The British Columbia government has introduced for First Reading a new Pension Benefits Standards Act (the PBSA), marking a long-anticipated major step towards comprehensive pension reform in the province and in neighbouring Alberta.
The Minister of Finance, Kevin Falcon, has described the new PBSA as incorporating the recommendations made by the Alberta/British Columbia Joint Expert Panel on Pension Standards (for a copy of Blakes comments on the 2008 Joint Expert Panel Report, please click here).
The proposed new Act entirely replaces the existing PBSA, substituting a principles-based regulatory approach for a rules-based approach which has the objectives of reducing administrative costs, enhancing the rights of members (through, among other items, providing for the immediate vesting of pension benefits), providing private-sector employers with increased design options, such as the facilitation of target benefit plans and requiring the adoption of governance and funding policies by defined benefit or target benefit plans.
In addition, the enabling legislation would also amend the relevant family law statutes which prescribe the rules for pension division on marital breakdown.
In the coming months, the Alberta government is expected to introduce largely similar legislation, following through with the Joint Expert Panel’s support for greater legislative and regulatory harmonization between the two jurisdictions.
Upon release of the new Alberta legislation (which is likely to be in the fall but may be introduced as early as the upcoming spring session of the Legislature), we will provide a full analysis of the new Acts and will host a special client seminar to help prepare plan sponsors and others to meet the challenges and opportunities presented by pension reform in Western Canada.