Amendments to Assessment of Pension Plans Regulations (May 2019)

Regulations Amending the Assessment of Pension Plans Regulations (the Regulations) made under the OSFI Act were published in Part II of the Canada Gazette on March 6, 2019. The amendments came into force on April 1, 2019.

As previously communicated to administrators by email and as described in the last issue of InfoPensions (Nov 2018), the amendments streamline the assessment process and eliminate assessments for certain terminated pension plans.

OSFI-issued invoice instead of self-assessment form: The amendments enable the Superintendent to determine a pension plan's assessment after the plan has filed its Annual Information Return (AIR). OSFI will determine the assessment due and send an invoice to all plans with AIRs that were due to be filed on or after April 1, 2019. Plans that have filed an Application for Registration will also receive an invoice from OSFI if the application is filed on or after April 1, 2019.

The due date of the AIR will trigger the determination of the assessment and administrators can expect to receive the invoice approximately 45 days after the AIR was due to be filed. For example, if a plan's AIR is due by June 30, 2019, the administrator can expect to receive an invoice in August 2019 (even if the AIR was filed before its due date).

Elimination of assessments for certain terminated pension plans: The amendments specify that there is no assessment to be paid by the plan in the following two scenarios:

• The plan has been terminated for five or more pension plan years
• The plan is underfunded on the termination date and either the plan is a negotiated contribution plan (a multi-employer plan with employer contributions limited to an amount determined by an agreement) or the employer for the plan is bankrupt or insolvent for the purposes of the Bankruptcy and Insolvency Act, or undergoing proceedings under the Companies' Creditors Arrangements Act.

Clarification to the definition of beneficiary: The amendments clarify that members, survivors or any other persons who chose to transfer their pension benefit out of the pension plan before or after plan termination are not included as beneficiaries (which means that they are not considered for purposes of the assessment calculation). The amendments also clarify that any person for whom the administrator has purchased an immediate or deferred annuity as part of the wind-up of a terminated plan is not considered a beneficiary for purposes of the assessment calculation.