Module 4

Question 1

Comparing the pension standards legislation with that of income tax regulations.

Answer 1

• The term of a RPP are governed primarily by pension standard legislation.
• Under the pension standard legislation, the operation of RPP is guided by a comprehensive set of rules.
• Pension regulators have the duty an remedial authority to enforce compliance with these rules.
• Pension plans are regulated from 2 perspectives:
  1- Controllling the terms of the plan
  2- maximum limits on the tax deferral available.
• The federal government controls the tax shelter provided for pension plans though the Income Tax Act.

Question 2

MJPP - Multi-Jurisdictional Pension Plans Agreement

Answer 2

• ## Finalized in 2011 and amended since then. The original Memorandum of Reciprocal Agreement which was replaced by the MJPP Agreement in 1968, applies in MB, NFL, they have not adopted the MJPP Agreement.

Question 3

How to determine where a plan is registered is set up in the MJPP.

Answer 3

• It identifies provisions that are subject to the jurisdiction where the plan is registered ¨major authority” such as plan registration, administrators, duties, plan records, funding, investments and provisions. (except for annual statement requirements these are mostly reserved to the province of employment.
• It provides a mechanism for transferring jurisdiction from one province to the another.
• Provides rules for the enforcement of rules by the “major authority” and transition provisions as well as for asset allocation between jurisdictions on the wind-up of a multi-jurisdictional pension plan.

Question 4

How do pension standard legislation apply to a pension plan that operates in more than one jurisdiction.

Answer 4

• Pension plans are generally registered in, and supervised by, the jurisdiction in which the plurality of active members is employed.
• A plan operating in more than one jurisdiction must comply with the funding standards of the jurisdiction of plan registration and must apply each individual member the particular benefit standards rules of the members jurisdiction.
  The rules for determining where a plan is registered are set out in the MJPP Agreement.

Question 5

Describe the progress made by the Canadian governments and the Canadian Association of Pension Supervisor Authorities (CAPSA) in moving towards uniform pension legislation.

Answer 5

One of CAPSA prime objectives is to work towards uniformity in pension legislation across jurisdictions.
2 major efforts are made:
1- 1993 “Multilateral Agreement Among Canadian Jurisdictions Respecting Pension Plan Regulation and Supervision” suggested that a pension plan would governed by the pension legislation of the jurisdiction in which the plan is registered. This provided problematic for governments to accept, and the draft agreement was never adopted.
2- 2008 “Report on CAPSA’s Work on Regulatory Principles for a Model Pension Law” The report noted CAPSA’s decision to cease work on principles viewed as contentious since it would be difficult to achieve stakeholders consensus in light of strong disagreements.
3-CAPSA’s mandate has since shifted to facilitate an efficient and effective pension regulatory system in Canada.
4- A degree of harmonization appears to be emerging as pension regulators and government officials share information and agree on best practices in pension regulation. Nova Scotia pension legislation tracked Ontarion legislation, and Albert and BC adopted nearly identical pension benefits standard legislation in 2015 and 2015.