The federal government is publishing a consultation paper on potential solvency funding relief options for 2021 and measures to further strengthen the framework for federally regulated pension plans.
The announcement follows the government’s commitment in its 2019 budget to enhance the security of workplace pension in the event of corporate insolvency. The budget proposed the following measures:
- Requiring those involved in insolvency proceedings to act in good faith and giving courts greater ability to review payments made to executives in the lead up to insolvency;
- Requiring publicly traded, federally incorporated firms to disclose their policies pertaining to workers, pensioners and executive compensation, or explain why these policies aren’t in place;
- Clarifying in federal pension law that if a pension plan is terminated, it must provide the same pension benefits as when it was ongoing; and
- Requiring these firms to hold and disclose the results of non-binding shareholder votes on executive compensation.
About seven per cent of private pension plans in Canada are federally regulated, such as those in industries like banking, telecommunications and inter-provincial transportation, noted a press release from the government.
Through the consultation, it’s seeking to learn more about Canadians’ and stakeholders’ views on the following subjects:
- Potential options for temporary broad-based solvency funding relief in 2021;
- Measures to strengthen pension plan governance and administration;
- Solvency reserve accounts;
- Variable payment life annuities; and
- Ministerial guidelines on special funding relief.
Submissions are requested on or before Jan. 14, 2021.