Canada Pension Plan (CPP) expansion causing pension plan re-evaluation across the country
19 Jul, 2016, 17:39 ET
An in-depth look of this and other subjects are covered in the current issue of the Morneau Shepell News & Views
TORONTO, July 19, 2016 /CNW/ - In the July 2016 issue of its monthly newsletter, News & Views, Morneau Shepell looks at some of the changes Canadians will see in light of the new Canada Pension Plan (CPP) expansion agreement. While it is a step in the right direction, the revised plan is far from perfect and Canadians still have a lot to consider when planning for retirement.
- Make way for the bigger CPP – On June 20, 2016, Canada's finance ministers reached a decision to expand the existing CPP program, ending the 10-year national debate surrounding pension reform. This decision allows governments and pension plan sponsors to proceed with much-needed changes to workplace pension plans. The enhanced CPP benefit will be up to 50 per cent bigger than the current maximum benefit but this will mean major adjustments for employers and their employees.
- Survey: Canadians nearing retirement need help for the future – A Morneau Shepell survey with employees aged 50 and older shows 61 per cent of respondents suffer from chronic health conditions, though 86 per cent believe they will retire in good health, revealing that many may not have realistic expectations of health and its financial impact in retirement. Retirement readiness and financial knowledge remains a concern for this aging population.
- Quebec: Final regulation on the stabilization provision (SP) for private sector pension plans – It will be effective retroactive to January 1, 2016. While it differs in a number of ways from the original draft, the finalization of the regulation allows for more accurate assessments of the impact of the SP on plan funding and on what changes may be necessary for the investment policy.
- Quebec: Bill 75 is adopted, affecting pension plans in the university and municipality sectors. Some of the amendments adopted affect only the university or municipality sector, and some affect both.
- Saskatchewan: Consultation on negotiated cost pension plans – A consultation paper released on May 2, 2016 by the Saskatchewan pension regulator, the Financial and Consumer Affairs Authority, outlined some changes for the province's negotiated cost pension plans (NCPPs). It is likely that variations of the proposed measures may find their way into new regulatory regimes in other provinces.
- BC: Guideline on administrative penalties for non-compliance – The BC Superintendent of Pensions has issued its Non-Compliant Filing Administrative Penalty Guideline which outlines the process for ordering administrative penalties for failed statutory filings or missed deadlines for filing returns.
- Three more provinces introduce PRPPs; Ontario releases draft PRPP regulations – In May 2016 BC, Saskatchewan and Nova Scotia adopted and proclaimed into force legislation permitting pooled registered pension plans (PRPPs), which allows employers to offer employees a low-cost defined contribution plan. On July 5, 2016 Ontario published draft regulations to facilitate PRPPs.
- Ontario establishes the Investment Management Corporation of Ontario – Effective July 1, 2016, the organization will provide investment management and advisory services to participating organizations in Ontario's broader public sector.
- Tracking the funded status of pension plans as at June 30, 2016 – Details on the evolution of the financial situation of DB pension plans since December 31, 2015.
- Impact on pension expense under international accounting as at June 30, 2016 – Expense impact for a typical DB pension plan from December 31, 2015 to June 30, 2016.
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SOURCE Morneau Shepell - Corporate
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