Over the last month, we have published a number of posts on the relief measures announced for administrators and sponsors of registered pension plans in Canada in response to the COVID-19 crisis. As there have been a number of measures announced by pension regulators across the country, we thought it would be helpful to highlight the measures in one document. We have also included links to the applicable government announcements.

In this summary update, we have added highlights of additional guidance published by the Ontario and British Columbia pension regulators on April 24, 2020. The updates are identified below as "New."

Federal

Deadline Extensions

On March 27, 2020, the Office of the Superintendent of Financial Institutions ("OSFI") announced a number of filing deadline extensions for administrators of federally regulated private pension plans, including the following:

  • Extension of the deadline for filing annual information returns, certified financial statements and actuarial reports and actuarial information summaries by 3 months.
  • Extension of the deadline for issuing annual statements to members and former members and spouses or common-partners by 3 months, although it is recommended that administrators notify recipients of the expected delay.

Portability Freeze (Defined Benefit Provisions)

Effective March 27, 2020, OSFI also announced a full freeze on portability transfers and annuity purchases related to defined benefit provisions of federally regulated pension plans. The freeze is intended to be temporary in nature and has been implemented to protect the benefits of plan members and beneficiaries in light of the impact of current financial market conditions on the funded status of pension plans. It will be reviewed in the coming months.

During the freeze period, plan administrators may request consent to a transfer or annuity purchase based on plan specific or special circumstances. The payment of pensions to retirees and other beneficiaries is not impacted by the freeze.

FAQs

Following the March 27th announcement, OSFI released a number of FAQs for federally regulated private pension plans which address the portability freeze as well as other relief measures. The FAQs have been updated a number of times since first published and are a good source of information for administrators and sponsors of federally regulated private pension plans.

Solvency Funding Moratorium

On April 15, 2020, the federal government announced that it was providing immediate temporary relief to sponsors of federally regulated defined benefit registered pension plans in the form of a moratorium on solvency payments under such plans through the remainder of 2020. Recognizing the potential impact that the COVID-19 crisis could have on defined benefit plan assets and liabilities and solvency funding obligations under such plans in 2021, the federal government also indicated that it will consult with stakeholders over the coming months to provide relief from 2021 funding obligations, as necessary.

British Columbia

On March 30, 2020 the British Columbia Financial Services Authority ("BCFSA") published Pension Bulletin 20-002, COVID-19: Relief Measures for Pension Plans in British Columbia, in which it announced the following measures for pension plans registered in British Columbia:

  • Extension of the deadline to provide annual statements to active members and persons receiving pensions by 60 days for all plans required to provide such statements between March 30 and December 29, 2020.
  • For collectively bargained multi-employer plans, extension of the deadline to prepare termination of active membership statements for plans with a March 30, 2020 deadline, by 30 days. For all other plans, the prescribed timelines for preparation of such statements has not been extended but plan administrators may apply to BCFSA for an extension.
  • Extension of the due date for all plans required to file annual information returns and financial statements between March 30 and December 29, 2020 by 60 days.
  • Extension of the deadline for the filing of actuarial valuation reports and actuarial information summaries by 90 days for reports with a review date of December 31, 2019 and / or a due date in 2020.

NEW: On April 24, 2020, BCFSA published Pension Bulletin 20-004, COVID-19: Frequently Asked Questions. Among other issues addressed in the document is the ability of defined contribution pension plans to suspend contributions as a result of the COVID-19 crisis. BCFSA has advised that, as provided under the Pension Benefits Standards Act (British Columbia), a plan administrator may reduce the level of employer or employee contributions to a defined contribution plan on a going forward basis by filing a plan amendment. BCFSA also reminds plan sponsors that with respect to defined benefit plans, extensions to the amortization periods for unfunded liabilities and / or solvency deficiencies are subject to approval from the BC Superintendent of Pensions

Alberta

On April 1, 2020, the Alberta Superintendent of Pensions ("Alberta Superintendent") released EPPA Update 20-01, COVID-19 Relief Measures ("Alberta Update"), pursuant to which the Alberta Superintendent immediately provided certain administrative relief to all pension plans registered under the Employment Pension Plans Act (Alberta) ("EPPA"), including the following measures:

  • Extension of the deadline for the filing of annual information returns and associated annual fees, audited financial statements and/or actuarial valuation reports and cost certificates that are due to be filed between March 31 and prior to July 1, 2020 by 180 days.
  • Extension of the deadline to issue annual statements to active or retired members that are due to be issued between March 31 and prior to July 1, 2020 by an additional 180 days.
  • Extension of the deadline to issue a plan summary or member-driven event disclosure statement (e.g., termination statement) that is due to be issued between March 31 and prior to July 1, 2020 by an additional 90 days.

