On May 6, 2014, Alberta President of Treasury Board and Minister of Finance Doug Horner announced the provincial government’s intention to “briefly hit the pause button” on two pieces of pension reform legislation that were introduced in April. As discussed in a previous Blakes Bulletin: Two New Bills Bring More Changes to Alberta’s Pension Legislation, Bills 9 and 10 were the latest developments in the province’s ongoing reforms to both public-sector and private-sector pension legislation.
After reaching a deal with its largest union on a new collective agreement and avoiding further debate over its controversial Bills 45 and 46 (designed to bar strikes in the public service and impose a new agreement), labour and opposition groups pressured the Alberta government to reconsider certain aspects of Bill 9. The provisions at issue would have imposed changes to early retirement and indexation benefits for four of Alberta’s public-sector pension plans. As part of its efforts to rebuild relations with its unions, the government agreed to refer Bill 9 to the all-party Standing Committee on Alberta’s Economic Future (Standing Committee) for further consultation. The Standing Committee is expected to report back to the legislature on its recommendations in October 2014.
At the same time, and with considerably less explanation, the government also announced that Bill 10, which amends Alberta’s new and not-yet-in-force Employment Pension Plans Act (New Act), would also be referred to the Standing Committee. Though not directly discussed in the government’s announcement, the concerns with Bill 10 presumably relate to its provisions dealing with the ability to convert past-service defined benefits to target benefits as part of a plan conversion to the new target benefit structure permitted by the New Act.
The government has not yet commented on the implications of the delay to Bill 10 on its broader private-sector reforms under the New Act. It had been widely anticipated that the passage of Bill 10 would be followed immediately by the release of the long-awaited regulations under the New Act and that the legislation would take effect shortly thereafter. However, Bill 10 made numerous other changes to the New Act and it is not yet known whether the remainder of the legislation can or will proceed without those changes.
This would be just the latest delay in a private-sector pension reform process that began in 2007 with the appointment of the Alberta-British Columbia Joint Expert Panel on Pension Standards. Plan sponsors may now potentially be forced to wait several more months for those long-needed reforms.