Quebec has introduced a bill that makes major changes to the funding rules for private sector DB plans, says an Eckler Special Notice.
Bill 57 is the product of a two-year consultation process stemming from the D’Amours Report.
Read: D’Amours report receives positive reaction
The changes include:
- eliminating solvency funding;
- requiring that going concern funding be augmented by funding towards a stabilization provision, the amount of which will be specific to each plan’s investment policy; and
- changing the rules for use of surplus in ongoing plans and on termination.
Read: D’Amours report: DB or not DB?
The bill also makes a number of changes to the benefit provisions of the Supplemental Pension Plans Act (SPPA), including elimination of the additional pension benefit introduced in 2001, and rule changes for commuted value payments when members elect portability.
The bill should be subject to a parliamentary commission later in the year.
Read: Support dims for some D’Amours report proposals
“The main features of the bill have been favourably received by various stakeholders, so it is not expected to change significantly before its Jan. 1, 2016 effective date,” says the notice.