FTR Quarterly – 2016, Issue 1
Date: May 31, 2016
In This Issue
- Conducting a Benefits Plan Governance Health Check
- Preparing for the ORPP
- Featured Lawyer – Terra Klinck
- Featured Group – Pension, Benefits & Executive Compensation
- Did You Know?
- Thank You – Harvey A. Beresford, Q.C.
- In Memoriam – Christopher Riggs, Q.C. (1942 – 2016)
Pension plan governance has long had headline-grabbing status – and most plan sponsors regularly review their governance framework to identify and address any governance gaps. At the same time, employers who sponsor group benefits plans too rarely build regular reviews of their benefits plan into their larger governance responsibilities.
The Ontario Retirement Pension Plan (ORPP) was first announced in the 2014 Ontario Budget as a major initiative to help address the Ontario government’s concerns about retirement income adequacy, particularly for middle income earners. Since then, the Ontario government has made a series of announcements about the design and roll-out of the ORPP, culminating with the introduction of much anticipated new implementation legislation on April 14, 2016.
|Terra Klinck, a partner in Hicks Morley’s Pension, Benefits & Executive Compensation practice group, recently acted as pension counsel to a pension plan administrator who entered into a novel “buy-in” annuity transaction which transferred a defined benefit pension plan’s investment, longevity and inflation risk to an insurer. The $530 million transaction – the largest of its kind in Canadian history – was featured in The Globe and Mail article, Pension plans team up for $530-million ‘de-risking’ annuities deal.|
Uncle Sam Welcomes Your Pension Investments
By: John Prezioso
Canadian pension funds are continually seeking investment opportunities abroad. Offerings of investments in U.S. real estate and infrastructure projects will likely increase as a result of recent U.S. legal reforms which aim to attract foreign investment in these areas.
The new law exempts qualified foreign pension funds (QFPF) from a U.S. tax that applies to foreign investors’ gains from disposition of a U.S. real property interest. Most broad-based Canadian registered pension plans should satisfy the 5-part test for QFPF status. Canadian pension master trusts should also qualify in most cases. However, plans with few remaining members, and master trusts that include such plans, may not qualify.
Managers offering investments in U.S. real estate and infrastructure will ask the investing pension fund to certify its QFPF status. Contact your regular Hicks Morley lawyer should you require assistance reviewing a pension fund investment agreement or addressing your plan’s QFPF status.
The articles in this Client Update provide general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Hicks Morley Hamilton Stewart Storie LLP and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Hicks Morley Hamilton Stewart Storie LLP. ©