In the Alberta Update, it is recommended that any plan administrator that elects to complete an actuarial valuation report, as at the plan's review date but sooner than the usual 3-year triennial review cycle, contact the Alberta Superintendent as soon as possible. Administrators are reminded that under the EPPA, a plan text may be amended to provide for a review date which is other than the fiscal year end of the plan. However, if the plan text is amended to provide for such a review date, it may not be so amended to further change that review date within the 9 year period immediately following the effective date of the amendment.

It is also recommended in the Alberta Update that extensions to the amortization periods for unfunded liabilities and / or solvency deficiencies as well as the deadline for the remittance of employer and employee contributions be discussed on a case-by-case basis with the Alberta Superintendent.

Saskatchewan

Deadline Extensions

On April 2, 2020, the Saskatchewan Financial and Consumer Affairs Authority ("FCAA") announced the following extensions for certain filing and disclosure deadlines for pension plans registered under The Pension Benefits Act, 1992 (Saskatchewan):

  • Extension of the due date for all plans required to file their annual information return between March 31 and July 31, 2020 by 3 months.
  • Extension of the deadline to provide annual statements to members by 3 months for all plans required to provide members with annual statements between March 31 and July 31, 2020.

Portability Freeze

Effective April 16, 2020, The Pension Benefits Regulations, 1993 ("Saskatchewan Regulation"), were amended to require plan administrators to obtain prior written consent from the Saskatchewan Superintendent of Pensions ("Saskatchewan Superintendent") to transfer monies or make a payment out of a defined benefit plan if, in the Saskatchewan Superintendent's opinion, the transfer or payment would impair the solvency of the pension fund. By notice dated April 16, 2020 (the "Notice"), the Saskatchewan Deputy Superintendent of Pensions advised that, in her opinion, given the current financial market conditions, transfers and payments out of defined benefit plans would impair the solvency of the pension fund. The effect of the amendment to the Saskatchewan Regulation and the Notice is, with very limited exceptions, the implementation of a temporary freeze on transfers and payments out of defined benefit plans. Plan administrators may request the Saskatchewan Superintendent's consent to a transfer or payment based on plan-specific or special circumstances.

The FCAA has also issued a Questions and Answers document which provides further information on the temporary freeze. The temporary freeze does not affect ongoing pension payments from a pension plan or the commencement of new periodic pension payments to retirees, surviving spouses, or spouses or former spouses with respect to a division of pension benefits on spousal relationship breakdown.

Ontario

The Ontario pension regulator, the Financial Services Regulatory Authority ("FSRA"), has issued a number of statements in response to the COVID-19 crisis. Included among their statements are FAQs that address, among other matters, extensions for regulatory filings and member communications.

With respect to regulatory filings, FSRA reminds plan administrators that the Pension Benefits Act (Ontario) ("OPBA") allows administrators and their agents to request a filing extension of up to 60 days beyond the prescribed timelines under the OPBA. Such extensions can be submitted through FSRA's Pension Services Portal. Extension requests beyond 60 days should be submitted to the assigned pension officer, preferably by email.

With respect to the distribution of member annual statements and former member and retired member biennial statements, which for plans with a calendar-year end are required to be distributed by June 30, 2020, FSRA has confirmed that it does not have the ability to extend such deadlines under the OPBA. However, it has indicated that if a plan administrator expects to face challenges in meeting the deadlines the administrator should contact the assigned pension officer as soon as possible to discuss such challenges and the proposed plan of action, in which case FSRA will not impose an administrative monetary penalty for failure to meet the disclosure deadline.

On March 27, 2020, FSRA announced that, until further notice, it was deferring the issuance of F2020-21 invoices for fees payable under FSRA's Fee Rule 2019-01. It further advised that employers experiencing challenges filing their Pension Benefits Guarantee Fund ("PBGF") assessment certificate or paying their PBGF assessment due to disruption from COVID-19 should contact the assigned pension officer as soon as possible to discuss potential relief options.

