Human Resources Legislative Update
Ontario’s Bill 132 Referred to Committee, Includes Proposed Amendments to PBA
Date: November 12, 2019
On November 7, 2019, Bill 132, Better for People, Smarter for Business Act, 2019 (Bill 132), passed Second Reading and was referred to the Standing Committee on General Government. Bill 132 is omnibus legislation which, if passed, will amend a number of statutes, including the Ontario Pension Benefits Act (PBA). Proposed amendments to the PBA include:
- Electronic communications: New rules regarding electronic communications deem members and former members to consent to the receipt of certain documents sent in electronic form. Such members may opt out of receiving electronic communications at any time. Other document delivery requirements are updated to take into account electronic communications, including security requirements, and the requirements that apply once members retire.
- JSPP conversions: Before a jointly sponsored pension plan (JSPP) is registered under the PBA with the Financial Services Regulatory Authority (FSRA), employers may apply for FSRA’s consent to a proposed merger into the JSPP. If the application for registration of the JSPP is not received within 90 days, the application for consent to the merger is deemed not to have been made. The application of certain JSPP merger and conversion requirements in the regulations may also be waived by the Chief Executive Officer (CEO) of FSRA.
- Plan administrator: A board of trustees is expressly permitted to be the administrator of a single employer JSPP. Where a board of trustees is the administrator, the plan documents must specify the board of trustees’ powers and duties.
- Periodic statements: Provided the plan administrator has made reasonable efforts to locate them, the CEO of FSRA may waive the periodic written statement requirements for missing retired and former members.
- FSRA rule-making authority: FSRA’s rule-making authority is expanded, including with respect to certain aspects of a lump sum transfer or division of a pension for family law purposes.
- Family law valuations: New rules regarding obtaining statements of imputed value when pension assets cease to be available and lump sum transfers when pension assets have been transferred out of a plan following the family law valuation date.
Together with the red tape reduction initiatives found in Bill 132, the government has also proposed a number of regulatory measures, including amendments to the PBA regulations that would eliminate the requirement that the regulations be updated every time actuarial standards for commuted value calculations are amended. This is expected to enable defined benefit plans to adopt new standards more quickly when changes are made by the Canadian Institute of Actuaries.
In addition, the government has proposed to amend the regulations to increase the plan asset threshold that determines when audited financial statements must be filed from $3 million to $10 million in assets, meaning that fewer small plans will be required to file audited financial statements each year.
We will be monitoring the progress of the Bill and will report on any further amendments, if applicable.
If you have any questions about Bill 132 and its application to your organization, please contact any member of our Pension, Benefits & Executive Compensation group.