Davies partner Jessica Bullock describes a new and unique type
of hybrid pension plan – target benefit plan (TBP) –
whereby the risk is shared equally between the employer and
employees. TBPs represent a compromise that is intended to minimize
the risks associated with traditional DB and DC pension plans.
In this article, Jessica explains the mechanics of this type of
plan and how it is being implemented in New Brunswick, currently
the only jurisdiction in Canada that permits the establishment of
TBPs. Although Ontario, Alberta, British Columbia and Nova Scotia
have enacted legislation to expressly permit TBPs, regulations are
still required and the legislation in these jurisdictions has not
been proclaimed into force. In Quebec, temporary legislation
provides for the establishment of TBPs in certain enterprises. And
earlier this year, the federal government announced a proposal to
implement TBPs for federally regulated private sector and Crown
corporations.
