Infromation Bulletin: PROVINCE EXTENDS PENSION SURPLUS REGULATION TO 2002

Deputy Premier and Finance Minister Jim Flaherty today announced an extension of the Surplus Regulation under the Pension Benefits Act (PBA) to December 31, 2002.

The existing Surplus Regulation, introduced as a temporary measure to regulate surplus withdrawals from defined benefit pension plans, was renewed in 2000, pending the development of a more permanent resolution of the issue. To this end, the Government released a consultation paper entitled Surplus Distribution from Defined Benefit Plans in July 2001.

The Government wants to ensure that when pension surplus is distributed, employers, employees and pensioners are treated fairly. The core proposals of the consultation paper received broad-based support from stakeholders.

The core proposals included:

• Surplus sharing based on negotiations between employers, members and pensioners;
• consent levels for surplus sharing agreements of two-thirds of members and a similar proportion of former members; and
• a mechanism, on full wind up, to avoid delays in surplus distribution and to provide a process for members and pensioners to prompt surplus withdrawals.

Extending the current Surplus Regulation will allow the Province appropriate time to review the submissions and prepare the legislative and regulatory amendments required.

The Minister intends to introduce the pension surplus amendments to the PBA in the spring session.