Notice: New agreement respecting the supervision of multi-jurisdictional pension plans

The Department of Finance Canada has announced the signing of the 2020 Agreement Respecting Multi-Jurisdictional Pension Plans (2020 Agreement). The federal government, together with governments of British Columbia, Alberta, Saskatchewan, Ontario, Quebec, New Brunswick and Nova Scotia, has signed the 2020 Agreement to simplify and clarify the supervision of pension plans in Canada with members in more than one jurisdiction.

The 2020 Agreement was developed by the Canadian Association of Pension Supervisory Authorities (CAPSA) in order to coordinate and harmonize pension regulation across Canada.

Among other elements, the 2020 Agreement

  • requires that a multi-jurisdictional plan only register with one pension regulator (the major authority);
  • sets out rules for determining the major authority;
  • provides that certain requirements of the major authority’s pension legislation such as plan-wide funding and investment requirements will apply to the entire plan;
  • requires that the final location approach be used to determine a plan member’s benefits where the member has been employed in more than one jurisdiction while a member of the plan; and
  • sets out clear rules for allocating the assets of a plan between jurisdictions in the event of a plan termination and wind up or a plan split.

Please refer to CAPSA’s news release and OSFI’s new FAQ series for additional details on the 2020 Agreement.

The 2020 Agreement will come into effect on July 1, 2020.