Target Benefit Plans And Annuities For Federally Regulated Enterprises

On October 19, 2016, the federal government tabled Bill C-27, which proposes amendments to the federal Pension Benefits Standards Act, 1985 (PBSA). If passed, this bill will allow federally regulated employers to create both single employer and multi-employer target benefit plans, and to purchase annuities as a full discharge of the plan's obligations under the PBSA in a non-windup situation.

Many details are still to be determined by regulations that are not yet available, however the following are the highlights of the details currently available.

PROPOSED TARGET BENEFIT PLAN RULES

1. An existing registered plan (defined benefit or defined contribution) that is not a target benefit plan cannot be subsequently registered as a target benefit plan, (i.e., existing plans cannot be "converted" to target benefit plans). Target benefit plans must be established as new plans.