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S.M. 2021, c. 14
Bill 8, 3rd Session, 42nd Legislature
The Pension Benefits Amendment Act
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Explanatory Note This note is a reader's aid and is not part of the law. This Act amends The Pension Benefits Act. The changes made in response to recommendations from the Manitoba Pension Commission include allowing a pension plan to permit a member that continues to be employed after reaching the normal retirement age to stop contributing to the plan and accruing benefits [s. 4] clarifying how ancillary benefits are to be determined [s. 5] allowing a person who transfers their pension benefit credit to a locked-in retirement account or life income fund to after reaching age 65, unlock the whole amount [s. 7] at any age, unlock all or part of the amount on prescribed grounds of hardship [s. 7] after reaching age 55, make a one-time 50% transfer to a prescribed registered retirement income fund [s. 8] allowing the use of solvency reserve accounts by an employer to fund a solvency deficiency [s. 11] consistent with other jurisdictions, allowing specified multi-employer plans [s. 12] allowing rules to address a vacancy on a pension committee involving an inactive plan member [s. 15] allowing greater flexibility in dividing pension assets after a relationship breakdown [s. 16] Other changes to the Act include clarifying that the small pension commutation rule applies to a division of assets [s. 4(2)] allowing a separated spouse or common-law partner to be named as a beneficiary for the purpose of survivor benefits [s. 4(5) and (6)] clarifying the need to prove an entitlement to a benefit [s. 6] removing an outdated reference to deferred profit-sharing plans [s. 13] expanding the requirement to provide notice of late payment to the Superintendent of Pensions [s. 14] Related amendments are made to The Pooled Registered Pension Plans (Manitoba) Act [s. 19]. |
(Assented to May 20, 2021)
HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:
The Pension Benefits Act is amended by this Act.
Subsection 1(1) is amended
(a) in the definition "administrator", in clause (b), by striking out "as defined in subsection 21.4(1)" and substituting "to which money has been transferred in accordance with section 21.4";
(b) in the definition "prescribed plan", in clause (c), by striking out "clause 31(4)(b)" and substituting "subclause 31(4)(b)(iii)"; and
(c) by adding the following definitions:
"registered retirement income fund" and "RRIF" mean a registered retirement income fund as defined in the Income Tax Act (Canada); (« fonds enregistré de revenu de retraite » et « FERR »)
"registered retirement savings plan" and "RRSP" mean a registered retirement savings plan as defined in the Income Tax Act (Canada); (« régime enregistré d'épargne-retraite » et « REÉR »)
Clause 8(2)(d) is amended by adding ", other than a pension committee," after "administrator of a pension plan".
Subsection 21(1.1) is amended by adding the following after clause (b):
(b.1) the member, after having reached the normal retirement age under the plan, while remaining employed, elects to cease being an active member and to cease making contributions, if permitted to do so under the terms of the plan;
Subsection 21(4) is amended, in the part before clause (a), by adding ", including a person entitled to a division under subsection 31(2)," after "When a member or other beneficiary".
The following is added after subsection 21(9):
Suspending pension after normal retirement age
A defined benefit pension plan may permit a member who continues to be employed after reaching the normal retirement age under the plan to cease being an active member and to cease making contributions to the plan.
Value of pension after suspension
If a member ceases to be an active member as permitted in accordance with subsection (9.0.1), the actual value of the member's pension must not be less than the actuarial equivalent, as at the day they ceased to be an active member, of the pension that would have been payable if the member had retired at the normal retirement age.
Clause 21(11)(c) is amended by striking out everything after "registered retirement income fund" and substituting ", to the extent permitted under the Income Tax Act (Canada).".
Subsection 21(26) is amended by striking out "or" at the end of clause (a) and replacing clause (b) with the following:
(b) if no pension is provided under clause (a), pay an amount to the member's designated beneficiary unless, at the time of death,
(i) the beneficiary is the member's spouse or common-law partner, and
(ii) the beneficiary and the member were not living separate and apart by reason of a breakdown of their relationship; or
(c) pay an amount to the member's estate, unless a pension is provided under clause (a) or a payment is made under clause (b).
Subsection 21(26.1) is amended, in the part before clause (a), by adding "or (c)" after "clause 26(b)".
Subsection 21(27) is amended by striking out "or entering into an agreement under subsection 31(6)".
The following is added after subsection 21.1(2):
Method of determining ancillary benefit
Unless the superintendent has approved the use of a different criterion, a pension plan that provides for an ancillary benefit must base the benefit on one or more of the following:
(a) the age of a member or former member of the plan;
(b) the number of years a person was a member of the plan;
(c) the amount of service a person has accrued under the plan.
