Nova Scotia-based private employers can now transfer their pension plans into the Public Service Superannuation Plan.
The Private Sector Pension Plan Transfer Act, which received royal assent on Nov. 9, provides all employers based in the province with the option of offering or continuing to offer a defined benefit pension plan with a prescribed funding policy, says Level Chan, a partner at Stewart McKelvey.
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When employers transfer their plans into the PSSP, the benefits would then be paid in accordance with the superannuation plan. “The option was already available to large parts of the public sector in Nova Scotia, including universities and municipalities, but this legislation [will extend it] to private sector employers as well.”
As more employers opt to consolidate their pension plans, this type of legislation will become more common across Canada, he says, noting it also provides value to economies of scale, in terms of administration, investment and assets.
“For employees, it [should provide some security] to know that, going forward, they’re part of a larger plan with more employers and more contributors. It has a clearly laid out policy that’s aimed at making sure the plan is sustainable for the long term. So employees get the benefit of having that stability with respect to their future retirement benefits.”
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