Human Resources Legislative Update
Federal Government Introduces Legislation to Establish Target Benefit Plans Framework
Date: October 20, 2016
On October 19, 2016, the federal government introduced Bill C-27, An Act to amend the Pension Benefits Standards Act, 1985, legislation that would, if passed, provide a framework for the establishment, administration and supervision of target benefit plans (TBPs).
TBPs provide for fixed or capped contributions, a targeted “defined benefit type” pension formula and flexibility to adjust benefits to promote long-term sustainability of the plan for all participants.
As we previously reported, the government launched a public consultation process in 2014 on a potential federal framework for TBPs to create a new pension design option available to federally regulated private sector and Crown corporation plan sponsors under the Pension Benefits Standards Act, 1985. While it continued to assess the viability of TBPs in 2015, the 2016 federal Budget contained no further announcements on this issue, nor did it mention the consultations.
We are in the process of reviewing this significant legislative development and will be publishing a more detailed discussion of Bill C-27 on our website.