The following is added after section 21.2:
When a person claims to be entitled to receive a pension or other benefit under a pension plan,
(a) the person has the onus of proving the entitlement to the satisfaction of the administrator; and
(b) the administrator may require evidence from the person, including evidence by way of affidavit, declaration or certificate.
The following is added after section 21.3:
Withdrawal or transfer from prescribed plan at or after age 65
Subject to an order under The Garnishment Act to enforce a maintenance order within the meaning of that Act, to an order under section 59.3 of The Family Maintenance Act to preserve assets, and to subsections (2) to (4) and the regulations, a person who has reached the age of 65 years and is the owner of a prescribed plan may, despite any provisions of the prescribed plan,
(a) make a lump sum withdrawal of the balance owing to them under the plan; or
(b) if permitted under the Income Tax Act (Canada), transfer the balance owing to them under the plan to a registered retirement income fund or to a registered retirement savings plan, or to a pension plan if permitted under the terms of the plan.
Application for withdrawal or transfer
A person may withdraw or transfer an amount under subsection (1) only after
(a) receiving prescribed information provided to them in accordance with the regulations; and
(b) applying for the withdrawal or transfer in accordance with the regulations.
Consent of cohabiting spouse or common-law partner
If the person applying for a withdrawal or transfer under subsection (1)
(a) is a former member of a pension plan seeking to withdraw or transfer an amount from a prescribed plan to which they directly or indirectly transferred the commuted value of their pension under the pension plan;
(b) has a spouse or common-law partner; and
(c) at the time of applying for the withdrawal or transfer, is not living separate and apart from the spouse or common-law partner by reason of a breakdown of their relationship;
the administrator must not permit the withdrawal or transfer unless the spouse or common-law partner, after being given prescribed information, consents in writing to the withdrawal or transfer, in a form approved by the superintendent.
No withdrawal or transfer of amount payable on division
The amount that may be withdrawn or transferred under subsection (1) from a prescribed plan by a former member of a pension plan who directly or indirectly transferred the commuted value of their pension to the prescribed plan must be reduced by any amount that is or may become payable under subsection 31(2) from the plan to a person who is living separate and apart from the former member at the time of the application for the withdrawal or transfer.
Withdrawal from prescribed plan due to hardship
Subject to an order under The Garnishment Act to enforce a maintenance order within the meaning of that Act, to an order under section 59.3 of The Family Maintenance Act to preserve assets, and to subsections (2) to (4) and the regulations, a person may apply to the administrator of a prescribed plan for permission to make a lump sum withdrawal of all or a part of the balance owing to them under the plan based on a prescribed ground of financial hardship.
Limit on number of applications
A person is entitled to make more than one application under subsection (1) relating to the same prescribed plan in a year only if each application is based on a different ground of financial hardship.
A person may withdraw an amount under subsection (1) only after
(a) receiving prescribed information provided to them in accordance with the regulations; and
(b) applying for the withdrawal in accordance with the regulations.
Consent of cohabiting spouse or common-law partner
If the person applying for a withdrawal under subsection (1)
(a) is a former member of a pension plan seeking to withdraw an amount from a prescribed plan to which they directly or indirectly transferred the commuted value of their pension under the pension plan;
(b) has a spouse or common-law partner; and
(c) at the time of applying for the withdrawal, is not living separate and apart from the spouse or common-law partner by reason of a breakdown of their relationship;
the administrator must not permit the withdrawal unless the spouse or common-law partner, after being given prescribed information, consents in writing to the withdrawal, in a form approved by the superintendent.
No withdrawal of amount payable on division
The amount that may be withdrawn under subsection (1) from a prescribed plan by a former member of a pension plan who directly or indirectly transferred the commuted value of their pension to the prescribed plan must be reduced by any amount that is or may become payable under subsection 31(2) from the plan to a person who is living separate and apart from the former member at the time of the application for the withdrawal.
Subsection 21.4(1) is repealed.
Subsection 21.4(2) is amended
(a) by replacing clause (b) with the following:
(b) is the owner of one or more prescribed plans; and
(b) in clause (c), by striking out "superintendent" wherever it occurs and substituting "administrator"; and
(c) by replacing the part after clause (c) with the following:
may, despite any provisions of the prescribed plans, transfer an amount from each plan to a registered retirement income fund that meets prescribed requirements.
