Corporation will only be required to fund the normal costs of the defined benefit component of the pension plan and make contributions to its defined contribution component; no special payments will be required.
The Regulations require the Corporation to provide specific annual disclosure to plan members and retirees, in addition to the normal disclosure obligations outlined in the Pension Benefits Standards Regulations, 1985. The additional disclosure requirements include the plan’s solvency deficit and an outline of the payments that would have been required to be made under the normal funding rules.
In addition, the Regulations prescribe a solvency ratio of one for the purposes of the provisions of the PBSA that prohibit benefit improvements if costs of the improvement would result in the solvency ratio of the pension plan falling below the prescribed level.
The Regulations are now in force, and will repeal automatically on December 31, 2017.