Manitoba amends pension rules to strengthen regulatory, solvency system

“These amendments will provide funding relief to pension plans and strengthen the pension regulatory system, while ensuring a strong pension framework in Manitoba,” said Scott Fielding, the province’s finance minister, in a press release.

Read: Proposed Manitoba pension rule changes would permit creation of solvency reserve accounts

The amendments also include a provision for adverse deviation and a reduction in the amortization period for unfunded liabilities, from 15 years to 10 years. This brings Manitoba’s pension system in line with several other Canadian jurisdictions that have imposed a similar change, such as B.C. and Alberta, said a provincial government spokesperson in an email to Benefits Canada.

The amendments also change how plan surpluses can be used, including surplus funds held within a solvency reserve account, and allow for the re-amortization of solvency deficiencies and unfunded liabilities after each plan valuation.

According to the spokesperson, the provisions introduce a new concept of “available actuarial surplus,” defined as the lesser of the amount, if any, by which the plan’s solvency assets exceed 105 per cent (100 per cent for solvency-exempt plans) of its solvency liabilities, or the amount, if any, by which the plan’s going-concern assets exceed the sum of its going-concern liabilities and its PfAD amount (which is zero for solvency-exempt plans).

While Manitoba hasn’t changed the ways in which the available actuarial surplus can be used, any surplus that doesn’t meet the new definition must be left in the plan, said the spokesperson. As well, the “available actuarial surplus in a solvency reserve account can be refunded to an employer by the administrator of a plan consent of the superintendent.”

Read: Pension solvency measures helping plan sponsors through pandemic and beyond