What's New in Pension and Benefits – Summer 2022

  • June 13, 2022
  • Michael Long and Evan Shapiro, Willis Towers Watson

     i.  LEGISLATION

2022 ONTARIO BUDGET

Ontario’s 2022 Budget was tabled on April 28, 2022. The government will consult with stakeholders on regulations for a permanent Target Benefit Pension Plan Framework which will be implemented in 2023. This would replace the temporary regulations for Specified Ontario Multi-Employer Pension Plans which expire in 2024. The Pension Benefits Act was amended in 2017 to add target benefit provisions, but they have not yet been proclaimed into force.

2022 FEDERAL BUDGET BILL INTRODUCED

The federal government has introduced Bill C-19, Budget Implementation Act, 2022, No. 1 (currently at second reading).

It would amend the Pension Benefits Standards Act, 1985 to permit a defined benefit pension plan, other than a negotiated contribution plan, to establish a solvency reserve account (SRA) in the plan’s pension fund. Surplus withdrawal provisions would not apply to withdrawals from a SRA. As well, every plan administrator would need to establish (but not file) a governance policy. Note that un-proclaimed amendments under the 2021 budget bill would have only required negotiated contribution plans to have a governance policies (funding policies, also proposed under the 2021 budget bill, would still only be required for negotiated contribution plans).

The Canada Labour Code would also be amended with respect to the paid medical leave amendments passed last year (but not yet effective). Most of the leave provisions must now become effective no later than December 1, 2022. In addition, the amendments would:

  • Enable an employee to earn additional paid days more quickly
  • Make the medical certificate requirements the same for both paid and unpaid medical leave
  • Ensure employment is considered continuous in successor employer situations

Another amendment would restrict paid medical leave only to employees of employers with 100 or more employees on the day the paid leave provisions are effective even if the number of employees falls to fewer than 100 afterward (no effective date is provided for this amendment).

Finally, the Canada Pension Plan would be amended to make various corrections relating to disabled beneficiaries and contributors, and contributors who are family allowance recipients.

NEW WHISTLE-BLOWER PROTECTIONS UNDER THE FSRA ACT, EFFECTIVE APRIL 29, 2022

Effective April 29, 2022, the Financial Services Regulatory Authority of Ontario Act, 2016 amended (see Schedule 12 under the 2021 Budget Bill) to prohibit reprisals against whistle-blowers, with penalties for anyone who fails to comply. Remedies could include reinstatement or payment of compensation to the whistle-blower, defined as someone who discloses in good faith an alleged or intended contravention of legislation under a regulated sector (including the pension sector) and who receives an assurance of confidentiality from the regulator. FSRA has issued new Whistle-blower Guidance, also effective April 29, 2022, that elaborates on its new powers under the Act.