What's New in Pensions and Benefits – October 2021

  • October 08, 2021
  • Michael Long and Evan Shapiro, Willis Towers Watson

  1. LEGISLATION

ONTARIO EXTENDS DEEMED AND PAID INFECTIOUS DECLARED EMERGENCY LEAVE

Ontario has again extended the Deemed Infectious Disease Emergency Leave (Deemed IDEL), this time extending it from September 25, 2021 to January 1, 2022. Employees are deemed to be on an unpaid leave if their work hours have been temporarily eliminated or reduced because of COVID-19. This means the provisions of the Employment Standards Act, 2000 (ESA) that require an employee on temporary layoff to be terminated after a specified period will not apply for the period of the Deemed IDEL.

Ontario has also extended the Paid Infectious Disease Emergency Leave (Paid IDEL) from September 25 to December 31, 2021, to allow employees to take three paid days for reasons relating to COVID-19 (including for vaccinations), provided they are not otherwise entitled to an equal or greater paid leave under an employment contract. The Paid IDEL is in addition to the entitlement to unpaid IDEL. Employers may be eligible for reimbursement from the Workplace Safety and Insurance Board (WSIB), but must submit applications for reimbursement within 120 days of the date the employee is paid, or by April 30, 2022 (whichever is earlier). As well, a new regulation under the ESA sets out the rules for recovering WSIB overpayments made under the Paid IDEL. The government can order an employer to repay an overpayment, along with administrative costs, up to four years after the overpayment date. 

ADDITIONAL PBGF REPORTING REQUIREMENTS

Effective September 1, 2021, General Regulation 909 under the Pension Benefits Act (PBA) was amended to require plan administrators, unless exempt, to report the following additional PBGF information on every valuation report:

  • Solvency liabilities related to Ontario members in respect of benefits up to $1,500 per month
  • Amount of the largest benefit for an Ontario member
  • Separately for pensioners and active / deferred vested Ontario members:
    • number of Ontario members, including those with benefits up to the $1,500 guarantee amount
    • the 10th, 20th, 30th, 40th, 50th, 60th, 70th, 80th and 90th percentiles of the benefit amounts for Ontario members
    • for each percentile indicated above, the solvency liabilities that relate to Ontario members in respect of benefits that are less than each percentile

The additional data must be submitted through the Pension Services Portal as part of valuation reports filed on or after September 1, 2021, but only for DB plans that are PBGF eligible.   Any plan whose PBGF liabilities are less than $10 million will be exempt from the new PBGF reporting requirements.

FEDERAL BUDGET BILL PASSED

Bill C-30, Budget Implementation Act, 2021, No. 1 received Royal Assent on June 29, 2021 and made several amendments related to 2021 Budget measures including:

  • The Pension Benefits Standards Act, 1985 (PBSA) is amended so that unclaimed balances from terminated federally regulated pension plans can be remitted to the Bank of Canada.
  • The PBSA is amended to strengthen plan governance, transparency and benefit sustainability for multi-employer negotiated contribution pension plans
  • The Income Tax Act and Regulation are amended (retroactive to January 1, 2020) to introduce rules implementing advanced life deferred annuities and variable payment life annuities (announced in the 2019 Budget)
  • As of July 2022, Old Age Security payments will increase by 10% for those age 75 and older (a one-time $500 payment was made in August 2021)

Bill C-30 did not contain amendments (also announced in the 2021 Budget) to amend the tax  rules for contribution errors in defined contribution plans.