Oct. 10, 2017
Osler partner Jana Steele tells Benefits Canada that Bill C-27, which would allow employers that are federally regulated to offer target-benefit pension plans, strikes “an appropriate balance.” In his article, author Julius Melnitzer outlines how the proposal has been delayed in the House of Commons, but is far from dead. Jana, a partner in Osler’s Pensions & Benefits Practice Group, explains Bill C-27.
“The gist of Bill C-27 is to permit target-benefit plans to operate as a design option alongside defined benefit plans and [defined contribution] plans,” Jana tells Benefits Canada. “The intention is to create a more fulsome pension regime with a wider range of options.”
Jana also explains how employers are seeing the legislation as a “welcome middle ground.”
“By offering [target-benefit] plans as a design option, on the one hand, and allowing for conversion of DB plans on consent, on the other hand, the legislation does, in my view, strike an appropriate balance,” Jana tells Benefits Canada. “Most employers are happy with it.”
Jana also says that Bill C-27 mandates a high bar for obtaining consent.
“The legislation says that the explanation of the change must be understandable to a person without pension knowledge,” she tells Benefits Canada.
Jana also discusses an announcement in Ontario that proposes to allow for target-benefit plans in certain situations.
“Hopefully, the province will look at [target benefits] in the context of single-employer plans in the near future,” Jana says.
She adds: “But both the federal and Ontario proposals contemplate funding policies for the new types of plans, governance policies with retiree participation and risk management.”
For more information, read Julius Melnitzer’s article “Can the feds overcome opposition to pass target-benefit pension bill?” in Benefits Canada.