NEW: On April 24, 2020, FSRA issued guidance in the form of additional FAQs to plan sponsors, administrators and their agents on how they can meet regulatory requirements during the COVID-19 crisis. FSRA reminds stakeholders that it expects plan sponsors and administrators to focus on managing risks while meeting obligations to: pay benefits; make and remit contributions; file required filings, or advise FSRA immediately where an extension is needed; and provide member communications in a timely manner or advise FSRA immediately if the applicable statutory requirement cannot be met.

Among the more significant issues addressed by FSRA in its updated FAQs is the cessation of contributions to defined contribution registered pension plans. FSRA reminds plan sponsor employers that any change to employer or member-required contributions can only be on a go-forward basis and must be supported by an amendment to the plan text. Whether or not such an amendment can be made by the plan sponsor depends on the terms of the applicable plan text and applicable collective agreement, if any, and is also subject to potential employment law implications and member notice requirements. FSRA has advised that, until further notice, and subject always to its ability to act upon the facts of any particular case, it will not order a plan to be wound up solely because the plan has, as a result of the COVID-19 disruption, been amended to temporarily suspend contributions for a portion of the 2020 calendar year.

With respect to funding of defined benefit plans, FSRA has made a number of comments on the preparation of actuarial valuation reports and has confirmed that it does not have the authority to permit the non-payment or delay of a PBGF assessment or to waive interest penalties related to a late payment.

FSRA has also addressed a number of day-to-day plan administration issues, including the issuing of required communications by electronic means and the requirement for a witness signature on FSRA forms. With respect to electronic communications, FSRA has advised that plan administrators must continue to meet the preconditions for electronic communications under the OPBA. With respect to witness signatures, FSRA has advised that it will not object to administrators and financial institutions relying on a FSRA form without a witness provided that there is no evidence on record that the person signing the form does not understand what they are signing. It cautions, however, that it cannot comment on whether a court would decide otherwise and notes that financial institutions and administrators may consider supplemental confirmation, such as follow-up correspondence or virtual witnessing.

Quebec

On April 16, 2020, Retraite Quebec ("Retraite") announced the implementation of two temporary easing measures to assist administrators of registered pension plans during the COVID-19 crisis: the extension of deadlines for certain regulatory and legal obligations; and an update to the degree of solvency that must be taken into consideration for transfers and refunds under defined benefit pension plans.

With respect to the deadline extensions, the Retraite extended the deadline for providing certain documents to the Retraite and to members by three months. These documents include annual statements for members and beneficiaries; triennial or actuarial valuation reports and annual information returns. The deadlines for making payments into the pension fund and notifying the Retraite of any unpaid contributions have not been extended.

With respect to actuarial valuation reports, under the Supplemental Pension Plans Act (Quebec) ("SPPA"), an actuarial valuation is required to be produced at least every 3 years. The Retraite confirmed that under the SPPA, a plan could choose to produce an actuarial valuation as at December 31, 2019, regardless of whether it is required and without authorization from the Retraite.

Newfoundland and Labrador

On April 6, 2020, the Government of Newfoundland and Labrador announced that plan administrators may request in writing an extension of the deadline for the filing of annual information returns with due dates between March 31 to June 30, 2020. Written extension requests must be submitted by email to the Newfoundland Superintendent of Pensions. The permitted extensions vary depending on the filing due date and are set out in the announcement.

Nova Scotia

On April 1, 2020, the Nova Scotia Finance and Treasury Board announced that the deadline for filing annual information returns and actuarial valuation reports due on either March 31 or April 31 has been extended until May 31, 2020.

New Brunswick

The New Brunswick Financial and Consumer Services Commission recently announced that the New Brunswick Superintendent of Pensions ("NB Superintendent") has exercised her discretion under the Pension Benefits Act (New Brunswick) ("NBPBA") to extend the time limit for filing any annual information return and actuarial valuation report due to be filed by April 30, 2020 by 30 days. Under the NBPBA, the NB Superintendent may extend any time limit in the legislation if she is satisfied that reasonable grounds exist for the extension. According to the announcement, the NB Superintendent is satisfied that the state of emergency declared in the province of New Brunswick is reasonable grounds to extend such time limits.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.