New pension standards provide greater flexibility, security

Modernized standards governing workplace pension plans will improve pension coverage options

Ministry of Finance

Modernized standards governing workplace pension plans that took effect Sept. 30, 2015, will improve pension coverage options and security for more than 900,000 British Columbians covered by employer sponsored pension plans.

Pension benefits standards protect the financial health of workplace pension plans and the interests of plan members. The act applies to all employment pension plans registered in British Columbia, and plans registered elsewhere that have members employed in British Columbia.

The new Pension Benefits Standards Act accommodates alternative plan designs such as target benefit plans and plans that are jointly-sponsored by employers and employees. The new act improves plan governance by strengthening disclosure requirements and requiring that all plans are covered by a governance policy.

The new act also provides former plan members with greater access to locked-in retirement accounts (i.e. locked-in RRSPs) or locked-in life income funds. These funds may now be accessed for reasons of financial hardship in certain circumstances, which include: low expected income, inability to pay medical expenses (including those of a spouse or dependent), threat of eviction for rental arrears, threat of mortgage default on a principal residence, or inability to pay a deposit on a new rental residence. An annual limit to the amount of funds that may be withdrawn applies. To access locked-in retirement funds, former plan members facing financial hardship must apply to the financial institution holding these locked-in retirement funds.

The new Pension Benefits Standards Act was developed following extensive collaboration with the Government of Alberta. Pension standards among the two provinces have been largely harmonized, reducing the complexity and cost of administering pension plans that have members in both Alberta and B.C.