Subsection 21.4(4) is amended
(a) in the part before clause (a), by striking out "retirement benefit"; and
(b) by replacing clause (a) with the following:
Subsection 22(2) is amended by adding ", with interest as prescribed and" after "complete the transfer".
Subsection 26(2) is amended by adding "and section 26.0.1" after "subsections (2.1), (2.2) and (2.3)".
Subclause 26(5)(b)(i) is replaced with the following:
(i) is permitted by the terms of a specified multi-employer plan or multi-unit pension plan as defined in section 26.1,
The following is added after section 26:
The administrator of a defined benefit pension plan may set up a separate account within the pension fund as a solvency reserve account.
The only payments that may be deposited into a solvency reserve account are those payments made by the employer in respect of a solvency deficiency.
No transfer from within pension fund
Assets of the plan must not be transferred from any other account within the pension fund to the solvency reserve account.
Despite any wording in a pension plan, prescribed surplus in a solvency reserve account may be withdrawn, subject to and in accordance with the regulations.
Subsection 26.1(1) is amended
(a) by replacing the definition "multi-unit pension plan" with the following:
"multi-unit pension plan" means a pension plan that was designated as a multi-unit pension plan under subsection (2) as it read immediately before the coming into force of subsection (13); (« régime multipartite »)
(b) in the definition "participating employer", by striking out "multi-unit pension plan" and substituting "specified multi-employer plan"; and
(c) by adding the following definition:
"specified multi-employer plan" means a plan designated under subsection (2). (« régime interentreprises déterminé »)
Subsection 26.1(2) is replaced with the following:
Designation of specified multi-employer plans
Upon the written request of the administrator of a pension plan, the superintendent may designate the plan as a specified multi-employer plan for the purposes of this Act if it qualifies as a specified multi-employer plan under the Income Tax Act (Canada) and meets the requirements of this Act and the regulations.
Subsections 26.1(4), (5), (6), (9) and (10) are amended by striking out "multi-unit pension plan" and substituting "specified multi-employer plan".
Subsection 26.1(11) is amended
(a) in the section heading, by striking out "in multi-unit plans"; and
(b) in the part before clause (a), by striking out "multi-unit pension plan" and substituting "specified multi-employer plan".
Subsection 26.1(12) is amended by striking out "multi-unit pension plan" and substituting "specified multi-employer plan".
The following is added after subsection 26.1(12):
Transitional — multi-unit pension plans
Subsections (4) to (12) apply, with necessary changes, to a multi-unit pension plan.
Section 27 is replaced with the following:
Variable pension or employer contributions
The provisions for computing a pension or the employer's contributions in a pension plan filed for registration in accordance with section 18 must not be variable at the discretion of the employer unless, in the opinion of the commission, the circumstances of the plan warrant otherwise.
Subsection 28(3.1) is replaced with the following:
If an employer, or a person required to make remissions on behalf of an employer, fails to remit an amount within 60 days after it is due under the plan, the administrator or fund holder to whom the sum was to be remitted shall immediately notify the superintendent in writing.
Clause 28.1(1)(a) is amended by striking out "a multi-unit pension plan" and substituting "a specified multi-employer plan or multi-unit pension plan as defined in section 26.1".
Clause 28.1(1.2)(b) is replaced with the following:
(b) if the plan has one or more non-active members, the non-active members, as a group, are required to appoint or elect at least one voting member of the committee, unless
(i) no non-active member is prepared to serve as a voting member, and
(ii) the plan takes prescribed steps at intervals required under the regulations to fill the position while it is vacant;
Subsection 31(1) is amended
(a) in subclause (b)(i), by striking out "clause 31(4)(b)" and substituting "subclause 31(4)(b)(iii)"; and
(b) by replacing clause (c) with the following:
(c) money in a registered retirement income fund to which no money has been transferred or contributed other than money transferred under section 21.4;
Subsection 31(2) is amended, in the part before clause (a), by striking out "subsections (3), (4) and (6)" and substituting "subsections (3) and (4)".
Subsection 31(2.1) is replaced with the following:
Administrator to provide prescribed information
When a person becomes entitled to the division of a pension or pension benefit credit under subsection (2), the administrator of the pension plan must provide the member or former member and the person entitled to the division with prescribed information.
Despite any agreement or court order to the contrary, a division under subsection (2)
(a) must be made only after the member or former member and the person entitled to the division have received the prescribed information required under subsection (2.1);
(b) must be made in accordance with the regulations; and
(c) must not reduce the member or former member's pension or pension benefit credit by more than the prescribed percentage.
