BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.
To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.
To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.
While Canadian pension regulators understand the need to revamp pension laws and regulations to create a more favorable environment for defined benefit plans, the division of power between federal and provincial governments makes such change difficult, an Alberta regulator said.
An attempt to harmonize Canadian pension legislation by developing a model pension law that would, if adopted by the legislatures of the 10 Canadian provinces, simplify regulation of plans across provincial borders, has drawn broad support for about 70% of the principles developed by the Canadian Assn. of Pension Supervisory Authorities to create a model law (BI, May 30, 2005). The other 30% of the principles, though, hinge on surplus issues, a key source of contention among various stakeholders, said Dennis Gartner, assistant deputy minister of pensions, insurance and financial institutions for the Alberta government. The Toronto-based association "has taken our model law as far as it can go," he said.
Some of the principles included in the model pension law currently being discussed are immediate vesting of pension benefits; the administration of plans by a pension committee with at least two representatives designated by members; and the elimination of partial wind-ups of pension plans, which refer to the termination of part of a pension plan and the distribution of the assets of the pension fund related to that part of the plan.
Provincial governments have taken certain steps to revamp pension legislation and regulation within their borders. The Alberta government, for example, has proposed allowing employers to use letters of credit rather than special payments to fund pension deficits in certain circumstances. "This, however, is a stopgap measure that simply buys us some time to solve the asymmetry issue," Mr. Gartner said.
The issue of asymmetry of pension surplus/deficit ownership--in which plan sponsors are responsible for paying off deficits, but may not be entitled to plan surpluses--is widely seen by employers as a disincentive to adequately fund their plans. This issue was thrust into the spotlight by a controversial Supreme Court of Canada decision in Monsanto Canada Inc. vs. Ontario (Superintendent of Financial Services), that required the distribution of surpluses in partially wound-up pension plans (BI, Aug. 9, 2004).
Contrary to what is often stated, though, the Monsanto decision did not make a broad statement that employees are automatically entitled to surpluses upon partial plan terminations, Mr. Gartner said. It was also based on specific elements of Ontario's pension legislation. "If Alberta law were applied to the same set of facts, the results might have been different," he said, cautioning that stakeholders "should not over interpret decisions such as Monsanto."
Another debated topic is the possible creation of a federal pension guaranty fund, but Mr. Gartner said that more realistic funding of benefit promises is a better approach to resolving pension funding issues.