Subsection 31(4) is replaced with the following:
Transfer of family property portion
When a person becomes entitled to a portion of a pension benefit credit under subsection (2) and subsection 21(4) (commutation of small pension) does not apply, the person is entitled, despite any other provision of this Act or the pension plan, only
(a) to receive a portion of the payments payable under the pension plan; or
(b) to transfer the portion of the pension benefit credit to
(i) another pension plan in which the person is a member, if permitted by the terms of that other pension plan,
(ii) a pooled registered pension plan, or
(iii) a prescribed retirement savings plan or retirement benefit plan.
Section 37 is amended
(a) by adding the following after clause (d):
(d.1) respecting solvency reserve accounts;
(b) by adding the following after clause (e.2):
(e.2.1) prescribing grounds of financial hardship for the purpose of section 21.3.2;
(c) in clause (e.3), by adding ", including prescribing requirements the funds must meet to be eligible for transfers" at the end;
(d) by replacing clause (e.4) with the following:
(e.4) respecting the administrator's duties in relation to
(i) a withdrawal under section 21.3 (non-resident) or 21.3.2 (hardship),
(ii) a withdrawal or transfer under section 21.3.1 (65 years or older), or
(iii) a transfer under section 21.4 (transfer to RRIF);
(e) by adding the following after clause (p):
(p.1) prescribing steps to be taken by a pension committee that does not have at least one non-active voting member to fill the vacancy;
(f) by replacing clause (t) with the following:
(t) respecting the provision of information in relation to
(i) a waiver under subsection 21(26.3) (survivor benefit on pre-retirement death), subsection 23(4) (joint pension entitlement) or subsection 31(9) (division of pension on breakdown of relationship),
(ii) a withdrawal under section 21.3 (non-resident) or 21.3.2 (hardship),
(iii) a withdrawal or transfer under section 21.3.1 (65 years or older),
(iv) a transfer under section 21.4 (transfer to RRIF), or
(v) a division under subsection 31(2);
(g) in clause (y), by adding "specified multi-employer pension plans and" after "respecting".
TRANSITIONAL PROVISIONS
Transitional — division of assets
For greater certainty, a regulation under clause 37(s) of The Pension Benefits Act may require a division under subsection 31(2) of that Act to be made in a different manner in respect of persons who began to live separate and apart, by reason of a breakdown of their relationship, before the coming into force of this section.
Transitional — opting out of division
Despite the repeal of subsection 31(6) of The Pension Benefits Act, the subsection, as it read immediately before its repeal, continues to apply in respect of persons who began to live separate and apart, by reason of a breakdown of their relationship, before the coming into force of this section.
RELATED AMENDMENTS
The Pooled Registered Pension Plans (Manitoba) Act is amended by this section.
Subsection 13(1) is amended, in the part before clause (a), by striking out "an agreement or waiver referred to in section 15" and substituting "a waiver referred to in subsection 15(2)".
The following is added after subsection 13(1):
Administrator to provide prescribed information
When a person becomes entitled to the division of the funds in a member's PRPP account under subsection (1), the administrator must provide the member and the person entitled to the division with prescribed information in accordance with the regulations.
Subsection 13(2) is replaced with the following:
Despite any agreement or court order to the contrary, a division under subsection (1)
(a) must be made only after the member and the person entitled to the division have received the prescribed information required under subsection (1.1);
(b) must be made in accordance with the regulations; and
(c) must not reduce the funds in the member's PRPP account by more than the percentage prescribed by regulation.
Clause 19(1)(k) is replaced with the following:
(k) respecting the division under section 13 of funds in a member's PRPP account, including
(i) prescribing information to be provided by the administrator, and
(ii) prescribing a maximum percentage by which the balance in a member's PRPP account may be reduced as part of a division;
Transitional — opting out of division
Despite the repeal of subsection 15(1) of The Pooled Registered Pension Plans (Manitoba) Act, the subsection, as it read immediately before its repeal, continues to apply in respect of persons who began to live separate and apart, by reason of a breakdown of their relationship, before the coming into force of this section.
Transitional — division of assets
For greater certainty, a regulation under clause 19(1)(k) of The Pooled Registered Pension Plans (Manitoba) Act may require a division under section 13 of that Act to be made in a different manner in respect of persons who began to live separate and apart, by reason of a breakdown of their relationship, before the coming into force of this section.
COMING INTO FORCE
This Act comes into force on a day to be fixed by proclamation.